For medical device professionals, there are the “knowers” and the “doers.” One group is knowledgeable about quality best practices and product realization needs, but may not know how, or have the desire, to act upon it. The other group puts that knowledge into action by doing the best practices that are needed to realize the product needs and [seize all] opportunities.
In this episode of the Global Medical Device Podcast, Jon Speer talks to John Kapitan, CEO at Kapstone Medical, about the difference between knowing and doing as medical device professionals and how to do what’s needed for product realization.
Some highlights of this episode include:
- People view quality differently and need to overcome pessimistic and negative perceptions. Quality is a mindset and helps companies solve business problems.
- Quality is knowing the right thing to do versus doing it. Some people are ignorant because quality is not their role and do not necessarily know best practices.
- Other people are outwardly antagonistic who know the right thing to do, but choose not to do it for a variety of reasons.
- Apathetic people have an idea of what to do or have been told what to do and want to do the right thing by the patients, regulatory bodies, and investors.
- Quality is common sense that focuses on best practices, documentation, and performance. Rather than caring about traditional technical quality related areas, a quality system is one of the last things some companies/investors consider.
- Pre-revenue and pre-commercialization companies don’t need to build a quality system that has all the bells and whistles. Start with the core and add-on as needs arise.
- There is a right and wrong way to implement quality in any organization. Take an efficient, effective, and pragmatic approach to understand compliance and the must-haves, not the nice-to-haves.
- Make sure to have someone on your team to discuss and champion quality, and implement a quality system that runs the company, not the company running it.
Memorable Quotes from John Kapitan:
“I want to do the right thing. I know I can learn because I don’t know everything and there’s probably better ways to do this. More efficient ways, more effective ways to do this.”
“If quality is not your role, you’re not necessarily going to be on top of what good practice is, what best practice is for quality, and what quality requirements are from FDA or overseas. You may be ignorant of just what to do and how to do it. ”
“Quality is common sense. It’s not procedures, it’s common sense. It’s how would you do this if you were going to have this device put in your own body or your family members?”
“There is a right way and a wrong way to implement quality in any organization.”
“It’s always about prioritizing what we spend time thinking about, what we talk about, and what we invest in.”
Announcer: Welcome to the Global Medical Device podcast, where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge direct from some of the world's leading medical device experts and companies.
Jon Speer: I just had an opportunity to talk to John Kapitan. He's the CEO at Kapstone Medical, kapstonemedical.com, check it out. They do a lot of work in design, development, manufacturing quality and regulatory submissions as well. As John put it, they're a product realization company and they try to cover all of those different aspects. The big topic that John and I spoke about was the difference between knowing and doing as a medical device professional, and talked about a few things. A lot of quality related items and really hope you enjoy this episode of the Global Medical Device podcast. Hello, and welcome to the Global Medical Device podcast. This is your host and founder at Greenlight Guru, Jon Speer. Joining me today, is John Kapitan. John is the CEO at Kapstone Medical and we thought we would explore this topic today of the difference between knowing and doing. We'll unpack that a whole bunch here in a few moments. But John, I guess, give folks a little bit of a background about who you are and your journey so far in this medical device world.
John Kapitan: Absolutely. Thanks, Jon. It's great to be here. I really appreciate the opportunity. My background is really all over the board. I started as a product development engineer with a mechanical engineering background about gosh, more years ago than I care to confess. At least 25, put it that way. So I've been in the med device space for about 25 years now, a little over that. I had roles in product development, in regulatory, in quality, overlapping in manufacturing and have worked with companies big to small. Literally one or two people, all the way up to some of the biggest companies in our industry. About 13 years ago, I started Kapstone Medical as a consulting firm for the med device industry that really was meant to be a single source provider. It was in some ways building on those experiences I had in all of those different areas and trying to put that all together for companies to allow them to produce products, to get them on the market and do it in a way that really met or exceeded quality requirements and of course, regulatory compliance.
