In the previous article, I focussed on getting a lubricious hydrophilic coating to market in spec, and what goes into specifications. I gave references to other articles that can help with finding out more about coating selection. In this article I want to focus on time, as in, the time to market for a medical device with a hydrophilic coating.
The first thing to do here is point you to an article from this blog called Why You Won't Get Your Coated Medical Device to Market in 6 Months. This article explains exactly that.
Next I want to elaborate on some of the points I made in that article about time to market. The biggest killer of timelines is not taking into account the time it takes to set up and validate a coating process. I have experienced several cases where a customer has Biocoat do some test coatings for a client successfully, to then have the client say, "Ok, so let's just have you make another 10,000 and we'll be set." Hold the phone! That is not how it works, even if we were a contract manufacturer. "But why doesn't it work like that? You made some great samples, just make more!", says the customer.
Understandable question if you are not working for a hydrophilic coating company, so let me explain.
As I have said before, hydrophilic coatings are not trivial. They are a sophisticated component that forms a substantial piece of the manufacturing process. There is a big difference between whipping up 4 or 40 samples versus producing 10,000 GMP-grade medical devices suitable for use in vivo. If I am doing research samples, I can put a coating onto a device anyway I know how, and as long as it works on a small scale, that is all I care about in the initial stage because I just want the customer to successfully test it on an animal or mechanical tester. Once the device is to come into contact with human subjects, a whole new world of laws and regulations apply.
To make a GMP-grade medical device, a GMP-grade (Good Manufacturing Practice) process is needed. That requires that each device or lot of devices has a batch record and full set of SOP's for the creation of the device, and all of that made on a process that has itself been validated for its installation, operation, and performance (IQ, OQ, PQ). There is no magic validated process anywhere in the world for applying a hydrophilic coating to any device that it may come across, even "easy" devices. Every new device that comes along requires new SOP's and a new process. That requires time to set up. Contract Manufacturers make their living by doing this very thing, but even they need time.
Moreover, the scaleup from making 10 to 100 devices is not a one-to-one thing when making 10,000 devices or 100,000 devices. In each level of production there will be different degrees of automation. There will be different numbers of each piece of equipment, and different numbers of operators. This all has to be planned out.
Medical Device Engineers are so focussed on the processes for extruding their tubing and drawing their wires, and validating those processes, that they forget all about the fact that they need to do the same thing for their hydrophilic coatings. Except here it is worse, because there ARE magic machines and validated processes for making some kinds of tubing and wires, but that is not so for lubricious hydrophilic coatings.
So, again, if you want your coated device on time, make sure you factor in the process development time. You will need anywhere from 6 months to a year to do this properly.
I have not mused about the business in several posts, so let me get back to that for a bit.
When it comes to coatings for customers, the focus is on the customer, and rightly so. Naturally, for such a deal to occur the customer must be interested in the hydrophilic coating (or other coating) company, but what is on the other side of the coin?
This is: the coating company must be interested in you too.
We do not talk about this enough, and openly, but doing so will save a lot of people a lot of wasted time on both sides of the relationship. Every slippery coating company wants to land the gigantic medical device suppliers of the world, and they also want to land a good many of the smaller players too! When speaking of catheters, guidewires, introducers and other "conventional" devices, those people have nothing to worry about. A coating company will nearly always welcome you with open arms.
What about the less obvious devices that may or may not benefit from a coating? I generally go by these criteria when thinking about taking on a customer:
1) Application of the coating onto the device should be achievable, and with minimal manufacturing nightmares.
2) The volume produced should be significant, on a yearly basis.
3) The customer should be an established, if not reputable, business, not a university, not a lone physian, not a retired consultant with no resources, not a grad student, etc..
4) The application should be in the medical or diagnostic field, or at least if not in the medical field, the forces and environmental conditions where the coating is used should be along the same lines as medical forces/conditions.
5) The customer must undestand that coatings are not free. (Don't laugh! I have been asked to give our services gratis!)
Much of this is talked about in this paper on hydrophilic coatings. If you have a medical device with an odd shape, the best thing to do is ask someone like me or another person working at a hydrophilic coating company. Anyone with some coating experience will do. I have seen great ideas and great devices foiled by the simple fact that getting the coating onto the darned thing is nigh impossible.
