Josh Makower warns of ‘biggest challenge’ to medtech innovation

“It’s getting worse, not better,” the Stanford Biodesign co-founder and director said in an interview.

Josh Makower is the Yock Family Professor of Medicine and Bioengineering at Stanford University School of Medicine and School of Engineering, as well as director and co-founder of the Stanford Mussallem Center for Biodesign. [Photo courtesy of Stanford Biodesign]

Reimbursement now represents the largest source of downstream risk.

For emerging medtechs without clear coding or coverage pathways, delays can persist long after regulatory clearance, with Stanford Biodesign’s Josh Makower cautioning that without a payment framework in place, adoption may be slow and uncertain: “It’s going to be a while.”

During a keynote interview at our DeviceTalks West 2025 conference, Makower expressed concern that the current reimbursement landscape is “throttling” medtech innovation.

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Makower, who is the Yock Family Professor of Medicine and Bioengineering at Stanford University School of Medicine and School of Engineering, as well as director and co-founder of the Stanford Mussallem Center for Biodesign, also offered his perspective on FDA and regulatory predictability, as well as on how the current investment climate is shaping the path from approval to adoption for medical technologies.

Reimbursement, coding, and coverage realities

The problem is not theoretical. Data generated by Makower’s team at Stanford, led by Sandy Ruggles, showed that the average time for breakthrough medical technology to move from FDA clearance or approval to even nominal coverage in the U.S. is 5.7 years.

“That is too long. That is a call to action. We need to fix it,” Makower said.

Even devices that clear the FDA with strong clinical evidence may not become commercially available before venture capital funding runs out.

“VCs have, in most of their arrangements, a 10-year life …  and if it really is a 5.7-year average, which we believe it is, it could break the venture model.”

One of the biggest contributors to that delay is the lack of clear coverage standards.

“There is no definition for widespread use. I mean, literally, no definition. It’s in the eye of the beholder,” said Makower.

That ambiguity is a problem and can create a no-win loop. Payors hesitate to cover new technologies because they’re not widely used, creating adoption issues for providers due to uncertain coverage.

“If everybody takes that position, nothing new is ever going to get covered.”

Still, there are some encouraging signs.

“Historically, if you went for a [current procedural terminology, of CPT code] I and … you lost that battle, they’d push you, whether you liked it or not, into Category III. And that could be a place where you would live for five years before you could get out of it.”

Recent changes at the American Medical Association have reduced that risk.

“They have now taken that out…  if you don’t want to [go Category III], you will not be forced to take it, which is a huge win,” said Makower.

Makower also noted, “One of the first wins we got was to allow innovators to use foreign data in support of their CPT I application.”

This shift could reduce duplicate trials and help with capital requirements, especially for medtechs running early feasibility studies outside of the U.S.

On CPT codes, Makower left us with this thought: “For all CPT codes, over time, the payment goes down. Many innovators …  don’t adopt a new code for a new technology because they’re afraid they’re going to lose the code and lose payment on the existing technologies. Our data is showing you’re going to lose those payments anyway over time.

“So if you really want to protect your specialty, embrace innovation, get new codes that bring new, higher payments, and you’ll be able to preserve the overall income for the physicians in your specialty rather than the reverse. … That encourages innovation and, as a result, brings value and dollars.”

FDA and regulatory predictability

It’s not all bad news on the FDA and regulatory front. The agency is under pressure but still mission-driven, he said. The FDA is structurally intact, and its leadership remains under Center for Devices and Radiological Health Director Dr. Michelle Tarver, in the face of a volatile policy environment.

“Thus far, medtech has been very modestly impacted,” said Makower. “Michelle Tarver’s doing a great job, and her team is pretty much intact. On balance, the majority of people are getting a great service from the FDA. They are doing their jobs well, and meeting their timelines per MDUFA,” referring to the Medical Device User Fee Amendments agreements for FDA funding from device submissions.

But regulatory success is not just about timelines, it’s about predictability. And for device makers, predictability matters more than speed. Even when timelines are met, Makower said, changes in expectations mid-process can be destabilizing for emerging medtechs. He also shared concern with how applications are being reviewed.

“It has to do with consistency, reviewer-to-reviewer, and developing an overall quality approach towards the way that they manage reviews,” he said. “It doesn’t matter who you get. They will always give you the same level of service.”

When asked if artificial intelligence could help, Makower said yes.

“There [are] a lot of qualifiers …  but the truth is that reviewers have to digest a ton of information, and AI is pretty good about digesting a ton of information. If it’s trained on a solid basis and has reviewer oversight — or some knowledgeable person’s oversight — then it could really facilitate and move things along.

“It could also be bad because if it winds up being less people and less oversight, and you’re dealing with a robot telling you your application’s not approved or whatever, who do you appeal to? Those things need to be worked out,” he continued. “But the use of technology to create greater efficiencies would be potentially a good outcome.”

Reflecting on the current state of the FDA, Makower reminded us, “They’re not the enemy. They’re trying to protect citizens and patients and if we can align on some reasonable and predictable processes around whatever application, that’s the goal.”

Current investment climate

Though the investment climate goes through cycles, one truth never wavers: identifying unmet clinical and system needs is a must. This is the only durable foundation upon which to build a successful medical technology.

“The No. 1 thing is you really need to make sure you’re solving the right problem and that you’re really tuned into the need,” said Makower. “That sounds simple, but there still is a lot of technology in search of application… if you’re not solving the real problem, then you’re going to have challenges downstream.”

However, it isn’t just about seeking the best clinical outcomes. We must design with reimbursement and cost-efficiencies in mind from day one. After all, medtech is still a business.

“’Let’s get a better clinical outcome at any cost’ doesn’t play anymore,” said Makower. “We need to think about the cost-effectiveness as we conceive of the problems that we’re trying to solve.”

Capital still exists, but the investment climate is becoming more restrained.

“We are seeing a real lack of early- and mid-stage VCs these days. As these funds have grown in assets, they have moved to later-stage, and now you’re seeing total pile on, so it’s either feast or famine.”

As a result, emerging medical device companies are being forced to accept new funding models.

“A lot of people think that there’s going to be a lot more build-to-buys with bigger companies. I think that’s probably true,” said Makower. “Partnering with corporations to do those could be a nice early model, but it’s tough out there for founders and early-stage companies.”

Makower reinforced the real problem: without earlier paths to revenue, fewer investors are willing to engage early.

“The real focus is ‘How do we improve reimbursement?’ Because if we can shorten the time to getting these companies more accretively commercial, then we’ll enhance the market for venture capital early-stage. And people will start going earlier because they can realize they can exit earlier.”

With these fundamental challenges facing medtech, Makower offered advice to innovators.

“You just have to be perseverant and believe in yourself, believe in your technology, believe in the clinical data and just use the clinical data as your shield,” he said. “If you have good clinical data, you will win.”

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