Masimo Can Get Into NY Times, But Not Many Hospitals
Allergan Pays in Development Pact; Dentists, Device Makers Convene in Anaheim
HEALTHCARE
by Vita Reed
Joe Kiani and his Irvine medical device maker Masimo Corp. got some good play in the New York Times recently. But he said he still has trouble selling his products.
Early on in an article about how hospitals buy supplies, the Times relayed a story about a 2-week-old baby boy whose life was saved after his doctor used a pulse oximeter invented by Kiani.
A pulse oximeter, which attaches to a finger or toe, measures blood oxygen levels and sounds an alarm when readings fall outside normal limits.
Kiani’s oximeter, according to the Times, is designed to eliminate false alarms. In the article, Dr. Mitchell Goldstein, a West Covina physician, said his team probably would have given up saving the baby if not for the Masimo oximeter.
But later in the story Kiani said he still can’t sell his device to many hospitals, regardless of price. Kiani charged in the article that he was effectively locked out because Nellcor Puritan Bennett Inc., a large rival owned by Tyco International Ltd.’s Mallinckrodt Inc., had sole-source contracts with two large nonprofit buying groups, San Diego-based Premier Inc. and Novation, based in Irving, Texas.
The story questioned whether financial ties that Premier and Novation have to certain medical companies compromised the buying groups’ mission of finding the best medical products at the lowest prices.
According to the article, Premier and Novation act as middlemen for about half the nonprofit hospitals in the country. The two negotiate yearly contracts for around $34 billion worth of supplies, including pharmaceuticals, pacemakers, bandages and beds.
Such contracts, ac-cording to the Times, mean that hospitals are given financial incentives to buy Nellcor oximeters. Kiani told the paper that he didn’t know that manufacturers were expected to supply money that finances large hospital buying groups.
In the article, Tyco said in a statement that Nellcor won contracts because its oximeter was a superior product but declined to be interviewed. Premier and Novation also said that their contracting decisions were not affected by supplier payments.
Meanwhile, Masimo mentioned the piece on its Web site: “The practices reported by the Times, which seem hard to believe at first, are consistent with what we have observed while trying to get Masimo SET pulse oximetry into Premier and Novation hospitals.”
Kiani, an Iran native and electrical engineer by trade, helped found Masimo in 1989 in a Mission Viejo garage. He financed the company through $175,000 worth of loans and a second mortgage.
Allergan Pays Partner
Allergan Inc., the Irvine-based drug maker, said that it made a milestone payment to Inspire Pharmaceuticals Inc. of Durham, N.C. Allergan paid Inspire for completing a phase III clinical study of INS365 Ophthalmic, a potential dry-eye treatment.
But Inspire isn’t disclosing financial details or study results. The company did point out the payment wasn’t dependent on the study’s outcome. In January, Inspire said preliminary results of the first of two planned phase III studies didn’t meet primary efficacy objectives. Patients reported that placebo eye drops improved dry eye as often as did the drug.
Allergan and Inspire agreed last June to a development and commercialization pact for Allergan’s Restasis and Inspire’s INS365 Ophthalmic.
Dentists Meeting in Anaheim
More than 31,000 dentists and dental care products exhibitors gathered in Anaheim last week.
The occasion: the California Dental Association’s 2002 spring scientific session at the Anaheim Convention Center.
The session featured trade exhibitions, as well as lectures and workshops on oral health topics. Those topics included advances in restorative dentistry and periodontics; improvements in anesthesia, teeth whitening systems and “fresh breath alternatives.” Among those expected to be on hand: Orange-based Sybron Dental Specialties Inc.
Bits and Pieces:
UCI Medical Center, Orange, added “University Children’s Hospital” to its name, as did all University of California teaching hospitals. The designation came from a bill sponsored by state Sen. Joseph Dunn, D-Garden Grove OptimumCare Corp., Laguna Niguel, said it launched a program that would include acquiring new psychiatric-unit management contracts. According to OptimumCare officials, the campaign already has started contacting more than 2,500 hospitals with psychiatric units in the Western U.S. that could be candidates for its services Physicians Golf Association Worldwide Inc., Irvine, said that it’s launching a series of continuing medical education conferences for physicians and dentists who play the game. The first two conferences’ academic co-sponsors include the University of South Florida and the University of California, San Diego STI Medical Inc., Costa Mesa, said it adopted a new graphic image and corporate identity. STI makes emergency medical stabilization products.