I have a large family. One day I will probably go broke from the number of college educations I need to pay for. In order to have any hope of staving off bankruptcy, I need to keep the high-value customers rolling in. A high-value customer is quite simply a customer that brings in much more money than we spend on maintaining them.
If your company is in India (or another faraway land), and you want to buy $10,000 worth of material every year, and my company needs to spend $12,000 to visit you and provide customer service to you every year, guess what? We are not interested. That is not high-value.
If you are a lone-actor that wants to coat 5 pieces of stainless steel, once, ever, that prospect really holds no hope for a coating company. It is wonderful that a century from now your device will be the greatest thing since sliced bread with a volume of millions per year, but our outlook is more toward the 2 to 8-year time scale. Unless your device is already in a company an under initial stages of Design Control, it is probably not less than 8 years out.
Honestly, this is more related to the previous two points than anything else. It takes a serious company to A) know how to develop a medical device in today's world and B) be capable of producing the volumes necessary to make us both successful.
Physicians (and occasionally Professors) do provide great design ideas for medical devices, but they themselves have often dedicated little time to understanding how a device is designed and commercialized. Going it alone is not an option. If you come to me as a lone physician unattached to a company, I will thank you for your time and point you to Coatings2Go.
I will also say the same to graduate students, and consultants that just want to try something out, and for the same reasons.
Simply having a company to work from is not always a guarantee either. It is necessary to demonstrate a knowledge of product development in the medical field, if this is a medical device.
Medical Devices and Non-Medical Uses
I do not want to make it seem like trying to coat non-medical devices with hydrophilic coatings is pointless. It is not, IF you know what the characteristics of the coating are. Nevertheless, I still get calls from people that want to coat valves for the crude oil industry and truck parts, etc. They usually do not bother to read (and admittedly it may not be that easy to find) the material that talks about the impermanent nature of hydrophilic coatings, especially under high abrasion and repeated use. High abrasion and repeated use are two phrases that sum up the vast majority of non-medical uses, and thereby eliminate most of those uses with medical grade hydrophilics.
If you are from a non-medical company, think long and hard before calling up a supplier of something that is impermanent and mostly geared for disposable single-use devices.
Coatings Cost $$
See the first paragraph under Production Volume. The good news about this is that although coatings cost money, the goal here is to make the customer money as well. Both parties must benefit.
This rules out charities that produce medical devices, unless of course they find a vendor willing to donate. It is not so prevalent for people to ask for lifetime free coating supplies, but often they can be taken aback by the costs associated with coatings. Often, hydrophilic coatings, drug delivery coatings, and antimicrobial coatings are more epxensive than non-stick PTFE coatings, and other sorts of barrier coatings.
This year is the first year that MDM East is in Philadelphia, which is essentially my own backyard. I had a chance to spend two days at the show (and it is not over yet by the time of this writing.)
Many of the regular crowd members of the hydrophilic coating industry were present at the show. I saw booths for Advansource, Hydromer, BioInteractions, DSM, Surmodics, Harland, and that company that owns Medi-Solv. Absent were booths for AST, Coatings2Go, and my own employer, Biocoat. (Forgive me, please, if I forgot anyone.)
Not having to man a booth gave me a lot of time to wander and meet with people. Interestingly, I had the impression from just about all of the hydrophilic coating companies that the show was "meh". (That would be an onomontopeia for the sound you make when you are generally NOT impressed.)
Really that all boils down to number of leads obtained at the show. The comment I heard most often, multiple times, was that the show was great for catching up with current customers and seeing people that you already know, but not so great for meeting new faces. Comments went on to suggest that the MDM/BIOMED show circuit is saturated, i.e. there are too many of them in too many places that are not so far away from each other (like Chicago vs. Minneapolis, anyone?). Coating companies are hungry for new blood, and frankly a little tired of fighting over the same customers time after time.
I found an interesting article talking about Bayer's coating business and its increased focus on the Chinese market. Let me point out that the business of "coatings" is gigantic and comprises everything from paint, to industrial coatings, aerospace surfaces, and yes, even medical device coatings. In this article, Bayer is talking about moving a multiple hundreds of million (perhaps over a billion?) dollar operation in a market just as large.
By contrast, hydrophilic coatings are an almost infintesimally small part of the overall business of "coatings". Bayer does indeed have a hydrophilic coating it obtained when it bought the business from Lombard Medical. However, I am not sure that Bayer yet realizes that this market is infintesimally small compared to its other businesses.
