Dean Clough

August 4, 2021

Portico Darwin: Reply Special Edition

Here, in response to my recent Teddy Roosevelt post, is the medical engineering wunderkind Raymond Michaels.  Thank you, Raymond, for this rejoinder from the inside.  Other than removing references to his company, his reply is unedited.

"I agree the dynamism of America is waning but see the flip side of the coin of you.

I know in the med-tech world that more regulations/oversight are often welcome by the big companies (Medtronic, Abbott, Johnson & Johnson, etc.).  It is the little guys who often get squeezed with more regulation/oversight.  It is harder for the small companies to carry the overhead of legal/compliance teams to deal with more oversight when operating at smaller scales.  As more regulation comes, smaller companies are forced to either scale up or get out of business. 

A small example. I am working on a new product at (my company) where we are trying to generate early clinical data.  FDA regulations and overly litigious society drive (us), a reputable American company, to do an early stage clinical trial in foreign countries.  Once forced to go abroad, (my company) paid another $6,000 to have a worthless set of tests done to certify a magnet weaker than a refrigerator magnet is safe on a plane, a regulation implemented in the 1950s when airplanes were still navigating by compass.  The regulation is still in place today, even though all airplanes are navigating by GPS/satellite.  I conservatively estimate being forced abroad will add over $100K to test product in other country and slows down brining product to market.  (My company) can foot the bill but the 10 person med-tech startup would have a harder time raising the money to overcome these hurdles.  If the product reaches market, (my company) will charge a premium on the product far above what it costs to manufacture to recoup the costs of jumping through the hurdles to get the product to market.  Are some regulations reasonable?  Without a doubt.  But a lot of them are 'Bogus' and add friction to the system of brining products to market.  These bad regulations limit competition and drive higher prices.

I don’t have the answers to this, but one thing that seems a deterrent to taking a startup job is the cost of health care.  I know the lovely Elizabeth Michaels was paying about $10K a year to insure herself, maybe the healthiest person on earth, and her 19 year old daughter, who has maybe gone to the doctor twice for treatment in her life.  It does not seem right that my insurance at (my company) costs me $1000 a year but the individual entrepreneur has much higher costs.

Enjoyed seeing you and Julie last week, keep up the dynamite writing!"

As always, I sincerely welcome comments from anyone, on any subject, and will publish them without comment - other than expressing gratitude for your participation.

About Dean Clough

Plans To Enjoy Life.