Recession squeezes new medical device developers

As you might imagine, this is not a great time to be making what might be called an "experimental" medical device, as it gives financially-strapped health plans and hospitals one more reason to say no. Of late, that's just what's been happening to smaller medical device companies working on promising but unproven technologies, observers say.

Some medical device companies are being forced to make substantial layoffs. That was the case with Burlington, MA-based InfraReDx, which makes a laser-scanning system that finds signs of coronary artery disease. InfraReDx has cut its workforce from 92 to 72, and might have even emptied its bank account if it hadn't received additional investments recently, notes an article from The New York Times.

Others are having to make big cutbacks in other areas. PLC Medical Systems of Franklin, MA, which makes a new hydration and urine collection system to protect patients with damaged kidneys from X-ray side effects, has had to cancel a scheduled clinical trial. Its CEO concluded that it might not be able to get the $6 million needed to conduct the trial, despite having already lined up hospitals and patients to participate.

The question is, how this will impact the medical device industry--not to mention patient health? Some experts argue that such innovations seldom produce major new health benefits. Others, meanwhile, suggest that without smaller, agile firms in play, some important new devices would never exist. No one's likely to resolve this argument in the near future, that seems certain.

To learn more about this issue:
- read this piece from The New York Times