Jon Speer: Absolutely, and we'll talk a little bit more about Kapstone throughout the conversation. But we'll get into some more depth and detail on the types of products and services that your company provides in a little bit. I'm honored that you and the Kapstone Medical team are partners of Greenlight Guru. You've been with us in that strategic relationship now for many, many years and it's been exciting to see some of the companies that you're incubating, make it to that next major milestone and that sort of thing. But let's dive into the difference between knowing and doing. I guess I'll set the stage a little bit. I too have a similar career background. You've got me by a couple of years, I'm only about 23 years in, but product development, quality, regulatory, those are areas where I've been very fortunate and blessed to have a lot of opportunities to explore. I guess I'll start it with this story. There was a time early in my career as a product development engineer, let's see, this probably would have been, let's call it late'90s, maybe early 2000s. At that point, the FDA regulations around design control were still pretty new. I think 13485 had already been released too, but this whole idea of design controls was a head- scratcher for a lot of people. For me, it just made sense and I can look back on it now, I'm like," Oh, well it made sense because I'm more of a system engineer. I think about process and the order of operation, that sort of thing." But I received accolades and promotions within the company because of my organization and my grasp of the topic of design controls. For me, I thought," Oh, well, everyone understands this," and then I realized they don't. Not everyone knows this. I guess I didn't really phrase it in the form of a question, but let's dive in there and see where we go.
John Kapitan: Absolutely. My experience is all over the board with people's view of quality. When I say quality, when I speak about quality, a lot of people just dive right to it's a whole set of procedures and forms I got to fill out and this and that. It's almost this pessimistic, negative view right off the bat. I think when I look at quality, much like yourself when you described your early career, it's really more a mindset. I want to do the right thing. I know I can learn because I don't know everything and there's probably better ways to do this, more efficient ways, more effective ways to do this. If we could just codify this in a way that our company is doing it the same way every time, this is just going to help us with, I like to say," Our business problem to solve." It's not just about quality. Quality, it's a broad term, right? It touches lots of areas of a business, but it's something that's often overlooked because I think people just have this idea in their head that it's defensive, it's not offensive. It's a cost center, it's going to slow me down. I'm not going to get to market as fast, or I'm going to have to raise more money because now we have this expensive system or whatever it is. There's just so many, I think, perceptions about quality out there. Especially early on in my career, that just overcoming those negative perceptions and really sitting down and understanding what quality was and how it could help, I think it was a bit of a challenge. And a conversation I had back then, quite frankly, we're still having today with lots and lots of people. I was describing this before, as we started talking and it's almost like people fall into different buckets with this whole issue of quality and knowing what the right thing to do versus doing it would be. On the one side, I think people are ignorant and I don't use that in a necessarily negative way. It's just that let's face it, we're all doing a lot of things and if quality is not your role, you're not necessarily going to be on top of what good practice is, what best practice is for quality or what the quality requirements are from FDA, or overseas where you're dealing with other regulatory bodies. So you may be ignorant of just what to do and how to do it and that's okay. I guess you can argue that you probably shouldn't be a medical device company if you're really that ignorant about it, but I have seen my fair share. I think at the other end of the spectrum, you've got people that are almost outwardly antagonistic, to be honest with you, that I know what to do, but I'm going to choose not to do it because of a variety of reasons. Don't have time, don't have money, don't have the right people, so we're just going to close our eyes and ignore that for a while and then it usually catches up. Then I think you've got the biggest bucket of people in the middle, which you might call the apathetic ones. Which is okay, I kind of know what to do, or I've been told what to do and someone's been speaking in my ear for many years. I know I want to do the right thing by the patient and of course, by any regulatory body and by my investors, and my company and myself, but for a variety of reasons, I can't prioritize it right now. We'll get to it, we're just going to push it down the road a little bit. We're going to roll the ball down the road until we really need to focus on it. That gamut those three, if we can put people into broad categories, it's those three categories that I've run into the most as far as their view of quality as it relates to the organization.
