Supportability Forum Addresses Medical Device Maintenance and Repair

On November 2 and 3, a group of 30 industry leaders got together in Arlington, Virginia.  AAMI hosts (and footed a large part of the bill for) this meeting to bring manufacturers, HTM, ISOs, GPOs, regulators, and educators together to address the issues surrounding the practices of making medical equipment difficult (or expensive) to maintain for the owner of the equipment.  This is the first face-to-face meeting since the task force started at AAMI 2012 in Charlotte, NC.

More details will be forthcoming from AAMI, but in this blog, I want to recognize the outstanding manufacturers who are obviously enlightened and chose to be a part of this groundbreaking initiative.  The medical equipment manufacturers represented are:






I really want to hand it to these companies who are taking an active interest in making the active effort to evolve and do the right thing for healthcare by exploring more openness and transparency in their medical equipment life cycle service plans.

Patrick Lynch

Chief Do-Gooder

Biomeds Without Borders

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The 5 Most Overpaid Medtech CEOs

Public interest in ballooning CEO pay spiked recently, after the billionaire Republican presidential candidate Donald Trump called it “disgraceful” and “a total and complete joke.” Speaking to his populist base, he stressed the need for reinvigorating U.S. manufacturing but essentially argued that CEOs are already overpaid: “I know companies very well and the CEO puts in all his friends…and they get whatever they want you know because their friends love sitting on the board.”

Here at Qmed, we delved into corporate SEC filings to figure out which CEOs arguably get paid more than they should, comparing their pay to their company’s financial performance.

We ranked overall compensation for CEOs at 18 of the largest medical device companies publicly traded in the U.S. We then compared the compensation rank with a company performance ranking based on four factors: revenue growth, five-year stock performance compared to the S&P 500, earnings growth, and total revenue (as a control for size).

Here are the five CEOs whose compensation ranking was much larger than the company performance ranking .

1. Stephen MacMillan, Hologic

Compensation Rank: 4

Company Performance Rank: 18

Hologic provided MacMillan with generous awards to recruit him in December 2013, during the first quarter of Hologic’s fiscal year ended September 27, 2014. Much of the $24.5 million compensation the former Stryker CEO received came from $15.3 million in stock awards under MacMillan’s employment agreement.

It was slow going, however, under MacMillan’s initial leadership of the Bedford, MA–based diagnostic and medical imaging equipment maker. Revenue only grew 1.5% during the 2014 fiscal year, 14th among the 18 companies analyzed, and earnings of $17.3 million were less than 1% of revenue from the previous year—though it did mark a turnaround from the nearly $1.2 billion that Hologic lost during the 2013 fiscal year.

MacMillan, however, appears to be more than earning his keep this year. Hologic had the best performing stock among large medical device companies during the first nine months of 2015. Its stock value was up more than 45% during the time period. Hologic says it has been seeing accelerated adoption of its FDA-approved Genius 3D mammography systems. 3-D imaging is able to detect 41% more invasive cancers than standard 2-D imaging, according to Hologic.

2. Michael Mahoney, Boston Scientific

Compensation Rank: 11

Company Performance Rank: 16

While Michael Mahoney has helped turn around the performance of Boston Scientific, it comes as a cost. Mahoney is one of the best paid CEOs in the medical device industry. In 2014, he made $10,527,884—only slightly less than the tenth-highest paid medtech CEO Timothy Ring of C.R. Bard, who made $10,840,935.

Mahoney’s annual compensation has hovered in the $10–$12 million range since he took over the Boston Sci’s CEO post in late 2012.

In 2012, the Minneapolis/St. Paul Business Journal explained that Mahoney brought in nearly $12 million after working only 76 days after replacing retiring the then CEO Hank Kucheman. Most of the money from then until now comes from stock options.

For the company’s most recent fiscal year, he received total compensation of more than $10.5 million. Meanwhile, the company saw revenue grow 3.3% the same year, placing the company in the middle of the pack.

A person investing $100 in Boston Scientific stock at the end of 2009 would have had $147.22-worth of stock five years later—$57.92 less than if they had simply invested it in the S&P 500. It was one of the worst rankings for stock performance.

However, Boston Scientific stock has been showing improvement this year, up more than 26% in value for the first nine months of 2015. In fact, a report from Evaluate Medtech found that the company’s share price rose 34% in the first six months of the year—the biggest increase of any medtech company with $15 billion or more in revenue. Boston Scientific’s interventional cardiology business has played an important role helping to drive the company forward.

