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    Columns

    Enthusiastic Leadership at AdvaMed

    ...

    Enthusiastic Leadership at AdvaMed
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    Sean Fenske, Editor01.30.17
    My first experience at an AdvaMed event years ago found me in Washington, D.C., for the association’s annual meeting. While informative, the feel of the event was a bit “stuffy,” with a heavy focus on regulatory concerns and legislative issues. Fast-forward to the 2015 event in San Diego, Calif., and the difference was significant. While those “stuffy” issues were still a topic of discussion during several sessions, the event felt like more of a celebration of innovation in medtech with speakers painting a very positive image of the industry. This was a bit of a contrast to the less-than-enthusiastic opinions of the then yet-to-be-suspended device excise tax, which was at the top of many attendees’ minds.

    During that 2015 event, I had the pleasure of being introduced to the then board chairman of AdvaMed Accel, a division of the association focused on addressing the needs of smaller medtech companies. That person was Nadim Yared, president and CEO of one of those smaller firms himself—CVRx Inc. CVRx developed the Barostim neo, a minimally-invasive implantable system and the only device CE-marked for the separate indications of heart failure and resistant hypertension.

    Yared was an outspoken “cheerleader” of sorts for the industry at the event; his enthusiasm for medtech was apparent each time he spoke. For that reason, at the 2016 meeting, I was excited to hear of the new role Yared would be undertaking within AdvaMed. Starting in March 2017, he will serve as AdvaMed’s chairman of the board for a term of two years. One would be challenged to find a more vocal proponent of the medtech industry to lead the organization.

    In the following interview, MPO was able to speak with Yared about his upcoming role, challenges facing the industry, and what he saw on the horizon for the medical device sector.

    Sean Fenske: Can you share a bit of your background within the medical device industry?
    Nadim Yared: Sure. From the outset, I’ve had the privilege to work for both small and large companies. Ten years ago, I joined CVRx, leaving Medtronic where I had been serving as vice president and general manager of Medtronic Navigation. Medtronic Navigation was one of the best-kept secrets within the company: a cool group of advanced researchers based in Boulder, Colo., developing smart surgical tools utilizing the latest imaging and digital localization technologies.

    Prior to that, I worked at GE Medical for 10 years in both engineering and marketing roles. After graduating with an engineering degree, I joined GE to develop the software-based CT/MR/X-ray digital console and 3D-image reconstruction platform. After I received an M.B.A. from Insead in France, I moved into marketing to lead GE’s surgical imaging business. In that role, I identified OEC Medical Systems as a good acquisition target, and upon its acquisition, moved my family to Salt Lake City, Utah, to lead the integration efforts.

    I’ve had the opportunity to work with a wide variety of stakeholders globally who have an interest in our industry—suppliers, investors, and the lawmakers whose work impacts all of our businesses, but most importantly, the patients we serve. Since 2011, I have served on AdvaMed’s Board of Directors, where I have witnessed firsthand the importance of taking an active role in working with members of Congress and the federal agencies with oversight of our industry to ensure that safe and effective innovative technologies reach those patients that need them most.

    Fenske: You’ll be the first “small company” representative to serve as chairman of the board of AdvaMed. Why is this significant?
    Yared:
    Approximately 75 percent of AdvaMed’s active members are small companies—those with annual U.S. revenue of less than $100 million. AdvaMed also represents the largest multi-national corporations in medtech. My nomination to this role only confirms the broader industry’s commitment to small-cap company issues and concerns, a message AdvaMed has been working to drive home for years. I’m looking forward to working with the industry as a whole to address the challenges we all face and strengthening the innovation ecosystem.

    Fenske: Speaking of those small-cap companies, at one time, there was a bit of a perception of AdvaMed serving more of the bigger industry players. What has AdvaMed done to be more inviting to the entire medical device industry, both small and large firms alike?
    Yared:
    In 2012, AdvaMed Accel was established to focus on our small company members—the majority of these being pre-revenue companies. This division has taken off, and we are observing an increase in both retention and the number of new, small-company members. We’ve worked hard as an organization to ensure the voices of all member companies are heard through our advocacy efforts and to ensure we are providing the appropriate information and opportunities for our companies. We’ve also created new sectors, including radiation therapy and most recently, AdvaMed Digital, to ensure we are supporting the needs of our diverse membership, dynamic ecosystem, and those companies moving into healthcare.

    Also, we’ve expanded leadership and diversity on AdvaMed’s various boards—including through the Women’s Executive Network—and established a more unified voice in talking with key government agencies and lawmakers. There is strength in numbers, and we’re working hard to ensure that we are unified as an industry in Washington, D.C., and beyond.

    Fenske: Last year at the annual meeting, AdvaMed announced a group purchasing program, which would likely most benefit those smaller firms. Can you share the details of that?
    Yared:
    The purpose of the AdvaMed Purchasing Group is to improve the quality and reduce the acquisition costs of products and services required by our members to run their operations by providing members with collective purchasing resources (the member-driven consortium) needed to continue to thrive. The AdvaMed Purchasing Group is supporting the innovation ecosystem by allowing our smaller members to divert resources from procurement to those needed to bring innovations to market. AdvaMed Accel members in particular are finding that their procurement savings exceed the amount they pay in annual membership dues to AdvaMed.