Jon Speer: Yeah, I find myself nodding my head as you described those. Let's talk a little bit about the largest bucket, the apathetic one. I think this is, I don't want to say it's isolated to, but it definitely seems to be more prevalent maybe in smaller and startup companies. It's almost like they know they don't know in some respects or they know enough to be dangerous. I mean, sometimes the quality work, it's the blocking and tackling, it's not glamorous sometimes. It's just sometimes it's just core, basic stuff. I guess I'll bring it back to some of my experience as a product development engineer. It's fascinating and exciting to build prototypes. It's fascinating to design components and parts and pieces and figure out how these things are going to go together and then do the destructive tests. I mean, that's fun, right? But writing good requirements or even doing a risk assessment is like," Oh my gosh, this is not fun." I think people have that sort of approach and they know that they need to do it, but it's either not fun, or it's not glamorous, or it's perceived, to your point, that it's a burden, it's an obstacle, it's time consuming and it doesn't add value. It's like," Ah, I'll do it later." I've seen a lot of startups make this mistake. They push those things like design control and design history file and good documentation and risk management activities, they push it off. Saying," We'll get to it later. We'll get to it later." They get to a regulatory submission, like a 510K or whatever the case may be. They get the clearance, they go to market, they never go back and do it. It's like," Oh, my gosh!"
John Kapitan: Right, right, right. I couldn't agree with you more, Jon. That's why I say it's more of a mindset. I mean, to me the beginning of quality is common sense, it's not procedures. It's common sense. It's how would you do this if you were going to have this device put in your own body or your family member's? Then from there, it moves into best practices and then documentation, or like I say, codification of those practices. I see way too many small companies doing that. Again, you're right. I think as a development engineer myself, you hit the nail on the head. It's exciting to build something, it's exciting to destroy something and see how it performs. But the other mistake that, or reasons I should say, for people being apathetic about it is really, I think, much more pragmatic on a business standpoint. Which is, look, we're on a runway here and if we don't raise a certain amount of money in a certain amount of time to get this product out the door and get it patented, there is no business. So why would I care about quality? Investors often, I won't say always, but often want to talk about the things that move the needle and valuation. It's how they're going to achieve an exit strategy. Or if you're not going to exit how you're going to build a big business quickly. That is, when can I get my product? Is it going to pass testing? Is it going to get a regulatory clearance and can I get a patent on it? And of course, there's sales, marketing and all of that. But as far as the traditional technical quality related areas, a quality system is one of the last things they think about for the reasons I mentioned before. Either we don't have the time we don't have the money or we don't have the right people. If I'm going to go out and raise$ 10 million in a Series A for my company that I'm starting up, I'm not going to spend a whole lot of time. I'll spend some, but I won't spend a whole lot of time talking about quality. Then to your point, Jon, as you go through the process and you get a product to market, you're certainly not going to spend time going back in time and correcting what you should have done right in the first place. You're going to keep going and getting to that next valuation jump. It's not sexy, it's not fun to necessarily go back and do a remediation of a DHF or adding to your risk file. But it sure does help with, as we all know, product quality. And it really helps in my opinion, having been a part of a lot of M& A deals, it helps in the due diligence. Because even if you don't think as a business owner that it's terribly important at the beginning of the day, I can tell you that whoever is acquiring you or that technology, is going to look hard at the quality documentation, and the system, and the way the product was designed to make sure that it doesn't have inherent risks that have just not bubbled to the surface yet.
Jon Speer: Yeah. You do a lot of work and Kapstone does a lot of work with pretty early stage companies, right?
John Kapitan: Yes, mm-hmm(affirmative).
Jon Speer: Do you find that the investor, let me makes sure I'm phrasing this properly, friends and family type of investor is probably a different level of sophistication versus an Angel versus a VC?
John Kapitan: Absolutely.
Jon Speer: Is there a particular type of investor that you see today that's putting more emphasis on quality practices versus others? Because I know once upon a time investors in this industry were largely uneducated about the regulations. I mean, they knew FDA was out there, but they just knew about things like 510K's and PMAs and IDEs and that sort of thing. They didn't really about crosstalk and the details. Do you feel like the landscape is different today from an investor perspective?
John Kapitan: Yeah, that's a good question. I think the landscape is a bit different and I think the strategics are really knowledgeable about it. They have quality staff that will be part of the-
Jon Speer: Strategics being the big company.
