Is Cutera violating FEA guidelines?

Certainly I'm not a lawyer. So when I received this inquiry about Cutera selling in violation of FDA guidelines, I decided to post it here on the main page and see what the thoughts around it are.

Are Cutera, Palomar, Cynosure, Alma, and the rest of the IPL and laser technology companies violating the FDA's guidelines for selling medical devices to non-physicians? Does anyone care? Should non-physicians be able to own an IPL, cosmetic laser, or Thermage unit? Is this more about protecting a market or patient safety?

Happy to have Cutera respond. 

via email from T:

I have read this blog for over a year and a half and have been interested in the business and legal aspect of this industry.

There are many issues which intrigue me but a couple areas that stand out are: 1.) The legality of sale of prescription medical devices to "business people" and 2.) How laser companies such as Cutera are double dipping and hurting doctors business through their unethical sales practice… as well as violating FDA regulations with regards to selling prescription medical devices to business people under the guise of the use of a "medical director".

First, I know first hand that Cutera is selling prescription medical devices to business people directly.  As you know the FDA clearly states with regards to medical devices:

Medical Devices: Purchasers of medical device items hereby certify and assure that such items will be used or resold only under the conditions specified below:
Medical device items are subject to the laws and regulations administered by the Food and Drug Administration (FDA). Provisions of the governing statute, the Federal Food, Drug and Cosmetic Act appear in 21 U.S.C. 331, et. seq . In summary, the Act prohibits the movement in interstate commerce of medical devices that are misbranded or adulterated. The Act authorizes FDA to initiate criminal enforcement proceedings against companies and/or individuals responsible for violations of its provisions. Moreover, the Act authorizes FDA to initiate civil proceedings to seize, or enjoin the distribution of such items. Prescription devices are subject to additional Federal, state and other applicable laws. Federal law requires that prescription devices be in the possession of either persons lawfully engaged in the manufacture, transportation, storage, or wholesale or retail distribution of such device, or practitioners licensed by their state. Federal law also requires that prescription devices be sold only to or on the prescription or order of a licensed practitioner for use in the course of his or her professional practice, and that the devices are labeled in a specific manner. Refer to 21 CFR 801.109.

The area underlined above states the obvious and is in direct contrast to this “medical director” concept used by companies such as Cutera.  I have a copy of Cutera “medical director” form and no where does a doctor neither signs the form nor put their license on the form for the purchase of these devices.

These “medical directors” don’t own the business, the lasers are not used in the course of their professional practice” and yet Cutera and other laser companies continue to sell these devices in this manner.

This leads into my second point. As this is happening, it increases competition to “legal” laser clinic and medical offices that have the authority to own and operate these prescription devices.  These laser companies are selling their prescription devices to their “core customer base”, physicians and then turning around…even in the same town and selling to “non-physicians and increasing competition. As well, the AAD and other medical organizations allow these companies to display and exhibit at medical meetings. This is sickening.

It would seem to me that a site that is committed to the success and professionalism of the spa industry, such as medicalSpaMD could shed some light on the sale practices by the laser companies. You do a great job telling people how to run and market their clinics but if you really want to make a difference and help your fellow physicians succeed, it would helpful to eliminate the “illegal” practice and competition being perpetrated by laser companies.

Needed: Clinical Education Programs for Dermatology

Advocating for Better Continuing Clinical Education Programs and Clinical Exchange Programs

In the field of Cosmetic Dermatology, Continuing Clinical Education Programs are terrible and Clinical Exchange Programs are nonexistent. Who is to blame?

The big laser companies are to blame! Cutera, Lumenis, Cynosure, Palomar, Sciton and other big laser companies have not developed meaningful Clinical Education Programs and they have not encouraged or facilitated Clinical Exchange Programs. This includes Cutera’s bi-yearly Clinical Forums.

Why should they do this? Why should they put a great deal of time and resources into continuing clinical education programs and clinical exchange programs? Because clinical outcomes would be better, demand for laser treatments would increase, their customers (the providers) would do better financially (and professionally) and finally, patients would get better and safer treatments with better clinical outcomes. When the tide is higher, all boats float at a higher level. The tide (clinical outcomes) is not where it should be and this is mainly due to the laser company’s apathy and disdain towards continuing clinical education and clinical exchange programs.