3. Miles White, Abbott Labs

Compensation Rank: 6

Company Performance Rank: 11

White’s $17.3 million in total compensation was actually down a bit during the fiscal year ended December 31, 2014; he received $20.9 million the year before. White’s option awards were valued at $4.6 million, a little more than half what he received the year before.

Company performance, however, does not seem to have kept up. Revenue was up only 3% during the year, and profits were down 11%. Abbott Labs comes in 11th for five-year stock performance compared to the S&P 500; it’s stock price was only slightly up during the first nine months of 2015.

4. Jeffrey Immelt, GE

Compensation Rank: 2

Company Performance Rank: 6

It makes sense that Immelt’s $37.3 million annual compensation would place him near the top of the list, especially since the industrial conglomerate General Electric is one of the largest companies in the world with $148.6 billion in annual revenues. Only $18.3 billion of that revenue came from GE Healthcare, but the amount still makes GE one of the largest medical device companies in the world.

Qmed controlled for revenue size in its company performance rankings, and yet GE still came in sixth. It was 13th for revenue growth and 13th for earnings growth, measured as a percentage of the previous year’s revenue.

GE Healthcare revenue in 2014 was only up 1%, to $18.3 billion, amid slow growth in developed markets outside the U.S.

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Dishonest Company from Colombia


September 15, 2015 06:19

If you receive an inquiry from a company Teknopolis in Bogota Colombia beware because it is a scam. They inquire about 3M Littman Stethoscopes and ask to pay with credit cards and ship next day. The person who will contact you is Wiston Tobon. Below find the info:

carrera 30 # 19 – 38 local 155
tel 57301 5394674
whatsapp 57300 2923659
Bogota Colombia

Beware of these scammers!

Frank Bleischmidt

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The following post was discovered on as an advisory regarding some alleged dirty dealing regarding an PET/CT sale/purchase.   The original poster is iodentifieds at the end of this blog, if you wish further details.  Pat


August 01, 2015 12:44

John Gebhardt signed a contract and agreed to sell us a PET/CT for $335,000.

We sent him a $51,367 deposit in January of this year and he disappeared refusing to answer emails or return phone calls.

Not only has he not returned our deposit but he was trying to sell the same unit to other dealers.

Be careful of him and John, if you see this, please return our deposit.

Nationwide Imaging Services Inc

Robert Manetta, Manager
DOTmed user since November 2012

2301 Atlantic Avenue
Manasquan, NJ 08736 USA
Phone: +1 (732) 262-3115

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Apple Doesn’t Want You To Be Able To Fix Your iPhone—Here’s Why

This applies to consumer goods from Apple, but it also applies to many medical devices.   Pat


The cure for planned Apple-escence

BY Kendra Pierre-Louis

 “It’s not just Apple,” says Gordon-Byrne. “Any manufacturer that doesn’t want to provide parts and tools can instantly, without any difficulty, refuse to repair equipment and say that your only choice is to buy a new product.”

Twenty-five years ago, my family’s television, a sturdy mass of wood and tubes, went on the fritz. The curved glass screen had taken to displaying everything from the Smurfs to Peter Jennings in shades of green. Shipping the massive box to the manufacturer was out of the question. Instead, a call to a local, independent repairperson was placed. For a fraction of the cost of replacement, he restored our set to its Technicolor glory.

Just 20 years later, when an errant elbow cracked my family’s three-year-old flat-screen, no repair calls were made. What was the point? Replacing it would be cheaper, so that TV joined the 41.8 million tons of e-waste discarded around the world in 2014— much of it toxic.

A generation ago, the idea of tossing out a broken television would have seemed wasteful, or just plain stupid. Conventional wisdom suggests that rapid advances in technology—your average smartphone, after all, has more computing power than NASA used for the original Apollo missions—combined with the declining costs of offshore labor, means the culture of repair is losing the free-market battle against cheap replacement costs. Right?

Wrong, says Gay Gordon-Byrne, executive director of the Digital Right to Repair Coalition. The coalition of tinkerers, used-equipment sellers, e-waste reduction groups and concerned individuals came together in 2013 to serve as the public voice on issues of the digital aftermarket: what we’re allowed— and increasingly not allowed—to do with our products.