John Kapitan: The acquirers. Well, I mean, it doesn't have to be the biggest companies. I mean, I would say that the tier one, two and three, if you will, medical device companies that have been around long enough to make the mistakes and then reap what's coming from those mistakes, are the ones that usually are much more, I would say careful in their due diligence about how a product was designed and documented. I think it's still a case where early stage investors, especially seed stage investors, because let's face it, a lot of friends and family don't know what the right questions are, or they ask very superficial questions about quality, which are easy to brush off or sidestep. I think to a large extent, a lot of early stage investors are not as knowledgeable and don't ask as many questions about quality. I think certainly VC are going to ask the right questions in most cases. I think family offices, which we're seeing more now, are knowing at least enough to ask a question about it. How deep you go, maybe is a different story. Again, I think there's a lot that early stage companies not nefariously, but can cover up or hide their mistakes by giving a few keywords like," Hey, we're FDA registered and we're ISO certified and we have a 510K." That covers a lot of sins. So I think it depends on how deep you take that conversation. But I think the strategic acquirers, the med device companies that are looking to acquire technologies have been through this, they know what to ask for, and they're going to dig deep.
Jon Speer: Yeah. I've mentioned this story a few times on the Global Medical Device podcast, but it's still a good one and appropriate for this conversation. There's a guy I know, his name is Ronnie Breck. I know it's a small world, you may or may not know him. But either way, Ronnie used to work in an M& A at one of the strategics, tier one type strategic. He would often tell a story about going in to evaluate some startups for potential acquisition and he had an eye toward quality because when you're a tier one company, you are most definitely on the radar screen of regulatory bodies. You will be audited and inspected with assured frequency. But they would look at those targets with quality in mind and they would ask questions about design history files and risk management processes and procedures. He said sometimes they'd get the deer in the headlights look from the startup and they didn't do anything. He's like," Well, that made his job a lot easier," because now he can come in and reduce the valuation by a significant amount. I think that's a thing that a lot of those folks in that the apathy bucket from knowing what to do maybe say," Oh, that's not going to hurt me." Until it does, until you get to that point where you're ready crosstalk acquisition, yeah.
John Kapitan: Yeah, the two things I think strategics are looking for, obviously other than product fit, is how quickly can this get to market and I start to see a return on my investment? And how much risk is inherent in taking it from where it is today to where I need it to be? I can tell you I've seen multiple examples of the wrong way to do it. Where the company, even though we just hammer it in that look, this is not just a cost to you, this is not a burden. Believe me, this will show in your valuation or not. And the valuation's been knocked down because it's been 12 months of due diligence because the quality documentation wasn't there where it was supposed to be. So now instead of X they're getting Y, because there's a whole lot more risk. It's not just the cost of, hey, we've got to create these quality documents. If your quality system's not buttoned up, these strategics are looking at you and now they're a little unsure about everything you're telling them. Because they don't think you were really spot on in terms of the way you developed this device. I do think it can reflect negatively in valuation.
Jon Speer: Yeah. I mean, I think a good point for folks to hear on this is maybe everything you did is on up and up. Maybe it is. Maybe your documentation isn't as thorough and robust as it could be. Maybe you didn't codify the discovery, the learnings, the journey, if you will. And if an acquiring a company is looking at you and doing their due diligence and you don't have that, to John's point, that's now risk that they will assume. If you don't have that, now it calls into question all the things that you did. Maybe some of the things that you did are now invalid because it wasn't codified. I think it's a really important point for people to keep them up. John, I want to take a quick break. I want to remind everyone I'm talking with John Kapitan with Kapstone Medical. John, take a few moments and talk a little bit about the types of engagements and companies and products and services that you provide to medical device companies.
John Kapitan: Absolutely. Yeah, I appreciate the opportunity. I think at the core you might say we're a product realization company. We do everything from engineering concept generation to full blown engineering, all the way through product development. We do regulatory work, regulatory submissions worldwide, creation of quality systems and as I mentioned before, remediation sometimes. We also have a subsidiary that does manufacturing, so we're contract manufacturing. We found that everything of course, we design needs to be made and there was a whole lot of reasons to try to bring everything in- house to make a single source. When I was out in the industry and I was hiring people like me, I always found it very challenging to hire somebody in quality and somebody else in regulatory and somebody else in engineering. Then what would inevitably happen is everybody would point fingers at each other because it's not my fault, it's theirs. So what I tried to do in creating Kapstone Medical, was to be a single source, A to Z product realization provider for med device companies. Whether it's a one or two person startup, all the way up to the biggest companies in the industry. Then getting involved in the manufacturing of those devices that we designed really takes it from beginning to end or cradle to grave, as you might say.