We spend hundreds of thousands of dollars to purchase our lasers and then they charge us tens of thousands of dollars per year in support. They abandon us. They don’t know how to use the lasers themselves and they expect each of us to figure it out through trial and error. Trail and error on our paying patients. Yes, I am fighting mad about this and you should be too.

The correlation between clinical competence and clinical outcomes should be obvious . . . Just as comprehensive initial training gives rise to predictably excellent clinical outcomes, the ability to exchange ideas and experiences with other [laser] operators dramatically magnifies your clinical competence . . . a worthwhile clinical exchange program should utilize one or more of the following media: Online Forums, Teleseminars, Webinars and live phone support . . . as the field of [laser] therapy advances, all new clinically relevant findings and advance techniques should be made readily available to you via a continuing education program. This may take the form of a newsletter, website, DVD, Video and/or live workshop. ---The IPL Dog & Lemon Guide

How do I know there is a problem? Because I see it everyday in my practice, I talk to other providers and I read the blogs. I read how physicians don’t know how to use the Fraxel, I read how physicians don’t know how to minimize pain, I read how physicians don’t know how to prevent and treat postinflammatory hyperpigmentation. I read the blogs and I see lots of patients are not very happy with the outcomes of their laser treatments. I read the content of their complaints and these patients are not complainers, they didn’t get the results they wanted or they got a complication they didn’t want. In addition, their provider didn’t have good answers when this happened. Their providers were like “deers caught in the headlight”. These patients did not get the best treatments because their provider were not properly informed and educated about the cosmetic procedure they were performing. My prospective patients read these blogs and they don’t want to have the laser treatments because they think the treatments hurt, they won’t work or they will produce unwanted side effects.

I look around and I see very few meaningful continuing clinical education programs. I look around and I see zero clinical exchange programs other than the type we are trying to have on MedicalSpaMD.com. Zero clinical exchange programs from the big laser companies. Zero!!!

How do I know there is a problem? I have to find out about new techniques by luck and happenstance! For example, the only reason that I know that you can do ActiveFx with intervals of one month rather than 3 months is because I listened to a Webinar where this was mentioned as an afterthought. Lumenis has no mechanism or plan to keep providers informed about new techniques or thoughts. The only reason that I know you should not do Fraxel more than 3 times in a patient with Melasma is because I happened to complain about something else and the clinical educator mentioned that Reliant was receiving reports that the fourth and fifth treatments make Melasma worse. Reliant had no system and has no plan to keep its providers informed about new techniques or new thoughts. This makes me mad. When I speak to the companies about this, they pat me on the head and tell me to go away like a good boy. They just don’t get it! They tell me that I am the only provider asking to be kept informed. They try to make me feel stupid for asking questions and expecting to be kept informed. I don’t feel stupid, I think they don’t care and I think this is not smart.

They are not going to get it unless we force it down their throats. I say, “Let’s force it down their throats!” We can do this if we all politely and forcefully ask and demand these type of programs. Numbers will get their attention. When some companies do it, the others will do it because they will be able to use it as a marketing tool.

If you agree with me, please contact your laser company (your local sales representative, the person who runs the Webinars and the Corporate Vice President in charge of Marketing and Education) and ask for meaningful programs in the next 6 months at the lastest. Tell them how disappointed you are in their performance so far. Tell them that you would not recommend their lasers to another physician because they don’t have clinical exchange programs and continuing clinical educational programs.

All they have to do is put out a monthly Newsletter and put up a Discussion Bulletin Board on the Internet for their clients. They should also publicize and promote the use of the Newsletter and the Bulletin Board. They should provide expert moderators who contribute to the discussion. They also should summarize or transcribe all of their Webinars and Clinical Forums so more physicians have access to this information (without having to sit at a computer for 2 hours each time to view a marketing Webinar). Each Webinar and Clinical Forum should serve as a “discussion springboard” off of which a Discussion Bulletin Board with Expert Moderator is launched.

If you would like these things, contact your laser company today. If they pat you on the head and give you excuses about why they can’t do this or won’t do this or why they don’t think it is important, send them a copy of this website and let them read this entry. Tell them they can do it now or do it later. Tell them they can do it the hard way or do it the easy way. Tell them the view never changes unless you are the lead dog. They want to be the lead dog on this issue.

