Edwards Lifesciences' CEO Presents at Citi 2013 Global Healthcare Conference (Transcript)

Feb.25.13 | About: Edwards Lifesciences (EW)

Edwards Lifesciences Corp (NYSE:EW)

Citi 2013 Global Healthcare Conference

February 25, 2013 8:45 am ET

Executives

Michael A. Mussallem - Chairman of the Board and Chief Executive Officer

Analysts

Amit Bhalla - Citigroup Inc, Research Division

Amit Bhalla - Citigroup Inc, Research Division

[Audio Gap]

A leadership position in critical care technologies. Mike has been the CEO of Edwards since 2000 and was Chairman of the Board of Directors of AdvaMed, the device industry's trade association from 2008 to 2010. Given his leadership roles throughout the industry, we're pleased to hear his perspective on value and health care and how Edwards' products address the changing health care landscape.

So Mike, we just heard Peter Orszag's perspective on the cost trends within the health care system, and I know that our conference theme of value and health care is something that you certainly have an opinion on. So why don't you take a few minutes to give us your thoughts?

Michael A. Mussallem

Yes, I'm happy to do a little bit of an overview here. As Amit pointed out, I had the honor to be chairman of our industry association. So I had a front row seat here during health care reform discussions, and I've had the chance to interact with Peter in the past. I find myself agreeing with him more today than I did probably back then. And I'm not sure whether he's changed more or I've changed more. I attribute it to his joining Citigroup, which has been -- I found his comments enlightening. I'm not sure I completely agree that it's the Affordable Care Act that has caused the downturn in health care spending today, but time will tell.

First of all, I'll be making some forward-looking statements and assumptions, and those obviously involve risks. And those are on our website and filed with the SEC, and I encourage you to refer to those, if you care to.

So our belief is that innovation will continue to create compelling value propositions, and I come at it from a few different angles. First is the patient's perspective. As great as health care is today and as dramatically improved as it is from 50 years ago or 10 years ago, it's not nearly as good as it can be. And it's going to continue to improve. The technology that's available today to influence patients' lives continues to grow, and patients are going to expect that their needs that are not well met today continue to be served.

Clinicians, traditionally the gatekeepers, really value these improved outcomes, and they're going to welcome innovation that allows them to treat their patients better. Payers, though, which is really the essence of this thing that we're talking about today, really value evidence-based innovation, like show us the evidence, show us the clinical benefits, show us the favorable economics, show us that it really improves quality of life.

And so my belief is that we're going to expect much more balance in the future. So in the past, it was the clinician's voice that was the loudest voice when decisions were made regarding innovation. Today, the payer, just with all the pressure that exists in health care, is having a much more profound voice. And they're crowding their way into this conversation, and that's appropriate because we really do have spending growing at an inappropriate level. The voice probably that's still in the background, that's yet to be heard from in a large way, are the patients. And I think that one is just going to grow and become more persistent over time.

Now broadly, with all this pressure on health care spending, gee, is demand for innovation, really good innovations, ones that extend or improve lives, is that going to shrink just because of all the pressure in spending? My belief is absolutely not. There are some fundamental drivers that we could detail with a bunch of slides and I'm not -- the growing global GDP, nations are getting wealthier, and this is happening across the board. There's a fact that occurs. It's happened over history that when nations get wealthier, they spend more on the health care of their people because people expect that.

Aging population is a dramatic impact and people are going to demand more health care as they age. And just the increasing demands of patients. Patients are now better educated than ever before, and they're going to expect to have available to them the latest health care. And so I believe that those growing trends are going to increase the demands of those really good innovations.

Now finally, just the Edwards position. Our long-term growth is really fueled by innovation. We have an innovation-driven strategy. We're not standing still. We're focusing on and believe the greatest way that we add value is to change the way that medicine is practiced in a very favorable way, and we put all of our energy into doing that. Now you say, "Gee, that sounds kind of risky, that's not so easy to do." And that's true. But what we do is to stay very focused on what we know and what we're good at. We're fortunate to be the global leader in structural heart disease and critical care technology. So we -- over 95% of our products are in #1 global position.