Jon Speer: I love that, product realization. Folks, you can learn a lot more about Kapstone Medical by visiting their website. It's Kapstone Medical, all one word, Kapstone a K dot com. Check it out. I know there's a way to contact John and his team if you have further questions. Kapstonemedical. com. I also want to take a moment to remind folks about some exciting things that we have going on at Greenlight Guru. Greenlight Guru of course, is the only medical device success platform designed specifically and exclusively for the medical device industry by actual medical device professionals that's available today. If you'd like to learn more about that platform, go to www. greenlight. group. We recently launched this exciting program called the Greenlight Guru Academy. We have a lot of courses. Some of them are free, some of them are paid. But there are opportunities for you to learn and get some additional training on some key topics, such as design controls and risk management, regulatory submissions, and audits and so on and so forth. Check it out, Greenlight Academy. It's a go at your own pace type of training opportunity. Something that can augment and help you move yourself from not knowing to knowing, which is part of what John and I are talking a little bit about today. All right. Getting back to the conversation and one of the things you said a moment ago triggered a thought. We'll go back to your buckets of where people fall, as far as the knowing category. Another thing that I have seen quite often in my career, is someone realizes they don't know, that they're ignorant about something. They know that they don't know, but they know that there's something out there. One of the trends that I see is like," Oh, well, I'm going to go find a person, a consultant. Going to find a consultant. I'm going to hire the person and I'm a startup. But I'm going to hire a person that's retiring from one of the top tier med device companies." No disrespect but, I'm going to hire a Medtronic guy or a Boston Scientific guy, or a J& J guy or gal. I'm going to hire them to come in and help set up my quality system. I heard you chuckle, so I'm curious. But what additional reaction do you have to that?
John Kapitan: No, I was laughing because I was going to bring that up if you didn't. Because I think there is a right way and a wrong way to implement quality in any organization. Since the theme today seems to be around the startups and young companies, I have seen too many times where you get one of those seasoned individuals from one of the big companies and again, I won't name names because I think they're excellent at what they do. But the system that they came from does not fit the system they're going to. What happens is they come in with blinders on that quality must be done this way and they put a stranglehold on a young company who's trying to get to market as quickly as possible doing the right thing. But they don't have to do way over the right thing in order to really make maximum use of their resources. I think one of the things I was going to say and hope it's not heresy on this podcast, is there's a real chance of overemphasizing or at least wrongly implementing quality relative to the size of the company. Let's face it, young companies who are especially pre- revenue, pre- commercialization don't need all of the bells and whistles and the big system that a more established company needs. I'm a huge fan of pragmatic approaches. To look at a problem, it's a business problem with patients in mind, and we've got to solve this problem. It could be, hey, we need a quality system. It could be, let's get a few procedures in place and start thinking quality before we add on all of these extra layers and pieces and personnel. Because at the end of the day, you could run yourself right out of business with the most beautiful quality system in the world that then runs the company versus the company running it. I think that's a mistake I've seen way too often, unfortunately. And what we do in creating quality systems, is we generally do it modularly. I know that you do the same at Greenlight. You start with a core, whether you call it the starter package or the beginner package or whatever you call it, and then you add on as the needs arise, you don't need A to Z right at the beginning.
Jon Speer: Yeah. And I think that this is a side effect in some respects of why some people in the industry, or even those entering the industry, view quality as a pejorative. Because they hear these stories about the consultant or the this or that. Somebody was hell bent on building this super robust quality system pre- revenue, that was designed for the largest of large companies for this little, tiny, small company and it brought them to their knees and they just couldn't survive.
John Kapitan: Yeah. Just a little story here. When I was part of a four- person company years ago, this was before I started Kapstone. It was early in my days of quality and I was gung ho. So we hired a consultant. I mean, literally just what you said. This is a paper- based system, long before we had Greenlight. We spent over a$ 100,000 dollars hiring a consultant to write procedures, implement, train, you name it, four people. It was way, at the end of the day, way more than we needed. It was not a good decision. Yes, we were all about quality, we wanted to do the right thing. And we ended up spending way too much money on a system that was way too complicated, that at the end of the day we were hamstrung by it. Learning those lessons teach us all a lot of things. I think one of them is to be efficient, to be pragmatic and to understand compliance and versed in the must haves versus the nice to have. That's, I think the key.