“The lack of repairability is deliberate on the part of manufacturers,” says Gordon-Byrne. It takes proper construction to create devices that can be repaired, as well as basic support to allow those repairs to happen. Many items are unfixable by design, like Apple’s 2015 Retina Macbook, which uses proprietary screws, and solders and glues components in place. But many items could be repaired, with the right parts and knowledge. The local repairperson of my childhood was aided by manufacturers’ providing manuals and selling parts. Those are two things that, for the most part, no longer happen.

“Their business model now,” says Gordon-Byrne, “is: You ship the TV back to them. They fix it, but they charge you whatever they want. They don’t allow Mr. Bob’s TV repair to buy the parts, the tools, or to get the manuals.”

Companies often simply urge customers to purchase a new device. “I heard this story recently,” says Gordon-Byrne. “A teenager’s headphone jack on his iPhone didn’t work, so he took it to the Apple Store for repair. The store told him that his phone was off warranty and, regardless, they don’t repair headphone jacks.” Instead, he was given the option to trade in for a new phone at a hefty cost of $275. In this case he was lucky: The headphone jack is a common component across smartphones and can be purchased in bulk for as little as 10 cents. A tinkerer was able to fix the supposedly irreparable phone for $25. In 2014, however, new manufacturer guidelines released by Apple prompted rumors that the company may phase out this standard connector for its own proprietary “lightning” port. (Apple did not respond to a request for comment.)

“It’s not just Apple,” says Gordon-Byrne. “Any manufacturer that doesn’t want to provide parts and tools can instantly, without any difficulty, refuse to repair equipment and say that your only choice is to buy a new product.”

That doesn’t mean repair is impossible—just difficult. For parts, one must typically turn to Asian suppliers that skirt intellectual property laws and often lack quality control. For information, one must depend on individuals who dissect devices on YouTube and websites like iFixit, a crowdsourced part of the Right to Repair Coalition that provides instruction manuals and ranks products by ease of repair.

Increasingly, companies create barriers in the form of proprietary black box software. Gordon-Byrne tells the story of a woman with a broken refrigerator who was able to identify which part had broken, procure the digital part, and successfully replace it—despite a lack of official documentation—only to be stymied by the need for a reset code. The only way to get the code? Paying for a technician to come out and enter it. Gordon-Byrne calls such practices “abusive.”

 The tractor company John Deere has said that owning its products is little more than a license to use them. It argues that any modification of their software—say, to fix a broken harvester in a rural place where a technician may not arrive for days, but crops can spoil in hours—would violate copyright law.

Such policies mean that the next generation of engineers won’t be able to tinker as children without risking a lawsuit. Imagine if the Wright Brothers had been prevented from reengineering the bike.

In addition, the net result of such restrictions is higher repair costs, fewer jobs and more toxic waste. As of 2011, Americans were generating 3.4 million tons of electronic waste annually, 75 percent of which wound up in incinerators, according to the EPA. Electronic waste is a toxic stew of more than 1,000 materials. A typical tube television includes up to 8 pounds of lead, according to the Electronics TakeBack Coalition. Newer flat screens have less lead, but more mercury. These chemicals contaminate soil and drinking water. If burned, they foul the air.

Recycling is not the answer, either. We ship about 40 percent of electronics earmarked for recycling to countries like China, India, Ghana and Nigeria. Because so many electronics are not designed to be repaired, taking apart these products is hazardous. It frequently involves burning them or using corrosive acids to melt away the plastic and extract the gold, silver, copper and other precious metals that, combined with low wages, make electronics recycling profitable. In Xiejia, China, with more than 3,000 registered recycling businesses, the money comes at a cost: Lead levels in children’s bloodstreams have been high enough to cause irreversible brain damage.

In New York and Minnesota, the coalition has gotten legislation introduced—though not yet passed—that would require manufacturers to provide service information, security updates and replacement parts. It’s based on a Massachusetts auto repair bill, passed in 2012, that requires auto companies to standardize their diagnostic codes and repair data by 2018. The bills in New York and Minnesota, however, are more expansive, encompassing anything that contains a microchip, from medical equipment to tractors to cellphones.

“We’re losing jobs in the state of New York because these large corporations are mandating repair work be done by their own companies,” says Republican state Sen. Phil Boyle, who introduced the bill in New York. “The more vertical integration there is, the less free market there is. The small repair shop down the street needs to stay in business.”