Cutera Lasers: The old bull & the young bull

Some of Cutera's customers seem less than thrilled with the level of service and hospitality they're receiveing:

 
From the thread on Is any Cutera technology worth buying? 

"What a nightmare! The folks at Cutera have seemingly gone mad. I imagine that business is slow for them lately, and it shows. I agree with the person who said service contracts must be how they're cashing in these days. I am stunned at how virtually impossible it seems to avoid the exorbitant fees Cutera is asking for what I have experienced as substandard service. I have had too many "surprises" when it comes to their seemingly ever-changing service arrangements and hidden costs (I never know I'd be paying another $6800 for a "replacement" Prowave a little over 1 yr after I spent $25K to "buy" it!). Service contract information was never properly explained to me and I feel like I am being extorted for cash. My only options are to spend $16,000 (yes, $16,000!) for a 1-year service warranty (of course this does not cover Titan when it runs out of shots), or spend $6800 for a new Prowave (still paying off the $25K lease!)! I have spoken to more docs lately who deal with Cutera and it seems we are all told different things or left with different impressions about the longevity of the handpeices, service warranties, handpeice replacement and contracts. I get the feeling that whatever needs to be conveyed to make the sale is what is conveyed! Then once you buy, you are stuck! And of course they know they have a captive audience of customers who rely on the technology and have no other means of servicing the equipment. And of course all of this is as clear as mud when you are first being wheeled and dealed. It seems very short-sighted of Cutera to anger and frustrate their current client base and think they'll continue to get new business.

I admit, I enjoy the safety and efficacy of the 1064, Titan and Prowave, especially in the darker population we serve, but I am no longer convinced it's worth it. I would not purchase another item from Cutera, not because of the technology but because of the inferior service and what I consider to be unfair business practices. I feel misled and misinformed, which is very unsettling given that the business relies upon this technology!
Any attorneys out there??" - SkinHealthMD

And Dermadoc's not far behind:

"SkinHealth MD sounds like one of the Dermacare franchisees that got roped into a 'required' equipment package with Cutera. We were told they had the premier technology for all the applications necessary for a successful clinic. I'm glad you are pleased with the Titan, but I think you are in the minority there. I don't have any issues with the ProWave, LP560 or 1064Yag, but then again, we didn't have nearly as much information available for comparisons as there is now. If we did, I probably would have made other equipment choices also. I am definitely with you in that we won't be buying any more Cutera equipment." - Dermadoc

It looks from the comments that Cutera's lasers aren't the problem (although the Titan and Pearl don't fare well) it's the strong-arm tactics around support and after purchase services that are so irritating.

Cutera's rapidly developed a customer service problem for themselves. In the old days that wasn't something to be feared since the plastic surgeons and dermatologists weren't sharing much information about what they used. Certainly that legacy of keep everything hush-hush is alive and well locally, but these days a single bad experience can poison the entire well. Cutera's management (and Palomars) would do well to understand this.

It's like the story from the move Colors that Robert Duval says to Shawn Penn:

There's two bulls up on the hill looking down at a bunch of cows. The young bull says to the old bull, "Hey Dad, lets run down this hill and &%*# that cow!" The old bull turns to the young bull and says, "Son, lets walk down the hill, and (&%)# them all."

Now perhaps this is harsh, but Cutera seems to be that young bull.

It shouldn't be the goal to sell you a laser, it should be the goal to sell you a dozen lasers. 

Palomar, Cutera, Cynosure & Alma: Winners & Losers

 About Palomar's current market situation:

Revenues were down 11% for the quarter year over year. The company points out that the second quarter last year contained a huge royalty payment from Cutera for a patent license agreement. Therefore, it would like investors to subtract the payment before comparing the two quarters.

Investors weren't buying it. The stock has dropped 18% since its pre-earnings release close on Wednesday last week. The problem is that royalty payments are becoming a substantial part of Palomar's business. Just last April it added Alma Lasers to the list of companies that pay it royalty payments -- the rest of the list includes Cynosure and Laserscope, a subsidiary of IRIDEX.

If you do discount the large royalty payment, the second quarter looks pretty good for Palomar. Product revenues were up 31% year over year. Its new StarLux 500 seems to be performing well with many existing customers trading up from the StarLux300. Product revenues were also driven by increased growth outside the U.S. Sales shifted from 14% foreign sales in the second quarter last year to 29% in the most recent quarter.

