The Election in China

One week after the election in the US, China also went through an official transition of power at party’s gathering on Nov 15. There are amazing contrasts between these two power transitions.

I reflected my own experience in casting my first vote in the US presidential election. It is an empowering experience for participating. I voted for my belief of how our society should look and where the country should go. The president elected represents what we wanted collectively. Looking back in the history of civilization, the modern democracy in the US is a miracle and represents the pinnacle of what we believe in for a good society --- respect of individual right and representative of collective interests.

The election of Xi (pronounces SHE) Jinping is also a miracle of a power transferring process. Power can be transferred peacefully in China within families or dynasties in the past 2000 years. Every power transfers between dynasties, however, are marred by violence. The communist party in China has now transferred power four times (Man Zedong - Deng Xiaoping - Jiang Zhemin - Hu Jingtao - Xi Jinping) without major hiccups. This is not a miracle of chance or a simple success of a totalitarian state. The communist party today in China is no longer an entity hold just by its ideology. It has fully integrated meritocracy that is deep in Chinese tradition. Over the past 2000 years in China, the selection (not election) of government officials are based on nation-wide exams!!! Just yesterday, there were 1.15 million people took part in the latest national examine to be qualified for a government job.  The Chinese government is full of technocrats. Xi has served as county officials, mayors, governors, and key central government positions in the past 30 years. The new premier, Li Keqiang, has a PhD in economics. There is a deeply rooted tradition for the elite to lead the society in China.

In the US election, people vote on trust rather than qualification of the candidates. On the last day of the election, Obama’s message was that Romney was for the rich, and can not be trusted for the middle class. The lack of focus on qualification produced presidents like George W. Bush. Obama’s lack of accomplishment in the first term, obstructions from the Republican aside, also reflected his lack of experience in moving forward when he could not get people behind his vision. I was intrigued by Romney’s leadership qualities in what he has done in his career. At the end, I voted on my belief, rather than the candidates themselves.   

Obama became a US president through his journey of finding justice and hope for common people. He ran a campaign that was rooted in getting everyone support his vision to vote. Xi came to power after being vetted for his qualification to govern and serve party’s interests. He has the trust from the party, and to the less extent, from the Chinese people, of his ability to maintain a stable society. I think Obama will be fine for the next 4 years. It is hard to predict for Xi, I wish him well.

Medical Device Industry is Changing

The medical device industry in the twin cities area is changing. This used to be the hot bed for medical innovations. In the last decade, two of the most important medical technologies for cardiac and vascular diseases, cardiac resynchronization therapy and drug-eluting stent, made Medtronic, Boston Scientific and St. Jude the champion of medtech industry, a combined revenue today of $29B. The last several years, things have been different; the 2011 year-on-year growth was 3%, compared with the 15-20% 10 years ago.

These changes are surprising given the trend of an aging population and the pandemic of obesity still underlying clinical needs for treating cardiovascular diseases. Some of the obvious causes of the downward trend were not surprising. All three companies were plagued with quality issues that were highly publicized since 2004. These issues are significant for the cost of doing business but not for revenue. Most products in question are all life-saving therapies, the alternative of not receiving therapy is unacceptable for most patients. The second cause of the downward trend were reflected in reports of device overuse, including ICD and drug-eluting stent. This is a sign that the adoption of these therapies is high, and early high growth in a under-penetrated market is now replaced with a steady demand from the incidence of cardiovascular events. The most important reason for lack of high growth is the lack of new medical innovation.

In the last 7 years, there is not a single large first-in-kind product released from the three companies. Instead, there were many new products with incremental improvement, smaller, easier to use and more features. These reflect the internal research and development focus from the early 2000s. It was difficult to move away from a winning strategy that has been working for years in a high growth market. There are changes in the last several years. The most obvious one seems to be reducing internal R&D. In 2012 alone, there were approximately 800 engineers laid off in the twin cities among the three companies. This trend is similar to what happened to the pharma industry – out sourcing R&D. Instead of focusing on internal development, large corporations drive growth by acquiring technologies that have already shown reduced clinical and regulatory risk.  All three companies have made significant purchases in the last 2-3 years. Lutonix, a local startup that has developed a drug-eluting balloon, was one of the notable acquires last year.

I am excited for a future of the medical device industry in the twin cities that is similar to the IT industry of Silicone Valley. We have industry titans that have a solid foundation for market development and penetration. The industry as a whole can work together with FDA and payers to maintain a sustainable structure for regulation and reimbursement. We are building a vibrant start-up community here that can be stronger. There are several local startups are in the midst of Phase III trials. The rich talent pool will help to create new ventures. In addition to large acquires, I hope the three companies also make many small investments for early high risk projects. This will help to keep the talents here and in the medtech industry. I believe the next high growth in the medical device industry will come from another medical innovation that changes people’s life, and I hope it will come from one of the twin cities startup medical device companies. 

Working in the Medical Device Industry

When working in Guidant and Boston Scientific, a special event for many was the Quality Day. This was an annual event that we listened to the stories from patients with a pacemaker, an ICD or a CRT.

The stories from pacemaker or CRT patients were usually pretty moving. Many patients with a pacemaker today, were because they had a syncope event, fainted suddenly; these are especially debilitating for seniors. It was warming to hear when they claimed the little engine in their hearts will always keep them going. The CRT patients could not stop talking about golfing again. CRT often had the biggest impact on quality of life in patients with heart failure. It is one thing being sick, felling life is getting better as getting older is a powerful message to share with anyone.

The stories from ICD patients are quite different. Not many can survive a sudden cardiac death, get a device, and tell you a story. The best one I heard was from my table tennis club. Teri is a 65 year old young lady, plays an aggressive style ping pong. She takes the first opportunity to attack, and will keep hit the ball so hard, after twenty minutes, she would go “Quan, you need to take a break”. During these breaks, I found out Teri had an ICD, and she competed in the World Senior Championship. Teri also had a sister in Germany and they used to compete together. They lived for a few months together here to prepare for an upcoming Championship. The sister then went home, and they would meet at the game in Europe. The sister never arrived. She passed away suddenly at home. Teri later found out the family carried a congenital condition (long-QT syndrome) that is a high risk for sudden cardiac death. She was happy to learn what I do, and I will remember what she said “Quan, this device could have saved my sister’s life”

Left Boston Scientific, I joined a small medical device company in developing an implantable device for treating obstructive sleep apnea. This is a condition affects 15 million Americans. The upper airway obstruction can occur hundreds of times each night, interrupting sleep and causing responses that lead to high blood pressure, heart problems and cancers. My favorite part of the job is to attend sleep studies that we find out in real time if the therapy is working. I also enjoyed the little chat before saying good night and asking patients how the device worked. Many patients have apneas for years and tried many different treatments. Some of them would also ask what I do. I told them how I worked with the surgeons in the operating room during implants, lived half a year in Belgium to work with a hospital that was doing our first clinical trial, and now travel around the country to help find a good setting for their device. One of them said, “Quan, you have the best job.”