Makers of heart valves compete for sales

FRIDLEY, Minn. (AP) — Five miles may be all that separates Twin Cities-based St. Jude Medical and Medtronic, but competition between the two heart valve manufacturers has reached a global scale.
The pulse of the competition also quickened recently when both received federal approval to sell a heart valve made entirely from soft pig tissue. An improvement over earlier tissue heart valves with a hard plastic rim, the all-soft version is more natural and likely to last longer.
Between the few dollars the medical device makers pay meatpackers for each pig heart and the $5,500 hospitals pay for each heart valve are two key elements: processing and selling.
Having spent eight years developing the processing method, the companies have now dispatched hundreds of salespeople to compete against one another.
For St. Jude, which has dominated the world market with its graphite mechanical heart valve for 20 years, the new tissue heart valve is key to its strategy for the future. Mechanical valves are best suited for younger people, and the population is growing older.
For Medtronic, said executives, the valves are a big step toward making a tissue valve that will last a lifetime.
“The tissue valve is more important to St. Jude than Medtronic because it’s a bigger piece of a smaller company,” said Carol Winslow, an analyst who follows both companies for Jeffries & Co. of Northfield, Ill.
Medtronic includes mechanical and plastic-rimmed tissue heart valves among its cardiovascular businesses, which contributed 22 percent of its $2.44 billion in sales for the 1997 fiscal year ended April 30. St. Jude, on the other hand, attributed 33.3 percent of its $808.8 million in sales in fiscal 1996 ended December 31 to mechanical heart valves.
Like other medical devices, heart valves have a markup of more than 80 percent.
While the buying decision for other types of medical products is often made by hospital administrators and health maintenance organizations, the surgeon is still the decision-maker when it comes to heart valves.
“Heart valves are a life and death situation,” said Felix Hsu, director of marketing for Medtronic. “Hospital administrators aren’t willing to take on that risk.”
But surgeons can be a tough sell.
“None of us believes sales reps,” said Dr. Colleen Sintek, a surgeon who began implanting the Medtronic pig tissue valve in 1993 as part of clinical testing. “We tolerate them because they bring us the product.”
Sintek became acquainted with the Freestyle through the Medtronic sales representative who sells to the Kaiser Permanente Los Angeles Medical Center, where Sintek practices.
“Our Medtronic sales rep happens to be a very bright guy who doesn’t try to sell,” she said. “We consider him almost a colleague. He knew we had a big valve practice.”
Both St. Jude and Medtronic acquire pig hearts from slaughterhouses. They both freeze the hearts and ship them to their plants — Medtronic’s in Irvine, Calif., St. Jude’s in St. Hyacinthe, Quebec — where they are inspected. Then the pig hearts are processed, and that’s where the two companies differentiate their valves.
Valves that will become Medtronic’s Freestyle are excised from the heart in a way that includes the aortic root, giving the surgeon the option to cut it to fit different-sized hearts. Then they are treated in such way that makes them supple, durable and inert.
Valves destined to become St. Jude’s Toronto SPV — named for Toronto General Hospital, where they were invented — are also processed to make them supple, durable and inert. Then they’re cut in a way that gives surgeons fewer options for fashioning the valve, but ensures more consistent implantation.