Cypher's Demise Casts a Long Shadow

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imageAs I read of Johnson & Johnson’s decision to discontinue production of the first drug-eluting stent Cypher this morning in the Wall Street Journal, my thoughts turned to a recent email solicitation from an imaging equipment reseller offering a name-brand, 16-slice CT, installed, for $250,000. This is one punishing market for those of us who sell anything.

J &J pulled the plug on the first-to-market stent because it fell increasingly behind competitive products at Boston Scientific, Abbott, and Medtronic. In 2010, it claimed just 14% of a market whose growth has slowed from double-digits to 2.6% last year. Neither did J &J have anything promising in the pipeline, such as Abbott’s bio-absorbable Absorb, which dissolves after performing its function, currently approved for use in Europe.

So, two factories are closed, 1,000 people will lose their jobs, and J &J will turn its attention to more attractive, faster-growing markets, such as orthopedics.

This story should resonate with imaging providers as well as manufacturers, because they, too, are operating in a competitive market with downward pressure on pricing. A number that leaped out at me yesterday as I perused my local daily newspaper offered a real reality check: one cable television executive estimated that 40% of all households are having difficulty paying for cable television subscriptions.

Clearly, whether you are selling stents, CTs, or CT scans (or cable television subscriptions for that matter), there will be no mercy for those who fail to respond to market needs. Keeping the door open will require keen attention to every detail, but those who fail to innovate are the most vulnerable of all.

{encode=" cproval@imagingbiz.com" title="Cheryl Proval"}