Jon Speer: Yeah, I totally agree with the whole modular approach. I mean, in fact, it's dogma, at least in my way of thinking about this. I've been that guy. Like you, I've implemented quality systems at companies or received a quality system before it was needed in many cases. I mean, if I'm still pre- revenue and I haven't done a regulatory submission, I'm still in the depths of design and development, I mean, there's probably four things I need to focus on. Design controls, risk, document management, and probably supplier management. Maybe there are a few others you could argue, but nonetheless, you don't need all of it. Just focus on that.
John Kapitan: No, no, absolutely. No, I totally agree. And the rest will come. It's much better to focus on a few things and actually do them, then to get a whole big system you're never going to use. Because that's the other problem I've seen. People invest in big systems, they put it in the archive file and never bust it out again until they have an audit. That's, of course, a horrible way to go about doing it.
Jon Speer: Absolutely. John, as we wrap things up today, any practical tips, pointers, themes, trends, got you's that you want to share with the listening audience today?
John Kapitan: It probably goes without saying, but I think having somebody on your team, whether that is an internal person or a consultant that has been there and done that, is absolutely critical. I mean, we make sure we do that in startups with a financial position, we make sure we do that of course, with the CEO and the sales position. But that's often overlooked in the quality regulatory area to really have somebody. It's not the same as just reading whatever the current regulation is and believing you can get by. Somebody that has made mistakes, because I've made more than my fair share and learned a whole lot, and somebody that can really champion quality. I'll say quality and regulatory within the organization is key. I think the other thing about it is just make sure it's part of the discussion. Make sure it's part of the discussion with investors, with the management team, with anybody that you work with outside. Because I think for the most part, we all want to do the right thing. Again, it's not a nefarious thing, you want to do the wrong thing and hurt people. We want to do the right thing, but there's limits on time, there's limits on all of our resources. At the end of the day, it's always about prioritizing what we spend time thinking about, what we talk about, and what we invest in. I think again, just recapping, having a person on the team, whether it's internal, external, that has the experience even just to guide that person. Doesn't have to implement a whole quality system or anything like that, but to guide and show where the pitfalls may be is incredibly important. I think having an appreciation for quality and its impact on valuation, we talked about that earlier, positively or negatively. I think just talking about it, making it a part of your language. At the end of the day, like I said, it starts with common sense and it starts with good decision making and I think you can do a lot with just some basic building blocks in place.
Jon Speer: Totally agree. I would encourage folks listening, regardless of where you are in your journey, that hopefully you've made the right investment in quality and regulatory and systems and so on. But if you haven't, it's not too late, you can still do that. Don't just say," Oh, well, I guess we'll do that the next time we do this." You still have that opportunity. There's resources out there. Whether you use the products and services that we have at Greenlight Guru, or you reach out to John and the Kapstone Medical team or some other option, just do what's right. Really, there's no excuse for you not knowing, or at least not doing something about this because you are a medical device company. There are rules crosstalk and it just makes good business sense. Because at the end of the day, what if your product was used on your child, or your parent, or a grandparent, or aunt, or uncle? You have to keep that in mind, I think, as a medical device professional, that quality of life is really important.
John Kapitan: Absolutely. Just to recap, I think apathy is unfortunately, that's part of the world we live in, but it's not a good excuse for not doing something. Even a small step is better than no step at all.
Jon Speer: Absolutely. John, thank you so much. I love having these conversations and look forward to having an opportunity to chat with you again real soon. Folks, John Kapitan with Kapstone Medical, kapstonemedical.com. Again, with a K, K- A- P- S- T- O- N- E- M- E- D- I- C- A- L. I spelled that right, right? Dot com.
John Kapitan: There you go.
Jon Speer: Check it out. As always, thank you for listening to the Global Medical Device podcast. Now you can watch the Global Medical Device podcast. I guess I should have mentioned that at the beginning. Hopefully you check that out. It's going to be on YouTube and all the places you can watch podcasts these days. If you'd just prefer to stick your ear buds in while you're out walking the dog or running on the beach, whatever the case may be, you can still listen to us too. That's fine. But as always, thank you so much for being listeners and keeping the Global Medical Device podcast the number one podcast in the medical device industry. As always, this is your host and founder at Greenlight Guru, Jon Speer. I hope you all have a terrific day. Thank you.
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