How Medical Manufacturers Are Pivoting During the Coronavirus Pandemic

Recovery Projections

At Acclarent, the Johnson & Johnson subsidiary in Irvine, Calif., known for its balloon dilation systems, critical inventory has been moved to major distribution centers away from high-risk areas, and employees who can work from home are doing so, said Jeff Hopkins, Acclarent’s worldwide president.

Business is down considerably, but the company is continuing to provide essential medical products. “Supporting patients and our customers during tough times is our top priority,” Hopkins said. “About 90% of our procedures are deferrable, but 10% are urgent, and we’re still supplying customers as needed.”

The company is also staying prepared for the return to more normal times. “The majority of our global medical device manufacturing is running at or near normal capacity at this time to make sure that our products will be ready when patients return to their doctors for procedures,” he said.

The research and development side is pretty much the same, he said, thanks to its robust pipeline. “It spans over multiple years of development, so we have products in different phases,” said Hopkins. “Right now, we’ve been able to stay on track and continue the work that we’ve had on hand, and do regulatory filings, get regulatory clearances, and sustain our priorities.”

He added that although the near-term financial situation is challenging, the company expects a leveling off by the end of the year. “The second quarter is going to be tough,” he said. “We expect stabilization in the third quarter and a move toward normalization in the fourth quarter as healthcare systems work through addressing the pent-up demand.”

In its latest quarterly filing with the Securities and Exchange Commission, Johnson & Johnson strikes a fairly optimistic tone: “Considering recent market conditions and the ongoing COVID-19 crisis, the Company has re-evaluated its operating cash flows and liquidity profile and does not foresee any incremental significant risk.”

Johnson & Johnson points to many variables that could have an effect on the pace of the recovery. “You think about the overall economy, unemployment, people who may have lost insurance coverage, and then of course physicians and hospitals’ ability to get back to capacity,” said Kara Ryan, communications director with Johnson & Johnson. “There are a lot of factors that go into that, so it’s hard for us to say exactly what a recovery looks like.”

On a bright note, Hopkins said that the crisis has tightened the relationship among physicians, hospitals, healthcare corporations like his, and their employees.

“This crisis has brought us together with our employees, and we have worked more closely and more collaboratively with customers through this,” he said. “I think the silver lining is that COVID-19 has brought a unity between industry and healthcare providers to come up with safe solutions for all of us.”