Robotic systems claim to offer physicians more fine motor control and an ergonomic working environment during procedures. They are used in a variety of surgeries, such as prostate cancer treatments. There are also robots for percutaneous peripheral vascular and cardiac electrophysiology (EP) procedures. X-ray fluoroscopy is used to visualize the placement of catheters inside the patient, so remote steering systems have the added benefit of eliminating radiation exposure to physicians. However, there’s a big difference in the success of companies offering robots in the surgical space compared to the percutaneous vascular space. I sat down with my colleague Xi Chen who closely follows the surgical robotics space to compare these two robot markets.
Erik: Stereotaxis is the leader in electrophysiology remote navigation systems but consistently fails to earn a profit. The sales of its systems, which cost about $1 million, are in the single digits and have fallen over the past few years. Some hospitals are even decommissioning their Stereotaxis system, reflecting how electrophysiologists don’t see the value in remote steering. Another competitor, Hansen Medical, likely sold no new systems in the US last year, failed to produce an annual earnings report for 2015, and was acquired by a small, mysterious robotic surgery start up in April. One small competitor, Catheter Precision, changed its name from Catheter Robotics as it diversified into 3D mapping systems. These systems are just too big, expensive, and require too much training for electrophysiologists to adopt them.
Xi: Big, expensive, and require too much training. Those words seem to describe Intuitive Surgical’s Da Vinci robots when they first came into the market. In fact, they have since become more complex and even more expensive: the latest Da Vinci Xi system costs about $2.5 million with close to $2,000 worth of consumables per procedure. However, nothing has changed on the payer side, reimbursement is the same with or without the robot.
How did Intuitive Surgical succeed while the likes of Hansen Medical struggle? At the beginning, Intuitive Surgical engaged in aggressive direct-to-consumer marketing. Patients were convinced by highway billboards and mall demos that robotic surgery is safer and more effective despite little clinical evidence for these claims. Patients demand robots and hospitals will buy them to stay competitive. This tactic isn’t pretty but it was effective and it got Intuitive Surgical through many hospital doors.
With sales comes money for more R&D. This is where Intuitive Surgical has distinguished itself as a well-run company. They never rested on their laurels and have not adopted the monopolist mindset. They listen to physician criticism and have been spending more money on R&D to make the system better year after year, despite being the only competitor in the market. They also have thousands of patents that have yet to be implemented and there is clinical evidence emerging supporting robotic surgery, which will feed back into the demand for more robotic procedures. All this works to ensure that Intuitive Surgical maintains a leadership position and hospital demand for their systems.
Erik: Is there anything that EP robot companies can learn from surgical robot companies?
Xi: Intuitive Surgical’s robotics initially addressed a niche in certain types of prostatectomies and hysterectomies where traditional surgery was too invasive. Likewise, in the orthopedics space, when you are dealing with bones instead of soft tissue, robots offer alignment precision that can’t be matched by a hand, which explains why companies like MAKO can also succeed. It would help if there was a niche in EP where increased catheter maneuverability is needed. Until such a niche is found, companies can follow Intuitive Surgical’s strategy: your first generation systems might not be the prettiest but you’ve got to sell them by hook or by crook. After, use revenue to support R&D and you will build physician loyalty with improved systems and accessories.
Erik: You raise a good point about precision, electrophysiologists have so many other things to worry about during an ablation procedure like if there is enough energy being delivered to the tissue, contact force, 3D mapping, and tissue temperature. I suppose the improved maneuverability and placement of catheters offered by EP robots hasn’t impressed too many physicians at this point. At the very least, Stereotaxis and Hansen Medical may want to look into direct-to-consumer advertising.
Want to learn more about EP remote steering systems? Be sure to check out DRG’s Electrophysiology Mapping and Ablation Devices reports for the US and Europe. Follow @ErikB_DRG and @XChenDRG on Twitter for more medtech insights.