There is something to the company's argument that sales growth is the more important measurement. I'd rather see a company growing sales substantially than growing revenues through licensing its technology. The patents on that technology will eventually run out and then what's the company going to do?

Between the sales growth and all the royalty payments, Palomar has nearly doubled its cash and securities from a year ago and now has $121 million in the bank. The company should probably use some of that money to pick up new technologies that might complement its current lasers. It's also developing mass-market consumer products in combination with Johnson and Johnson and Gillette, a division of Procter and Gamble, so some of the money could be used for increasing research and development of home-based products.

Via the Motley Fool

According to CIBC World Markets, the cosmetic laser market is valued at about $1 billion worldwide, and sales grew 15% in 2006 over the previous year. While hair removal remains the top use of cosmetic lasers, with growing numbers of non-core markets acquiring them -- hospitals, family practitioners, OB/GYNs, and even spas and beauty salons -- additional uses will continue to climb in importance.

Investing in the future
Competition is particularly cutthroat and research and development continues to play a central role in which company remains dominant. Based on revenues, Candela (Nasdaq: CLZR), which says it created the aesthetic laser market, is top dog with $154.5 million in sales at the end of 2006, followed closely by Palomar Medical Technologies (Nasdaq: PMTI). On a market valuation basis, however, Candela is actually at the bottom of the heap, with its shares declining in value from numerous earnings misses.

The power of ideas
A company's intellectual property remains its best defense against losing superiority. Once it turned profitable, Palomar had the wherewithal to defend its patents, and it began notifying the industry of violations. It demanded -- and ultimately received -- licensing agreements and royalties from many rivals, including Cutera, Lumenis, and most recently privately-held Alma Lasers.

It's also lined up a licensing agreement with Procter & Gamble's Gillette for the manufacture of a home-use device -- as has Syneron -- and another with Johnson & Johnson, though both are still years away from being mass marketed.

Unlike its peers, Candela has chosen not to pay up, instead countersuin on charging that Palomar has infringed on Candela's patent portfolio. In a bit of jury-shopping, it's filed lawsuits in both Massachusetts (where both it and Palomar are based) and in the eastern district of Texas, which has a reputation of siding with patentholders.

Is ANY Cutera technology worth buying?

My physicians were underwhelmed with the Cutera Xeo.

We were using the Cutera Titan & ND Yag. The inexperienced physician in the location where we had it thought it worked well, but my more experienced physicians hated it and, in effect, wouldn't use it.

The 'single do everything platform' is also something I generally don't like since I can only have one treatment room going at a time. I guess that Cutera is trying to target individual physicians with a 'this one device will do everything' approach. While you might originally might think this is a good idea it's hard to grow if you have to invest another $100k for each additional treatment room.

LH comments about Cutera:

"At this time, I have very little respect for Cutera. They have over promised and under delivered on many things (Titan, Genesis, etc). The only time they contact my office is when they want to sell me an upgrade. Their webinars are only geared to the new person getting into aesthetics. Their webinars are only made so they can sell you something. I have watched many webinars and have stopped because they are a waste of time.

I also have issues with a company that will sell you a brand new system and will not back it up if you sell it on the secondary market. They will not sell refurbished Titan heads to anyone other than the original owner. They will not train any non-Cutera laser techs. This is so they can charge more for repairs. They will not send parts to any non-Cutera laser techs. Therefore, Cutera has made my used laser worth much less than it should be.

Unless Cutera changes their ways, I will never purchase a Cutera laser again. I will also never purchase an upgrade for my current sysytem."

And Dermadoc says about Cutera:

"My frustration is two-fold: first, Cutera totally overhyped the Titan, despite a few (very few) providers who seem to be getting what they consider good results. Second, how could this coatrack be marketed without a more consistent technique being identified, along with consistent recommendations for patietn selection, expected results, etc. It was sold on a wing and a prayer and like LH, I will find it very hard to purchase anything from Cutera again."

I'd have to agree with LH. The only time I saw the Cutera rep was during sales calls. Cutera's refusal to support their technology outside of the origional purchaser is a mistake and greatly lowers the value of their entire system. I can't see that investing in a system with such a downside when trying to sell is such a good idea.