So we understand those spaces, and we think we understand the unmet needs. What we do is rather than diversify when we have success, we focus even more, and we drill deeper into improving the care in these narrow spaces that we think we understand. And we think that improves our odds of having our innovations be successful.

We've been aggressively investing in R&D for some time. We're spending about 15% of our sales in R&D and been doing that. And we have a robust pipeline as a result of that, and we have the financial wherewithal to be able to back this strategy up and really make it go.

So I'll stop right there, and let's just jump into maybe some of the things that are most interesting to you, Amit.

Question-and-Answer Session

Amit Bhalla - Citigroup Inc, Research Division

Sure. Let's -- and before we jump into some of the products and the Edwards-specific value proposition, let's come back to the overall goal that we're talking about in value in health care. Innovation is clearly a key component of the Edwards strategy. Can you put this into the context of what we just heard? Bundled payments, targeted reduced costs through the Affordable Care Act, are these opposite goals? How do you assess this?

Michael A. Mussallem

Yes, I think it's a really important point. We constantly hear value, value, value. And what is value? It's getting the most quality for the price. I get concerned some time that quality gets left out of this discussion because it's kind of hard to measure and we don't do a very good job of measuring quality. It's easier to just talk about costs. And it feels like when people talk value, they talk costs, but really it's the total equation. And even though that might result in short term sort of picking the low-hanging fruit, which is to just do what you can with prices, especially anything that's in the commodity category, I think the broader point is how do you drive that great quality at lower cost. In the old world, it was easy to focus, but especially for companies like ours, to focus on a product-specific basis. But specifically, products are a low percentage of the spend. It's really not what it's about. It's about this total cost of care for these patients. And so the idea when you start bundling, which is I think very bright policy to say, "let's take a look at that patient's experience over a broader period of time," not just the specific product, but maybe that whole procedure they go through or even more importantly, maybe their entire hospital stay. And hospital stays are a big component of health care spend, and if you can optimize that, now you've really done something from a cost perspective. And so what that does is it flips back onto providers like us the opportunity to say, "Can we make that experience better? Can our products translate to a better procedure? Can we participate in a better procedure that has better outcomes, higher quality?" And if we do that, then we ring the bell. And so it changes the whole focus. And one of the things that becomes very clear is you're not going to just do it with arm waving in the future. You're not going to do it with a feature and benefit sell. You're going to need to back it up with evidence. Payers that are going to sign up to pay the bill for new innovations are going to want to see the evidence that says, "Now look, this new way of performing health care really is cost effective, really does increase the quality of life for these patients, really does extend life." And so the onus is on us to show up with that evidence, which obviously takes up the cost of innovating because it takes longer and you spend much more than you ever did before developing that evidence. But that's probably the price of admission.

Amit Bhalla - Citigroup Inc, Research Division

So move -- continue on this theme of evidence. You guys ran the PARTNER Trial to get the approval for the SAPIEN Transcatheter Heart Valve. It had -- it showed dramatic reductions in mortality, a big winner in health care in our view. But then when you went to roll out the product in the U.S. and Europe, there's clearly more discussions that you had to have with hospitals and payers. Take us through what were some of the unintended hurdles you faced, even though you did generate a lot of this evidence that's necessary?

