December 29, 2010

Bruce Frank left Roche Diagnostics a decade ago and soon started his own consulting firm, Indianapolis-based Bruce R. Frank & Associates. Since then, he’s done projects for more than 35 companies, including area life sciences firms such as Bioanalytical Systems, Dow AgroSciences, Polymer Technology Systems, ParaPro and ImmuneWorks. His work also has taken him to Germany, Saudi Arabia and Egypt. Frank, a native of the Philadelphia area, worked for the international consulting firm McKinsey & Co. after playing professional basketball in Europe immediately after college.

IBJ: What is the single biggest change hitting the world of medical devices right now?
A: In any case around medical devices, it’s always smaller and cheaper and more accurate. Always. Particularly smaller—so you can become more mobile. But as you get smaller, then your accuracy is off. Unless it works, I don’t care how mobile it is, I’m not going to use it. The common factor for me would be those three variables.

IBJ: How do you see the new U.S. health law affecting the medical-device arena going forward?

A: The whole life sciences industry in the United States has been living on welfare from the Medicare program. The prices in this country for life sciences products are probably 50-percent higher than anywhere else in the world. And as a result of that, we probably have about 20-percent more companies feeding at the trough. Well, that gives us strength, but it’s going to have to be cut back. Prices have to come down. And that’s going to eat at the margins of these segments.

IBJ: You do a lot of work in Germany, which has maintained an impressive base of manufacturing in spite of low-cost assembly competition from Asia. What's the biggest thing you think Indiana manufacturers could learn from their German counterparts?

A: The Germans are the high-tech, high-precision, high-price manufacturers. We’re in a different market segment [in Indiana] than they are. Unfortunately, in the market segment we’re in, we compete against the Chinese: high volume, low cost. And we can’t compete with them. I think it’s [a strategy] we should pursue, but it’s medium-term to long-term in its results.

The question is, what do we do in the next five years? The Germans, they’re getting hurt too, just like we are. They have manufacturing plants over there and they talk about the Chinese too. But you go to a German factory, there are not many people in them. The higher up the food chain, the more automation you have. And that’s where we miss it. Too few of our laborers graduated from high school. The Germans have put a large focus on education.


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