I'm curious as to everyone elses experience with Cutera technology or dealing with Cutera as a company. (I'm even interested in what the Cutera reps on this site might have to say.)

Candela just doesn't work.

I hate when someone sends me something that doesn't work.

 
I'm on just about everyones email list. Palomar, Candela, and the rest are constantly sending me emails for webinars, training and such. I rarely find the time to log in and even more rarely learn anything of interest. However, it only takes one little tidbit to make it worthwhile. Unfortunately the tidbits are few and far between.

Candela just sent me another invitation. It doesn't work.

Now maybe I'm in an odd situation. After all I'm a little tech savvy. I use gmail. I use Firefox. It may be that the unique configuration prevents Candelas emails from launching correctly on my system and is fine on everyone else's.

But I don't care. It doesn't work for me... so it just doesn't work.

Candelas soliciting my participation and time. It's their responsibility to make sure that the powers turned on before I get there. My experience with and opinion of Candela just dropped a notch. How could I trust a technology company to provide me with service when their sales and marketing (you can bet the most important part in Candelas opinion) can't send me an email link that works. I grow immediately concerned that customer support may function just as poorly.

Hmmm.. Now their entire site won't load. Maybe it is me.

(There's a parable here i think.) 

Palomar Ranks 3 on 25 fastest growning tech companies.

Palomar must be firing on all cylinders since Business 2.0 ranks Palomar #3 on top 25 fastest growing tech companies.

Here's an expanded snapshot of Palomar's growth and income. 

Palomar Medical Technologies

Rank: 3 (Previous rank: 6)

Employees: 225
Headquarters: Burlington, MA
Sector(s): Medical
Why it's hot:
These days even 20-somethings are opting for a nip and a tuck. That's spiked demand for Palomar's six-figure gear, which uses lasers and light pulses to tighten skin, vaporize blemishes, and remove unsightly body hair.

Palomar Medical Expands European Distribution

50% year over year growth...  I wonder if that's all thanks to the $12,000 they charge for new IPL heads? Cutera, Alma, and the rest are playing second fiddle for sure.

Palomar selling to overseas day spas and hair salons.

The legal aspects of opening and operating medical spas or nonsurgical centers comes up a lot.

In general it's up to individual states to decide what is or isn't a medical treatment and who can or can not operate medical devices. It's obvious from past history that medical device manufacturers would like to be deemed medical, but not operate as though they were. I guess spas and salons love to offer medical treatments. (Perhaps oversees it's not medical)

This comes directly from Palomar's web site on International Distribution Opportunities:

...seeking qualified international distributors for our laser/pulsed-light cosmetic devices into the doctor and spa/salon markets. To qualify, your organization must offer sales, service and marketing support. In addition you must have a presence in the medical and/or spa/salon markets.

I don't really blame Palomar for selling regulated devices into the third world. They're just trying to balance the trade deficit.  Not really a criticism, just an observation.

Thermage & Medspa MD: What's getting tightened now?

 Thermage actually likes Medical Spa MD enough to buy me a coffee.

Clint Carnell, The VP of Domestic Sales for Thermage and I met for coffee to talk about a number of things, some of which relate to this site. I'd had lunch with Clint previously. Evidently my Thermage rep Chris likes me more than my Botox rep. At least Chris sent me a big hunk of plastic.

Here's a list of parts of the discussion I feel I can divulge.

• Thermage had some internal discussions about whether it was a good idea to approach or contribute to what amounts to a public forum (this blog) but they've decided to give it a trial run at least. I got the feeling that Clint and others at Thermage were willing to try something that's new in the marketplace on their feeling that I would be fair to them. (With the hammering that Dermacare and the other medical spa franchises
  have taken on this site I give Thermage a great deal of credit for that.) I think that out there. If you're a company and don't have a blog you're doing yourself a disservice. There's no better form of constant contact with your target market as long as you're not just publishing the same old lame press releases. There's a paradigm shift in marketing that changes the traditional way that's taught in schools and I think more highly of Thermage that they're willing to engage in it. It speaks highly of the brains running the company.