Michael A. Mussallem

Yes, thanks, Amit. Yes, we went through quite a process, and we've tried to be extremely transparent with our data and we generated a lot of clinical evidence, first in Europe and then in the U.S. And as you say, this PARTNER Trial, we actually had randomized trial, which normally doesn't happen in something like heart surgery, where we actually had patients come in and based on a flip of the coin, they either got the new technology or just best medical management, or the new technology which was very minimally invasive replacement of a heart valve versus open heart surgery. And this was great science, very tough on these patients that went through all this. In the course of doing it, we learned an awful lot. There've never been randomized trials really in things like heart valve replacement. So as that evidence starts accumulating, there's -- how the practice of medicine changes is a strange and wonderful thing. And it happens at different paces. It happens at different paces in different countries based on specific dynamics. And so in Europe, the first opportunities where people just decided that they were going to start shifting their budgets over from other parts of the hospital to cover it. And ultimately, formal reimbursement went into place in several countries in Europe, and the biggest countries in Europe all reimburse it. There's still some countries in Europe that don't reimburse it. In the U.S., there's a bit more formality to the process. There's the, obviously, the FDA approval track and which is an arduous one and the FDA approval trailed Europe by 4 to 5 years, depending on how you count it. But there's also the track -- because of the patients that we're treating in the early stage of this technology, the patients are an elderly population, and that was the way that the regulators kind of pushed this. It was the safe way to introduce this technology, to first introduce it on these -- for the people that had little options. They tend to be a Medicare population. So CMS's decisions on how they handle it become very important. So long story short, we work through the FDA process and that turned out very favorably, and we got the label indications that were supported by the clinical trial. CMS did something that was relatively unprecedented, which is actually open a National Coverage Determination even before the product was approved. And they really wanted to get ahead of this because they wanted it to be handled appropriately. And so that introduced lots of questions and when it was all done, we thought what they did was a pretty fair and balanced approach. It was -- it's relatively detailed, and it did a few things that were uncommon, which is to encourage a heart team rather than individuals and we've been big proponents. We really drove the whole program is something that should be done by a team to avoid specialty price and really make this about the patient, not about the specialists that actually do the procedure. They also had very specific requirements about experience. This is serious stuff replacing heart valves. And so let's make sure that clinicians that are doing this are qualified and there were very specific hurdles. And so -- and finally, there was some flexibility built into the policies such that the policy wouldn't have to be reopened every time there was a new FDA indication. If there were clinical studies that indicated there was a new group of patients, they were qualified, they would automatically be covered. Net-net, we thought was pretty good. The interpretation of this, when it really comes down to being paid, is more complex than you might imagine because the policy gets implemented by regional providers. They all do their own interpretation, exactly what some of the details mean get shaken out over time. And so that whole process, although it is one that leads to interpretation and some bumps and I'll call it just sort of growing pain, I think overall has gone pretty well and been pretty consistent, we think, with a nice U.S. launch. What we stayed focused on was trying to make sure that every procedure was a great one, and that was our #1 concern. We didn't focus on almost anything else than just let's make sure every time a patient comes in that they get a great result. And I'm so pleased that across the United States, we've got more than 200 hospitals engaged at this point. The procedural success rate has just been extraordinary. So we're very pleased with where we are, but it naturally leads itself. It's leading to a lot of success but right now, it's kind of lumpy in terms of the way it gets implemented.

Amit Bhalla - Citigroup Inc, Research Division

Well, let's talk a little bit about Europe. Europe was the part of the world that had the SAPIEN valve first. And like you said, some countries have adopted it wholeheartedly, and growth rates have been pretty strong. But other countries have been a tougher slog, U.K, France. How are those discussions with those countries changing now that the product's been on the market, you've really been working hard to make sure they understand the value proposition? When does that switch turn for those countries that have been slower to adopt?

Michael A. Mussallem

Yes, for the most part, the adoption in Europe has been terrific. And the biggest countries actually, Germany and France included for that matter, as well as Italy although that's a separate discussion and I'll come back to, has been rapid. And even -- this is 5 years plus in, Germany is still growing well in the double digits or closer to a 20% growth rate with adequate reimbursement. So the value dossiers that support the use of the technology are strong. And I think at this point, the discussion with the countries probably not so much about the value dossiers, it's probably more about their economic condition. So for example, in the south of Europe, countries like Greece, it was dramatic; but even in Spain and Italy, we saw a pullback on spending on this new technology towards the second half of last year. I think this is purely a byproduct of just economic pressure, not one that was necessarily implemented in a surgical fashion, but one that was sort of done with a blunt object [ph], hospitals actually closing a few days per week or just running out of budgets and say we just need to stop. So those things happen along the way. I don't think those are long term in terms of their nature, and I think decision-making over time becomes more logical. And we'll have more discretion, more triaging, if you will, of what procedures get paid for. But overall, I think we're making progress. Just some countries have their own procedures that just take longer. U.K. is a classic example of that.

