Gary Michelson, M.D., Revisited
Walter Eisner • Tue, June 28th, 2011
Seventeen years ago, a spine surgeon called an engineer at Sofamor Danek (now Medtronic Spine and Biologics) and said he had just used their new Orion Cervical Plate. He said it was a nice device, but there were some problems with it. He asked if he could make some suggestions.
The engineer said, “No thanks.” He told the surgeon that if he thought he could do a better job, he should do it himself.
The Gift of Invention
Gary Michelson, M.D. did exactly that. Now, $1.35 billion dollars and 955 patents later, Michelson is on the Forbes magazine annual list of the 400 richest Americans. He was listed at No. 290 in 2010, with a net worth estimated at $1.4 billion.
In a 2005 interview with Orthopedics This Week, Michelson said he did not want to be a business man. “I wanted to practice medicine. I did not want to get rich from medical devices. That is not why I patented them. I wanted to insulate myself from the business side of things.”
Having had the gift of being able to take things apart and put them back together as a kid, inventing was not hard for Michelson. He said the only difficult part in inventing is identifying the problem. Solving it is much easier.
For instance, during one surgery he thought to himself, “I cannot leave this piece of bone behind, it’s too big…I never invented something in the abstract and then wondered what it will be useful for,” said Michelson.
That led him to develop a small set of instruments which were the right size and right shape for treating different spurs and osteophites. He eventually made a deal with Sofamor Danek to develop his patented devices.
However, in 2001 the company filed a lawsuit against him for allegedly attempting to license his inventions to competing spinal implant companies.
He countersued Medtronic and accused the firm of failing to aggressively develop his inventions and pay him royalties.
A jury awarded Michelson $510 million in punitive and compensatory damages. Eventually, in order to settle all claims, he agreed to accept $1.35 billion and sell the company a range of inventions and technologies
Michelson’s experience and settlement will be seen by some as a watershed moment in the relationship between spine surgeons and device companies. A new health care economic environment is pushing payers to demand that products be safer, more effective and cost effective than previous products.
“Companies that are the most successful are driven not by their research and development department, not by their marketing people,” noted Michelson, “they are driven by their customers’ needs. That’s what drives the process.”
When Michelson started his career in Philadelphia, a physician told him that a spine surgeon was like a carpenter building a house. Every time he has a bent nail he throws it in a bucket. In the end all he had was a bag a bent nails. “If you want be a spine surgeon, the results are so bad, every few years you will have to pick up and move to a new state. The people who get better you never see again, the people who did not get better are your bent nails,” warned the physician.
“Back then,” said Michelson, “those were the largest operations orthopedic surgeons performed. Yet they had the least gratifying results. When you operated on somebody for a back condition, if it did not go well, then they never went back to work. These were devastating disabilities.”
He continued, “We saw trauma—people who broke their neck or backs. But much more common were degenerative conditions of the spine. Up until the 1800s, people had a life expectancy of 30 years. We have managed to triple that and a lot of people’s backs began to wear out in their 40s, yet we live in a society where people are reaching the peak of their productivity as workers when they are in their 40s.”
Value of Inventions
Michelson believes his inventions have allowed a spine surgeon of ordinary skill to have the same results as the highly skilled surgeon.
He takes greatest pride in the technology that directly impacts patients. “The first thing that comes to mind is the interbody spinal fusion technology. I think what made this successful is that the methods and instruments made the ‘sweet spot’ so big that you did not have to be a flawless carpenter to make the procedure work. A spinal surgeon with moderate skill can achieve a great result with this procedure over and over again.”
The instruments have a number of redundant safety features which Michelson says anticipate mistakes and keep them from happening and make it possible for the ordinary spinal surgeon to do the procedure.
Michelson’s inventions shifted the relative economic value from the carpenter to the tools and instruments and device companies saw their revenues rise while surgeons saw stagnating or declining reimbursements.
They Shoot Horses Don’t They
Outcomes are what have driven the retired surgeon. Dealing with humans, for example, is very much different than dealing with horses said Michelson.
“When you do an operation on a horse to stabilize its spine and it fails one out of seven times, you have a paralyzed horse and you shoot it. You saved six horses and shot one. That is a good result because you were going to shot all seven horses.” But it’s different with humans. “One out a hundred makes it a useless procedure. You cannot have a procedure where 99 of them go great and the 100th one you paralyze.”
The Multi-Lock System
The most successful product from a patient standpoint, according to Michelson, has been the cervical plating system. “The patent that covers this product is called multi-lock. The multi-lock system revolutionized cervical spine surgery. The plate allows doctors to put in a plurality of bone screws to fix the plate to the spine and then lock all those screws at once rather than one at a time. The lock is preinstalled in the plate so the lock goes in before the screws go in. This has really revolutionized cervical plating,” said Michelson.
In thinking about motion preservation for the spine, Michelson said the laws of nature, whether its gravity or the way the joints work, never change. “If someone were to tell you the back is different, it’s not like the knee; it’s not like the hip-they’re just dead wrong.”
While each body part has its own characteristics, Michelson says they all have to obey the same basic principles. “We have principles of arthroplasty that have evolved and developed through more failures then ever should have occurred.”
Lessons From Hips and Knees
Michelson said that 25 years ago when the industry was having total hips stem wars, one company would say that the cross section of the stem should look like a diamond and another would say it should like another geometric design.
The only stems which really worked, according to Michelson, were the ones the surgeon made when he cleaned out the femoral canal, poured in some latex, and pulled it out. It had a shape which wasn’t geometric, it was biologic. It corresponded to the true shape of the femoral canal. “When you make a stem by using that latex mold you get a femur which does the best over time.”
They did the same thing with total knees.
“When I was a resident, total hips were surviving maybe 15 years and total knees were surviving only about 5 years. The instruments for total knees were insignificant.”
Michelson noted that when instruments were invented to protect the vital structures surrounding the knee, the survival of total knees became comparable to total hips. The key was the development of methods and instruments such that it was safe, easy and reproducible for the surgeon.
In the total knee war, Michelson said it was the instruments which ultimately sold the product. The company whose instruments let the ordinary surgeon get a great result easily got the sale. It was better for the doctor and better for the patient.
“Ultimately, it will be the surgical methods and the instruments which drive the sales of the artificial disc implants.”
Michelson stopped practicing in the beginning of the year 2001 because being an inventor was a full time job.
Today, Michelson devotes his time to a variety of causes ranging from animal welfare, medical research, online textbooks and buying up parts of the tropical rain forest in Central America.
He also formed the Medical Research Foundation trust. He’s using the first $200 million from the sale of the new technology to Medtronic to fund the foundation. He’d like to hear proposals from people who are on the cutting edge. “Not the people who already are the leaders who need no help getting funded. We would like to get into something on the ground floor, for example genetic engineering, or fetal stem cell research; something that has the potential to make a tremendous breakthrough in medicine.”