Kendra Pierre-Louis

Kendra Pierre-Louis is a member of the Rural America In These Times’ Board of Editors. Kendra is a Queens, New York-based journalist. Her work has appeared in, Newsweek, Earth Island Journal and Modern Farmer. She is the author of Green Washed: Why We Can’t Buy Our Way to a Green Planet (Ig Publishing 2012).

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Medtronic’s CEO Made a Ton of Money Last Year

Posted in Medical Device Business by Chris Newmarker on July 27, 2015

Much of Omar Ishrak’s $39.5 million in compensation was related to Medtronic’s $48 billion merger with Covidien.

Medtronic Omar Ishrak
Medtronic CEO Omar Ishrak

Chris Newmarker

Total compensation for Medtronic CEO Omar Ishrak skyrocketed to a whopping $39.5 million for the company’s fiscal year ended April 24, according to Medtronic’s recently filed proxy statement with the SEC.

The $39.5 million amount would make him one of the highest paid CEOs in the medical device industry. About $25.6 million of the compensation, though, was mostly to help Ishrak pay for the special U.S. excise taxes he and other top Medtronic executives personally owed after the January closing of Medtronic’s $48 billion acquisition of Covidien. (Here’s a timeline of the deal.)

Such excise taxes came on top of capital gains taxes that Ishrak and all other existing Medtronic shareholders owed after the deal had them swapping the old Medtronic stock for stock in the new Medtronic plc, said Medtronic spokesman Fernando Vivanco.

“They also have to pay their capital gains tax like every other shareholder does,” Vivanco said of the senior leadership.

The acquisition allowed Medtronic to move its official headquarters from Minnesota to Ireland, saving money on U.S. taxes over the long-term. Many companies involved in such inversion deals have justified tax reimbursements to top executives because the excise taxes would otherwise penalize the executives for pursuing a strategy that financially benefitted the company.

Medtronic says in its proxy statement: “The payments are required to neutralize the effect of the excise tax so that [named executive officers] were neither harmed by, nor benefited from, the transaction.”

That didn’t stop long-time shareholders, including some among the companies’ earliest employees, from giving Ishrak an earful during the company’s annual meeting in August 2014. Ishrak responded that he understood the shareholders’ pain over the capital gains taxes they needed to pay. A shareholder lawsuit was filed in federal court over the compensation plan, but a U.S. District Judge in Minnesota declined to issue an injunction in December, according to the Star Tribune of Minneapolis.

Ishrak’s $39.5 million in total compensation handily exceeded what most other top medtech CEOs received in their company’s most recent fiscal years. That included $25.0 million for Johnson & Johnson CEO Alex Gorsky, $9.1 million for Stryker CEO Kevin Lobo, $10.5 million for Boston Scientific CEO Michael Mahoney, and $10.2 million for St. Jude Medical CEO Daniel Starks.

Total compensation for Ishrak was $9 million for the 2013 fiscal year and $12 million for the 2014 fiscal year.

Ishrak’s salary rose slightly to $1.5 million in 2015. The salary was more in line with Ishrak’s peers such as Gorsky ($1.5 million), Lobo ($1.1 million), Mahoney ($921,302), and Starks ($1.1 million).

For fiscal year 2015, Ishrak also received nearly $3.5 million in stock awards, $3.1 million in option awards, $5.6 million in non-equity incentive plan compensation, and $192,470 in changes to the value of his pension.

Ishrak is often cited as a top CEO in the medical device industry. Qmed readers picked him as best medtech CEO in a survey last month.

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Boston Scientific AngioJet – No Options Besides Manufacturer Service

I received an email from a BMET asking for assistance finding a service manual for a Boston Scientific (formerly Bayer / Medrad) AngioJet Ultra Perhipheral Thromectomy System.  (See the unit HERE.)  I decided to call the company directly to see what they had to say.

According to Tech Support at Boston Scientific, They do not have a service manual for the AngioJet. Upon further discussion, they did admit that they have manuals, but that they are proprietary and are restricted to use by their internal employees.   They maintain that the hospital does have options for service. These options consist of either time and materials or a service contract.

The individual I spoke with tried to tell me that this is very common, and that most medical equipment manufacturers do not provide manuals. Even GE does not provide service manuals for ultrasound machines.   I corrected him.   But he did not sway at all.

I recommend that complete service manuals be made a part of the purchase conditions of every medical equipment purchase, and that the manufacturer’s warranty (both parts and labor) be extended until both service manuals and technical training are provided to hospital-designated staff.

Boston Scientific Technical Division can be reached at 1-800-949-6708.

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