In my guestimation, the entire market for hydrophilic coatings, in the world, is not over $120 million. (Although it is definitely growing fast.) You have to remember, this is not medical device revenue. This is revenue for hydrophilic coatings sold to the medical device companies that eventually put them on products. Effectively, what a hydrophilic coating company sells is a "bottle of stuff", or a "bottle of goo", as Peg Palmer is often fond of saying. How much money you can get for goo is limited to whatever license fees, royalties, or direct revenue you can get for it. Unless you capture the entire market, your realistic expectations are likely to be smaller than the rounding error of one of Bayer's typical products.
The folks at MDDI have posted an article contributed by me on the Regulatory and Economic Landscape for Hydrophilic Coatings, in my opinion. Normally I post these musings here, but MDDI wanted to pick up the article from me, so enjoy!
If you are looking for coatings, and want to talk personally with the big players in that arena, do not hesitate to attend the MDM Minneapolis trade show coming up.
In this month's issue of Medical Design magazine, the folks from AdvanSource Biomaterials have an article that talks about coatings selection.
Click here to give it a read.
A similar article by Biocoat will be printed in MDDI Magazine this May. The online version already appears here.
First of all, I want to wish everyone well after this US Thanksgiving weekend. Now off to business!
When I was in college, there were two kinds of science and math courses. There was science and math "For scientists", and there was science and math "For Engineers". Generally, the "For Engineers" suffix meant the course was more Calculus-based, which everyone took to mean "harder". However, when it comes to business, as an engineer myself (who also happens to have an MBA), I like to make things easier for engineers who are usually the first people to call me up. So here is how the hydrophilic coatings business works.
In most businesses, when you want to buy something, you call them up and ask for a price. Then you make some decision to buy or not. If you decide to buy, you hand them your money and they ship you the product. Done.
The first mistake most people who call me make is thinking that getting a hydrophilic coating is exactly like that. It's not. It's nothing like that for most vendors.
Since (as I have said probably a million times before on this blog) hydrophilic coatings are non-trivial components that require a lot of fine tuning and process work, they cannot be sold in this fashion. If you were to call me up and ask for some coating solution and I were to take your money and send you a bottle of it, you would have no idea what to do with it. You might think you do, and you might try to do something, and you might even get a decent coating on a lab-bench scale, but even if you got that far, you would run into some significant delays when you tried to develop and validate a process you have no idea about. Eventually, you MIGHT get a process you can use, but without any help from one of us, you would be re-inventing the wheel and it might take you a couple of years or more. There are so many idiosyncracies with each hydrophilic coating out there, that it will take you a while to figure it out, even if you are already a coatings expert. Then, on top of all that, the hydrophilic coatings company would not make any money at all and would go out of business, and you would be left with nothing. (Selling bottles of coating solution at near cost is a bit of a dud as far as business models go.)
So, this is why we do not do it that way. There is a body of know-how surrounding hydrophilic coatings that you, as the client, will require to get up and running, and only a few companies are willing to share that know-how, for a price. Enter the "License Fee" and the "Royalty".
Some hydrophilic coatings are patented and some have had their patents run out a long time ago. Either way, what you will often be asked to do is pay a license fee for using a hydrophilic coating. The license fee will cover the patented material and/or the know-how. For this license fee, you should get a lot of tech support, technology transfer, and a can-do customer service attitude. If you do not, then you might have picked the wrong hydrophilic coatings vendor.
However, even before the license fee is paid, you will need to do some development. Each device is unique and requires its own tweaks when coating it. To do this, you will need to work with the hydrophilic coatings company before you license. That means, you will need to send them samples of your device and have them coated by the vendor as a test. When you get the devices back, you can see if the coating is appropriate, and it may take several rounds of testing back and forth to see if you can make the coating work. Not everything works on the first try.
Some differences between vendors occur at this point. Some vendors will charge you an arm and a leg for "Development". They will make you sign a big contract, and they will make you pay a lot of money for it. Other vendors won't, unless your project is so far out that it will require significant time and resources from the coatings vendor to figure out how to coat your product. If all you have is a simple catheter, and a coatings vendor wants to charge you major dollars to sign a development agreement, go somewhere else. You should be able to get the first few samples coated for free, and then after that each sample for a nominal fee.