    Our members are now saving significant dollars through pre-negotiated contracts with leading suppliers of commonly used business services, strengthening their bottom line. As you mention, small and medium-sized companies are saving the most through this program as they are able to take advantage of supplier rates generally reserved only for the largest companies.

    Fenske: What about your company. Is CVRx participating in the group purchasing program?
    Yared:
    Yes, CVRx is personally benefiting from the program. To give you one specific example, our team had our buyer do a sampling of some key items that we buy and what we think we will see for savings in this program. We sampled our most frequently purchased items and looked at 15 in total. The price was better on eight of the items and no items were higher than our current pricing. The average savings as a percentage on the eight items was 33 percent. And this was just on one of the contracts.

    Fenske: That sounds fantastic. How has the program been received by the industry since the announcement?
    Yared:
    AdvaMed has received significant interest in the purchasing group since it officially launched in October at AdvaMed 2016. Member companies have begun enrolling in the program and dozens more are in active discussions with multiple suppliers.

    Fenske: Getting back to your role as the next chairman of the board of AdvaMed, what issues are most significant to you that you will seek to address first?
    Yared:
    What’s most significant to the industry is to ensure that we protect and provide fertile ground for the innovation ecosystem to continue to grow and blossom, creating more needed therapies and high-paying jobs. This will include working with the new administration on policies to protect and grow our ecosystem, particularly with regard to payment and coverage policies, regulatory pathways, trade, and capital formation. As mentioned previously, I look forward to continuing to develop and unify the voice of our industry in Washington, D.C., and worldwide.

    Fenske: Speaking of the incoming administration, how are efforts proceeding with support to repeal the device tax? Do you think with the result of the presidential election, we will likely see its demise as a permanent solution?
    Yared:
    AdvaMed strongly urges Congress and the new administration to move quickly on permanent repeal of the medical device excise tax. Solid bipartisan majorities in both the House and Senate are already on record in favor of repealing this anti-jobs, anti-patient, and anti-innovation tax, and both chambers strongly supported the two-year suspension that went into effect in January 2016. Since the suspension took effect, medical technology companies have been able to reinvest those resources into new hiring, R&D, and capital improvements. This benefits patients, the economy, and American innovation. We are calling on the 115th Congress to fully repeal this tax as early as possible in this new year, so companies can plan longer term to ensure these benefits continue.

    Fenske: Focusing more specifically, what did the device tax suspension mean for your own company—CVRx? Were those funds reinvested into R&D or personnel, or did it have some other impact on the company?
    Yared:
    In the U.S., our product is not yet fully approved by the FDA, so the medical device excise tax’s direct impact on CVRx was limited. However, we believe that the suspension of the tax created a positive environment that allowed CVRx to raise its latest round of financing that was needed to develop the evidence required for FDA approval in the U.S.

    Translating device breakthroughs into commercial products often requires the help of a larger firm. But thanks to the tax, larger firms have less money with which to acquire promising companies. With only a short window of suspension, companies cannot fully take advantage of the extra cash on hand due to the uncertainty of the future with regard to this tax. Repealing the device tax will provide medical technology innovators with the long-term certainty necessary to support future job growth and sustainable, cutting-edge R&D that will ultimately lead to the next generation of breakthroughs in patient care and treatment.

    Fenske: Overall, what’s your outlook on the industry in the years ahead? What key issues do we face and what can we expect?
    Yared:
    As for key issues impacting the industry in the coming years, I think we are going to see continued progress on the regulatory front. FDA has made great strides in improving the timeliness, predictability, and transparency of its review processes under the current user fee agreement. The reforms included in the recently enacted 21st Century Cures Act combined with the robust performance goals and additional process improvements in the MDUFA IV agreement negotiated between industry and the agency in 2016 will continue the trend of steady progress at the agency. That’s good for FDA, innovation, and, most importantly, patients.

    On the reimbursement front, we have some work to do to mirror the progress we’ve seen at FDA. We often discuss as an industry—including companies of all sizes and the VC community—the challenges of navigating the complex coding, coverage, and payment processes at CMS. There is much the agency can do to improve the consistency and transparency of its processes to help ensure that all beneficiaries have timely access to the innovative technologies they need. We look forward to working with the new administration on pro-patient, pro-innovation polices that recognize the value medical technology provides as part of the solution to the healthcare challenges we face.

    Fenske: Before we wrap up, do you have any closing comments you’d like to share?
    Yared:
    AdvaMed has worked—and continues to work—diligently to serve the needs of smaller companies, in particular with regard to capital formation and to support the innovation ecosystem. This effort requires the entire industry to come around and work together. There is no company too small to be a member of AdvaMed. There are many benefits to joining AdvaMed now: member companies benefit from the savings provided by the AdvaMed Purchasing Group; executives are provided ample opportunities to network with their peers of all sizes of companies; member companies have an ability to influence key policies; and last but not least, member companies can unite their voices, ensuring that our industry is heard clearly in Washington and beyond. 
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