Chris Anderson has some feeling on business blogs; "the natural voice of the boss is fundamentally incompatible with the voice of the blogger, at least as regards their own company affairs.". But wait, there's still hope. Chris goes on to say "The best business blogs come from the employees, not the bosses. They have more time, and are less prone to marketing gobbledygook and gnomic platitudes. And those kind of blogs are on the rise, not the decline."

• Clint told me that a large number of Thermage's reps now read Medspa MD. I thought there was something going on when the Does Thermage Work Poll received 200 positive votes without any negative votes after it had been neck and neck for weeks. Surprise. Good work guys, but now the Cutera reps (they're here too) will probably start dropping that positive percentage. I'm going to have to block ISP's from tallying more than one vote. Perhaps I'll post a Thermage vs. Titan poll and let them battle it out.
  
  
• Thermage has been trying to track down the producers of the refurbished Thermage tips for a while. I gathered that the refurbished tip guys know this since they're changing PO boxes every couple of weeks. Thermage is going to post to this site their position that the study on reactivating or refurbishing Thermage tips is bogus and that the physician who is credited with authoring the paper doesn't exist. I'll be posting Thermages position on this as soon as they send it to me.
  
  
• Thermage is sitting on a number of new thermage tips until they're sure that all their efficacy problems are behind them. I can see that they don't want a repeat of Thermage's previous problems that caused a backlash among physicians. If they can crack the cellulite conundrum they'll be set.
  
  
• I queried Clint about Thermage and the competition from Cutera's Titan and/or Palomar's fractional IR treatment heads. He was reticent to say anything bad about competitors but it was obvious to me that Thermage really thinks that they've got this modality nailed down. I didn't detect any sweating which is good. The companies that focus on what the competition's doing inevitably wind up fighting the wrong battles. I expect to get hard and fast specifics from Thermage and compare the technology providers side by side. Perhaps a Palomar or Cutera rep will pass this up the food chain and we can get some info from them as well. Different strokes for different folks.
  
  
• Clint's smart and I liked him tremendously. Now that Thermage is a public company they face challenges that they didn't when they were private. If Clint is representative of Thermage's leadership I'm impressed.
  

LipoSonix: High Intensity Focused Ultrasound (HIFU) for your medspas body scuplting.

Tested on pigs with slow metabolism, LipoSonix wants to be the first to have a technology solution to liposuction. No word yet on if the test pits show impoved body image.

From the LipoSonix site: 

LipoSonix is taking a rigorous, science-based approach to technology development. All new clinical studies begin with the demonstration of patient safety and then progress to detailed efficacy studies that provide evidence for the aesthetic benefits of our device.

LipoSonix achieves targeted reduction of tissue volume by precisely focusing high intensity ultrasound energy to cause thermocoagulation of adipose tissue. A custom designed ultrasound transducer delivers energy across the skin surface at a relatively low intensity, but brings this energy to a sharp focus in the subcutaneous fat. At the skin surface, the intensity of the ultrasound energy is low enough so that no damage occurs. The focusing of the ultrasound beam at specific depths beneath the epidermis, combined with proprietary application techniques, results in adipose tissue thermocoagulation. This result is achieved through several mechanisms of action, including temperature rise secondary to direct absorption of ultrasonic energy and mechanical processes such as cavitation, streaming, and shear forces with their inherent thermal effects.

Once adipocytes have been disrupted, chemotactic signals activate the body's inflammatory response mechanisms. Macrophage cells are attracted to the area to engulf and transport the lipids and cell debris. This results in an overall reduction in local adipose tissue volume. The goal is to achieve precision that will result in effective non-invasive body sculpting.

LipoSonix' initial efforts involved extensive pre-clinical in vitro and in vivo testing to demonstrate proof of principle and refine specific treatment protocols. Initial human feasibility studies were performed on patients undergoing abdominoplasty surgery, allowing for detailed evaluation of the patho-physiological process. The safety of these trials was assessed through evaluation of extensive blood panels, gross pathology, histological analysis, and non-invasive imaging (including computed tomography (CT), magnetic resonance imaging (MRI), and ultrasound.

Abstracts from Plastic Surgery 2005 (.pdf), 2006 (.pdf); the American Academy of Dermatology 2006 (.pdf); and the American Society for Aesthetic Plastic Surgery 2006 (.pdf)

(hat tip: Engadget , Medgadget, & Gizmag)