Another difference will occur at the royalty end. The actual royalty rate that each company charges is secret, but we all know approximately what our competitors charge. The big difference here is whether the coatings vendor charges minimum royalties or not. If the coating vendor charges you $100,000 minimum royalties per quarter just to maintain your license agreement, steer clear. The point of a minimum royalty is to make you worthwhile to the coatings company. If you are a small operation, it is not lucrative for us to coat for you. The way some coatings companies get around that is by charging you a minimum royalty to make sure you are serious and to make you worthwhile for them business-wise. However, if you are coating anything upwards of 10,000 items per year, there are plenty of hydrophilic coating companies that will take you without a minimum royalty. If you are coating only 500 units per year that sell for $50 each, then not so much. Again, this is a business, and we cannot coat things that do not make us profit, else we will no longer be in business and everyone will suffer.
So, to sum up, this is not a normal buying cycle. The steps for buying a hydrophilic coating break down thusly:
1) Call up vendor and ask for basic coating properties
2) Send sample of your device for vendor to coat
3) Receive your coated sample and test it.
4) Repeat Steps 2 and 3 as often as needed until you are satisfied with the coating on your product
5) Sign a license agreement with the hydrophilic coating company
6) Begin transfering the coating process to your facility or a designated third party's facility
7) Start bringing up the process and testing its parameters, i.e. limit testing, etc.
8) In parallel, start coating your own samples for Design Verification and Design Validation of the device
9) Nail down the manufacturing process and Validate it
10) Start producing your coated devices.
I just got back from an interesting business trip that touched on a central theme: product vs process feasibility.
I frequently get the question "Is your hydrophilic coating good for X application?" Where "X" is anything from bread and butter catheters to the bizarre non-medical application. The answer to that question is never a yes or no. It always depends on who's asking. The proper question is, "Is your hydrophilic coating good for MY X application, under MY circumstances and environments?" This is what product feasibility is really about.
Let's say you have a catheter and you are making over 100 passes with it into and out of the body in a single surgery. I know that's extreme, but stay with me here. Now let's say you ask me the question, "Can I sterilize this twice with ethylene oxide?" For most hydrophilic coatings, in this case, I would answer, "I wouldn't do that, but you can test it and see." Why? Because every time you sterilize a polymeric coating, no matter whose coating it is, you lose a little bit of the coating. Losing coating is a foregone conclusion, but it is ONLY a bad thing if you lose too much. The object is to retain enough coating to be "good enough" to get through one of your procedures with lots of room to spare.
Now let's say a different person comes to me with an identical catheter that only makes 1 pass in a single surgery. It goes in and out and that's it. When asked the same question about sterilizing twice with ethylene oxide, I would answer, "Yeah, I bet you could! But you should test it and see." See the difference? From what I know about my company's coating, I know it could easily handle something like that. (However, I still always make sure to add in that the medical device company that uses it on their device is ultimately responsible for verifying.)
Great, so now we understand how to think about whether or not a coating SHOULD be used on a product. The next question is CAN it?
That is a different question all together. That is process feasibility. If you give a sample to Biocoat and tell us to coat it, we will. We will slap a coating on that thing any way we can, just so you can get a chance to see if it works or not in your application. That does not mean, however, that what we did is reproducible or controlled. It's only research. After or in parallel with your product feasibility testing, you need to think about process feasibility.... and you need to think about it early:
What is the general coating process?
What parameters control coating quality?
How robust is the process? Is it forgiving, or a bear?
How far can I change things like temperatures, speeds, humidity readings, cure times, etc. without messing something up?
How does the geometry of my device affect the coating thickness, adhesion, and lubricity?
What kind of unique equipment will my device need for coating? (Very rarely can two different devices use the same tooling and equipment for coating.)
How repeatable is this process? How much do lubricity and durability vary normally?
What are my cycle times and throughput?
It is quite possible that you will get a beautiful coating on your test device, but later find out you can't scale it up.... or that you can't scale it up cheaply. So, having a coating is not just dependent on the coating itself, but also the process involved with applying it. Thus, both the concept of product feasibility and process feasibility need to be managed simultaneously, and you should always start EARLY.
