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Generic Medical Devices, Inc. Of Gig Harbor, Wash. Launches

Posted on: Monday, 11 December 2006, 09:01 CST

Generic Medical Devices (GMD), Inc. today announced the official launch of the company, the first to introduce a new category of medical devices by offering commonly used and efficacious surgical products at generic prices to address the rising cost of healthcare. Following the simple and successful formula utilized by the generic pharmaceuticals industry, GMD will develop and distribute generic alternatives to standard-of-care devices, offering payors, clinics, hospitals and physician-owned surgical centers the benefit of medical devices with proven safety and efficacy, but at lower prices.

"Today, we are pioneering a new category of medical devices that fulfills an important need in the healthcare industry at a time when costs are scrutinized," said Richard Kuntz, president and CEO of Generic Medical Devices. "Many of the medical devices commonly used in today's healthcare organizations have undergone few, if any, changes in the decades since they were first introduced to the market. Nevertheless, purchasers of medical devices continue to pay a premium for these commoditized products and are demanding alternatives. Like with generic pharmaceuticals, GMD will be offering medical devices that are equivalent, if not better, than their branded counterparts and at prices that will be attractive to hospitals, physician-owned surgery centers, Medicare and third-party payors."

Medical devices are an $80 billion-a-year industry dominated by brand name companies or products. Prices and profits have consistently risen as companies reap the benefits of patent-protected technology. In fact, rising prices have led the Social Security and Medicare Board of Trustees to predict that Medicare will go bankrupt by the year 2019, seven years earlier than previously predicted. This acceleration is spurred on by such factors as prescription drug subsidies, an aging population and fewer payroll taxes being paid into the system, all of which put a strain on healthcare.

The pharmaceuticals industry has responded to the pending Medicare crisis by offering generics. The idea is simple: once the patent on a brand name drug expires, competitors are allowed to develop, market and sell generic alternatives as long as they offer the same safety and efficacy as their branded counterparts. Manufacturers of generic products are able to avoid costs associated with bringing a new product to market, including expenses associated with research and development, costly clinical trials, protracted governmental approval and marketing costs. As a result, these companies are able to sell equivalent versions of brand name products at significantly reduced prices. By reducing the costs of some drugs, generics make room in the system for innovative new products. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies and even more billions are saved when hospitals use generics.

A New Approach to Medical Devices

Despite this success, the generic model has never before been applied to the medical device industry. GMD is changing that by leveraging expired patents on standard-of-care surgical devices and bringing generic alternatives to market. Devices chosen by GMD will all have existing 510(k) classification, reimbursement by Medicare and third-party payors, established product safety, efficacy and outcomes, and a trained surgeon/physician base. As with pharmaceuticals, generic medical devices are developed based upon the specifications for existing FDA-approved products that are becoming a commodity in the marketplace. The FDA considers generic products to be "substantially equivalent" to the already-marketed devices, meaning the generic versions are considered as safe and efficacious as the original brand name products.

"With increasing regulatory oversight creating transparency around healthcare costs and high-deductible insurance and rising co-payment charges becoming more common, there is an immediate need in the healthcare system for affordable alternatives to existing treatment options," said Ron Bromfield, VP sales and marketing at Generic Medical Devices. "Generic medical devices, like generic pharmaceuticals, offer a significant opportunity to deliver all the benefits and safety of branded devices, but at costs that help reduce strains on the healthcare system. In addition, money saved by healthcare providers will enable them to invest in new equipment and infrastructure, further improving patient care."

GMD's first products will be made available to hospitals, clinics and physician-owned surgical centers worldwide in the first quarter of 2007.

About Generic Medical Devices

Generic Medical Devices (GMD), Inc. is the world's first developer and distributor of quality medical products marketed at generic prices that allow healthcare providers to meet the standard of care for patients. Recognizing the need for healthcare reform and the ever-increasing burden that America's aging population is placing on the healthcare system, GMD set out to develop lower-priced products with proven outcomes and "better-than" product features. These generic devices, based on products that are becoming a commodity in the marketplace, allow the healthcare system to provide more patients access to innovative and often expensive treatments while helping to stem the tide of rising healthcare costs. For more information, please visit www.genericmedicaldevices.com.

Safe Harbor Statement

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. This press release contains forward-looking statements, which reflect our views regarding future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties, including those identified below, which could cause actual results to differ materially from historical results or those anticipated. The words aim, believe, expect, anticipate, intend, estimate and other expressions, which indicate future events and trends, identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending upon a variety of factors, including, but not limited to: the effect of government regulation, including when and if we receive approval for marketing products in the United States; the impact of international currency fluctuations on our cash flows and operating results; the impact of technological innovation and competition; acceptance of our products by physicians and patients, our historical reliance on a single product for most of our current sales; our ability to commercialize our recently licensed product lines; our intellectual property and the ability to prevent competitors from infringing our rights; the ability to receive third party reimbursement for our products; the results of clinical trials; our continued losses and the possible need to raise additional capital in the future; our ability to manage our international operations; our ability to hire and retain key technical and sales personnel; our dependence on key suppliers; future changes in applicable accounting rules; and volatility in our stock price. We cannot assure that we can continue our business through new and innovative product introductions.

Source: Business Wire

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