Characteristics of Disruptive Innovation Within the Medical Device Industry

Innovation within the medical device industry had led to tremendous advances in the provision of care for patients worldwide. Continued progress in the treatment of disease will require effective processes for managing and analyzing innovation within this industry. Popular models of innovation exist for many industries outside of the medical realm; however, an extensive literature search uncovered a limited body of work related to innovation within the medical device industry. Specifically, literature that examines the application of the principles of disruptive innovation to the medical device industry is limited in scope and in quantity. It is theorized that the medical device industry may have unique characteristics for disruptive innovation due to the unique economic and regulatory structures that exist within this industry. This thesis applies the principles of disruptive innovation that were popularized by Clayton Christenson's seminal work, "The Innovator's Dilemma", to the medical device industry. These characteristics are subsequently delineated and evaluated through examination of the prosthetic cardiac valve industry. This industry serves as an effective case study due to the long history of innovation and the emergence of new disruptive technology within this specialty. The categorization of a "disruptive" innovation was made when a given technology altered the value proposition for treating a disease, relative to incumbent technology. This case study was evaluated along metrics of performance characteristics, the perception of leading customers, the ability to prospectively analyze markets, and the profitability of disruptive innovation for the incumbent firm. Conclusions were reached based on an examination of relevant literature and primary research conducted with thought leaders in this area. This research supports the conclusion that the cardiac valve industry has experienced unique characteristics in the development and commercialization of disruptive innovations. Specifically, incentives appear to exist within this industry that support development and commercialization of disruptive innovations by industry incumbents. Furthermore, the importance of understanding what value proposition is being disrupted is paramount in effectively understanding the incentives of manufacturers to innovate. When a technology is developed that is disruptive to a procedure, then the manufacturer tends to behave similar to a "newentrant" within the Christenson framework. This appears to also be true when the innovation is disruptive to that manufacturer's legacy products. Additional research is warranted in extrapolating this finding to the broader medical device industry. Thesis Supervisor: Dr. Frederick J. Schoen, MD, PhD Thesis Supervisor: Josh Tolkoff This thesis is dedicated to: My mother for always telling me, "You can do anything you put your mind to", My father for teaching me that "Anything worth doing is worth doing right", Lindsey, for being a constant source of support, advice, and inspiration. Thank you as well to the HST community, which has provided unimaginable opportunities to learn about, and gain exposure to, the intersecting worlds of technology and medical care. Specifically, thank you to Dr. Frederick J. Schoen and Josh Tolkoff for their guidance on this project and to Dr. Richard Cohen, Dr. Robert Padera, Dr. Rox Anderson, Dr. Warren Zapol, Dr. Elazer Edelman and all of my classmates in the Biomedical Enterprise Program for their support and guidance.