Medical Electronics Overview Lei Mercado, Ph.D., PE, MBA Honeywell October 2009

1. Medical Electronics OverviewLei Mercado, Ph.D., PE, MBAHoneywell October 2009

2. Outline • Medical equipment / device overview • Major market trends • Important factors that could influence buying decisions • Some top needs / challenges and implications

3. Medical Devices / Equipment Market • $140B medical equipment market • Growing at mid-to-high single digit rates

4. Electronics Enable Medical Device Diagnostics/Therapy for the whole patient • Monitoring & diagnostics: Pressure & Glucose Sensors • Cardiac therapy – ICD/CRT • Diabetes therapy - Insulin Pumps • Neurological therapy – Stimulators and pumps for pain, Parkinson’s, Epilepsy • Spinal therapy – sensors • Gastro-Urology – GERD, UI • Obesity

5. Major Market Trends • Social: • Aging population and co-morbidities • Demand and interest in disease management and evidence-based medicine • Technological: • Continued automation, simplification, and miniaturization • Convergence of drugs, devices, diagnostics, biologics • Advances in creating and connecting databases • Economic: • Industry growth and profitability • Continued manufacturer consolidations • Increased cost of bringing new products to market • Political: • Greater regulatory scrutiny (pre- and post-launch) at federal and state levels • Increasing percentage of GDP spent on healthcare • Increasing pressure for cost-containment • Industry: • Market driven by quality indicators Source: MD&DI, January 2009 issue, A look into the future of medical devices

6. Electronic Components Used in Medical Devices / Equipment • Cables / Connectors • Capacitors • Electrodes • Electromagnetic Components: antennas, coils, transformers • Power supplies / Batteries • Resistors • RF and Microwave Components • Semiconductor components: ICs, IC packaging (memory, microcontrollers), Diodes, Transistors, PCB • Sensors / Transducers • Switches / Relays • Thermal Management Image Sources: Wikipedia

7. Important Factors to Consider • What does the medical device / equipment do? • Diagnostic • Disease treatment • Monitoring and disease management • Life sustaining • Where is the device / equipment used? • Implanted • Hospitals / OR / ER • Testing facilities • Clinics • Patients’ homes • Traveling • Who are you talking with? • Research scientists / Development engineers • Quality • Operations / Purchasing / SCM / Manufacturing engineers • Regulatory, clinical, legal, reimbursement

8. Component availability throughout product life cycle • Financial stability of the suppliers • No unplanned obsolescence • Cost pressure • Cost competitiveness • Recalls, MDRs, liability • Reduce medical errors / liability • Quality & reliability are essential • Increased automation • Device self diagnostics and records • Miniaturization • Increased battery longevity • Smaller size and higher integration • Reduced power consumption • Globalization • Global support & competitiveness • Data security and patient privacy • Freedom and mobility for patients • Encryption and data management • Wireless, data storage / processing Top Needs and Challenges Top Customer Needs/Challenges Implications