Do Physicians Make the Best Entrepreneurs?
Startups founded by physicians make uniquely important contributions to medical device development, according to a recent study published in the May edition of Medical Care.
Before reading too far into the study results, it’s important to note that study talks about specific kinds of contributions to medicine. They relate to Class III medical devices, which are devices that support or sustain human life and require significant testing to prove their safety and efficacy.
The study, from Temple University researchers, analyzed premarket approval applications (PMAs) to look for ideas that came from physician-founded startups and non physician-founded startups. The researchers analyzed 170 PMAs filed by Medtronic, Johnson & Johnson, Boston Scientific, and Guidant between 1978 and 2007.
Sheryl Winston Smith, PhD, and Andrew Sfekas, PhD, used a text-matching algorithm to compare content in the PMAs to content from 118 startup patent applications. These startups had at some point received investments from one of the four major medical device companies. Startups from both groups produced roughly the same number of patents. However, the PMAs contained more ideas from physician-founded startups. These companies contributed about 11% of the content to the total body of PMAs analyzed, while non physician-founded startups contributed 4%.
The study concluded that “device manufacturers gain more from the patents of physician-founded firms than from those of non-physician-founded firms in their subsequent invention and innovation efforts,” a press release said.
It isn’t surprising that physicians make good entrepreneurs, as they have a few things in common with life long entrepreneurs. For one, both possess a certain kind of drive. Also, as Northwestern University’s Kellogg School of Management Professor David Dranove said in a recent blog post, physicians aren’t risk-averse. “Like entrepreneurs, physicians launch their careers by making large investments — up to ten years of post-graduate training. Such investments do not come with a guarantee,” he wrote.
It would be interesting to see a similar analysis applied to devices subject to Class I requirements, a category that several mobile medical applications fall into.