Business models for selling hydrophilic coatings generally seem to be converging: the coating company offers its technology to a medical device customer.... the medical device customer either licenses the technology from the coatings company and pays a license fee/royalty, or they opt to have a third party contract manufacturer put the coating on their device for them, in which case the contract manufacturer is actually the licensee of the coatings company and the license fee/royalty is baked into whatever the contractor charges the medical device customer. Sometimes, the coating company is also a contract manufacturer. Other times, the coating company may sell equipment of its own to the medical device customer to help them bring the process in house.
The key to everything, of course, is that it all needs to be profitable for everyone. From what I have seen, this means that final device manufacturers benefit the most from licensing/contracting the coatings, as opposed to component manufacturers.
More specifically, here is what I mean. Say you are a tubing manufacturer. You extrude tubing for various devices, i.e. catheters, etc., and you sell the tubing to the big companies like Medtronic, J&J, St. Jude, etc. Chances are you sell a piece of tubing for a few cents. Occasionally, a tubing manufacturer gets it in its head that it would like to offer a hydrophilic-coated line of tubing. This is not optimal for a couple of reasons. First, the cost of the coating in many cases will be several times the cost of the tubing. You cannot take a 50-cent piece of tubing and put a $1 to $5 coating on it and expect to be able to sell that. Now, there are cheap coatings out there, but you get what you pay for. A lubricious hydrophilic coating that claims it can keep under $1 per device at a production of 10,000 units per year, including the cost of labor and equipment is either a) lying or b) going to rub off/dissolve/abrade after several cycles or c) has a coefficient of friction higher than most leading hydrophilic coatings (0.0003 to 0.03). (Production volumes of over 1 million are a different story.) The "cadillac" coatings are better than that in terms of lubricity and durability, but they require more money in materials and indirect costs. Second, this is a bad deal for the hydrophilic coating company. When the Medtronics and St. Judes of the world approach coating companies directly, they are looking to coat devices that sell for $100 to $1000, sometimes more. The royalties involved in this can be in the double digit dollars per device. Royalties are what allow most hydrophilic coating companies to exist: they are 100% margin, and require little or no work. The other aspects of the business aren't nearly as lucrative. Given that, why would a hydrophilic coating company want to sell to a tubing manufacturer, to continue with this example? At most, the coating company would get a few cents per tube, if that, and this money may be more from the margins on the coating solutions rather than an actual royalty because a tubing manufacturer is probably not willing to pay much royalty. It makes no sense for either side with this business model.
Of course, the mathematics can change with higher volumes, and this is also not to say that you can't make a deal that some coating company might take. Either way, it is better to know what both parties are entering.
When calling up a vendor for hydrophilic coatings as a possible source for your device, it is useful to have certain information handy. This will help ensure smooth communication between you and the vendor and minimize time wasting on either side. The last thing you want is to start up a project that was a showstopper from the get-go. Here we go:
- Know what field your device is used. (Sounds stupid, but people do sometimes call for coatings not knowing this simple thing. Some coatings companies have exclusive licenses that shut them out of certain fields.)
- Have some projections for sales/manufacturing - How many widgets do you want to coat in a year? This influences price and lots of other things.
- What kind of device is this? A catheter? Tubing? An instrument? A diagnostic surface? Some other odd device?
- What surface do you want coated? Inner diameter? Outer diameter? One side? Both sides?
- What dimensions are the device and how far along the length/width do you want coated?
- What is a very rough selling price for your finished device? This may tell you if the device is worth coating at all. Cheap devices need cheap coatings. Expensive devices can have fancier/more advanced ones.
- In which stage of development is your device? Pre-feasibility/Research? Feasibility? Design Inputs? Verification? Clinical trials? The later you are, the worse off you are.
- What property of the coating interests you most? Lubricity? Durability? Hydrophilicity? Non-thrombogenicity? Anti-microbial agents? Other?
- How many devices do you wish to coat? One? More? Does your device have multiple parts or pieces that need to be coated separately?
- What is the substrate material you wish to coat?
- How long until you plan to launch the finished device? The closer you are to "D-Day", the more difficult it could be to change up your process by adding a coating step to it.
- How long does the device dwell in the body? Minutes? Hours? Days? Weeks? Months? Forever?
- How may times will this device be sterilized, and how will it be sterilized?
- If this device is being passed in and out of the vasculature or some other tissue, how many times will it pass in and out in a single surgery?
There are other questions, but if you have a handle on these, both you and the coating vendor will definitely be off to a great start, or you will realize that the fit might be better with someone else after you've gotten this basic info out of the way.