Reuters Summit: Guidant Mulls No-frills Heart Device
Guidant Corp. said it is considering developing a low-end, no-frills implantable cardioverter defibrillator, a pager-like device that regulates irregular heart beats.
ICDs are implanted in some 170,000 Americans per year. The devices, like the one in the chest of Vice President Dick Cheney, shock a dangerously rapid heart beat back to a normal rhythm.
Makers of these expensive devices, which can cost up to $25,000 a piece excluding the implant procedure, have added additional features to address different cardiac issues. Guidant is looking to the lower end of the market, where the price could be half that of existing devices.
“If we could design a device with a cost structure that was substantially less, you would see it adopted, absolutely,” Guidant Chief Executive Ronald Dollens told the Reuters Health Summit in New York.
“It is something we’re looking at,” he said.
The challenge in manufacturing a lower end model is finding the electronic components for a reasonable price, partly because the market for a stripped-down ICD is much smaller, he said.
“We require technology that the Hitachis of the world couldn’t deliver (at a low enough price),” Dollens added.
Industry analyst Alexander Arrow of Lazard Freres & Co. said that even though the profit margins on a stripped-down ICD would be lower, it makes sense for Guidant to have a broad range of prices on its product line.
“There is a segment of the population that is price sensitive, and a majority of patients will never use the majority of features on a high-end ICD,” he said. A high-end device may not just monitor heartbeat, but also treat heart failure.
Moving into the lower end of the ICD market, with a product near $12,000 may also be a defensive move for Guidant, Arrow said. Biotronik of Germany sells a low-end device, but so far has captured less than 5 percent of the worldwide market.
ICD sales have driven Guidant’s sales so far this year and brisk sales are expected to continue at a 20 percent clip.
