Vantage point – The new generation of surgical robots aims for economy

Analysis

For the past 10 years Intuitive Surgical has had a worldwide monopoly on robotic surgery technologies. And while it will not lose its leading position for several years to come, it will at least not be alone for much longer.

Several companies are developing robotic surgical systems that will, if they succeed, expand the market by carving their own niches. But it is not Intuitive or even each other with whom the newcomers must compete: it is surgeons themselves. If robot-aided surgery cannot be conducted at the same per-procedure cost as manual keyhole surgery, hospitals will have no reason to purchase the machines.

The first of the new generation out of the gate, barring unforeseen events, will be North Carolina’s TransEnterix. The company filed for US approval of its SurgiBot device in June and anticipates approval late this year or early next (TransEnterix goes where Intuitive cannot, June 15, 2015).

SurgiBot is a world away from Intuitive’s da Vinci line of robotic systems, TransEnterix’s chief executive, Todd Pope, tells EP Vantage.

“The surgeon is allowed to stay in the sterile field, right beside the patient, where they’ve always been,” Mr Todd says. “With the da Vinci the surgeon leaves the patient’s side and sits at a console.” He also says the SurgiBot can perform a greater range of operations than the da Vinci, which is used primarily for gynaecological and lower pelvic procedures such as hysterectomy and prostatectomy.

“We feel like we’ll get a broader indication, for general abdominal surgery,” he says. If the company does achieve this it could exploit a much greater market.

Good Sport

Also targeting this extended market is the Canadian group Titan Medical.

“We are focused on general abdominal, urologic and gynaecologic surgery,” Titan’s chief executive, John Hargrove, tells EP Vantage. Over four million such procedures are performed every year in the US, he says, and the company is targeting a “batting average” of around 20% market penetration.

Titan is beginning the process of obtaining FDA approval for its device, called Sport. A filing has not yet been made, but US approval could come in early 2017.

Both TransEnterix and Titan have developed their devices to address the same sort of market, both are single-port systems – all the instruments enter the patient’s body through a single incision, typically in the navel – and both will cost substantially less than the da Vinci. Arguably the main technical difference between these three systems is the surgeon’s stance while using the devices; Titan’s Sport is, like the da Vinci, console-based.

This is a crucial point. For these devices to be cost-effective they must enable surgeons to perform more operations than would be possible manually. A swift training process and alleviating fatigue are therefore very important.

TransEnterix says that having the surgeon standing at an operating table is an advantage as this is where they are used to being, and the familiarity means that they can become proficient very quickly. Titan contends that allowing a surgeon to sit at a console ergonomically compatible with their needs will permit surgeons to perform more surgeries without tiring.

“There’s a debate between the surgeons as to the ergonomic outcomes – sitting versus standing up at the bedside,” Mr Hargrove says.

Decisions to make

Another player trying to get a hold in this market is the UK-based Cambridge Medical Robotics, Though the company is at a much earlier stage than its transatlantic fellows it has just come out of stealth mode and hopes to unveil a prototype later this year.

Cambridge Medical’s as-yet unnamed platform will be console-based, but it has opted for a multi-port approach. Martin Frost, chief executive, says that while single-port systems only require one incision, that incision can be quite large – in excess of 2cm – and can take longer to heal than several smaller cuts.

“We believe that the gold-standard in this industry should be much smaller instruments like Intuitive is using,” he says.

So there will be multiple questions for surgeons to wrestle with when choosing a robotic system: standing versus seated; single versus multiple incisions.

But all three of these up-and-coming companies agree on one point: their devices must be cheaper than the offerings from Intuitive Surgical, and must ideally be no more expensive than manual laparoscopic surgery on a per-procedure basis.

Hitting that latter target is going to involve some canny pricing decisions. Intuitive already uses the razor/razorblade model, selling its machines relatively cheaply and making money on disposable parts and an annual service and maintenance contract. Even so, its machines are expensive, at $1.5-2m, and the annual running cost clocks in at about 10% of that.

TransEnterix intends to price its device at around half a million dollars, Mr Pope says. This could enable smaller centres, which cannot afford a da Vinci, to purchase one.

“Our per-procedure cost will be $1,000-$1,500 per case. That’s pretty comparable to the da Vinci – a little bit less, but not significantly. We will offer what’s pretty standard on service – 10% of the purchase price, so about $50,000 a year,” Mr Pope says. “We’ll have significant savings on the capital, significant savings on the service and be very competitive on the per procedure price.”

Buy, robot

This is, however, still more expensive than manual surgery. Titan’s Mr Hargrove says that currently robotic surgery costs around 30% more than manual laparoscopy per procedure.

Titan and Cambridge Medical intend to undercut this. Titan intends to sell its Sport system for a little less than $1m, and put a similar arrangement to Intuitive in place concerning consumables and service. Per procedure, Mr Hargrove says, “Ours will be priced the same as a non-robotic laparoscopic procedure.”

Cambridge Medical Robotics echoes this strategy. “We want it to be cost-equivalent to manual keyhole surgery,” Mr Frost says – and the company is prepared to give its device away in order to do it.

The company is considering a model whereby “if a hospital healthcare provider will sign up to an agreed volume of procedures per year we give away the capital asset for free. I think those sorts of models are going to have to be part of the way we go about entering the market,” Mr Frost says. “We expect to have as disruptive a commercial model as the system we’re building.”

But Cambridge Medical is some years behind TransEnterix and TransEnterix is at least 15 years behind Intuitive Surgical. The market for surgical robotics is large, and cheap or free devices will expand it – but their best chance of doing so lies in offering an alternative not only to the established leader, but to the current cheapest option: manual surgery.

To contact the writer of this story email Elizabeth Cairns in London at elizabethc@epvantage.com or follow @LizEPVantage on Twitter

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