Becka DeSmidt, Technology Insights
Safety concerns and questions about the clinical value of the da Vinci robot may be at the root of Intuitive Surgical's Q2 decline in sales and subsequent fall in stock value.
The drop in the company's shares was the steepest since 2008 and has left many wondering whether this is the beginning of a long-term trend or merely a blip in the radar.
Decline in sales of robotic systems tied to slowdown in gynecology surgeries
As the Daily Briefing reported this week, Intuitive's fortunes have fallen $6 billion over the last five months as sales of its da Vinci robots failed to meet expectations.
Explaining the reduction in demand for its systems, Intuitive cited a slowdown in benign gynecology procedure growth in the United States. For a time, hysterectomies were the fastest growing procedure category on the da Vinci.
However, both a recent study finding greater robotic hysterectomy costs without added clinical benefit, and an ACOG position statement that encouraged more conservative use of the robot for hysterectomies likely contributed to the decline. Reports like these have solidified the concerns of many observers that large-scale data comparing robotic and laparoscopic procedures is either lacking or may favor traditional laparoscopy.
Safety concerns continue to build
But there is more to the story than skepticism about the robot’s clinical utility. An ongoing FDA investigation into the rise in adverse events associated with the robot both reflected and further stoked safety concerns.
A number of issues have recently arisen with the robotic system: reported malfunctions in the robot's scissors, improper sanitation of the instruments, and rising incidences of surgical complications. This week, the FDA delivered a warning letter to Intuitive criticizing its process of notifying customers of safety issues, and issued a limited recall of a number of da Vinci systems on the basis that they were not properly tested.
The confluence of these negative events has contributed to growing awareness of the system's fallibility among physicians, patients, and hospital leaders. Any level of negative press about Intuitive has the potential to render hospital leaders wary of investing in the da Vinci robot--and this year has seen an unprecedented level of criticism levied at both the company and its product.
Hospitals have a role to play in responding to the negative press to assuage patient concerns. For starters, establishing processes to inform surgeons of device recalls and safety concerns related to the da Vinci can help protect patients from equipment failures. Setting strong training and credentialing standards is also a must to ensure that user errors do not negatively impact patient outcomes.
What does the future hold for Intuitive?
Ultimately, this disappointing quarter is unlikely to be a bellwether of Intuitive's long-term fortunes. As Intuitive emphasized in its earnings call, and as many financial analysts have speculated, system sales and company growth are likely to rebound—though perhaps more in international markets than domestically.
If hospitals and health systems continue their trend toward a more conservative approach to technology investment, and the robotic market nears saturation, we may see a tapering off of Intuitive’s influence in the United States. Intuitive may increasingly aim its sights at the international market still primed for growth.
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