Amit Bhalla - Citigroup Inc, Research Division

And you are moving forward with next-generation valves. XT is already in the market in Europe and SAPIEN 3 is coming. How do you assess the market size in Europe for the next-generation of valves for transcatheter?

Michael A. Mussallem

Yes, I think that the demand in Europe just continues to grow. As you pointed out, we've got next-generations of products. The XT valve has been in Europe for 3 years now. We've got a next-generation product called SAPIEN 3, which we think is just fantastic from a patient's perspective; far smaller; it's got a potential leak solution. And we think demand just continues to increase. More and more patients are going to become aware of the fact that aortic stenosis, although it affects maybe 3% of the population, is the reason that they feel like they're getting old, and not just that they are getting old and they can do something about it that dramatically impacts their life. And as they do, they'll find a way into the system. And we expect Europe, the market in Europe, to continue to grow. I don't know about the long term but certainly, we expect 10% this year. And so this is -- this will be the sixth year in for this technology. And we think that's going to go on for a while. And as interesting as Europe is, the technology still is really in its infancy across Asia, across Latin America. So those are just at the front end of their adoption curve.

Amit Bhalla - Citigroup Inc, Research Division

So bringing this to a point on competition, as you look forward over the next 5 years or so, can you tell us your thoughts on how you think the value proposition and pricing dynamics for TAVI are going to change as more players enter the European market, but as well as the U.S. market?

Michael A. Mussallem

Yes, this is -- I think this is going to be a competitive space. We've demonstrated with some strong evidence that this is good technology. And so obviously, it's attracting competitors. It's not trivial. This isn't the kind of thing where a small company with a few guys in a garage can create a transcatheter heart valve. It takes a real sustained commitment over a period of years with some really bright folks to do it. But there are people that are teed-up, and are coming along. We believe that this is going to be more of a technology race than anything else in the future. What physicians will gravitate to are best technologies, best products. And we think that they'll be willing to switch based on that, even though we're going to try and behave responsibly and have great data, if we don't have the best products in the future, we don't think we win. In our case, though, we have been aggressive investors at pushing the state-of-the-art, and we believe that we have the best technology teed-up in the future and we're kind of looking forward to it. Many of our competitors probably would've looked at our first products, the SAPIEN products, that will soon be retired hopefully as soon as -- as soon as FDA approves SAPIEN XT, we'll stop making SAPIEN. It's just relatively old technology that has shortcomings. But if that were the competitive hurdle that people were looking at or competitors were looking at when they started their program a few years ago, the bar will have moved several steps since then. And so we're fortunate because of our leadership to be aggressive investors. We just spend much more. We have the opportunity to be in every one of these cases, and so we learn a lot about where the opportunities for improvement are. So we have every opportunity to make sure that we're out in the front.

Amit Bhalla - Citigroup Inc, Research Division

And how do you balance the pricing discussion for your products in the wake of bundled payments and downward pressure for health care costs?

Michael A. Mussallem

Yes, we feel very comfortable with the pricing on our product. As you say, people are going to think about the total cost of treating these patients and total cost of care. We've done some very substantial cost-effectiveness studies. We actually built them into the PARTNER Trial, so actually randomized studies that said that this technology is cost-effective. As a matter of fact, if you were to compare it to other cardiovascular technologies, it's quite cost effective and even more cost effective than some things like dialysis or -- that are broadly practiced today. And so we like where we are from a value perspective. But as exciting as that is, the opportunity for that to improve in the future because you can shorten length of stays and get far more efficiency in these procedures, are substantial. As I mentioned earlier, all of our emphasis was on great procedures. We didn't worry very much about how much it costs, and so we'd have a room full of people that would be typical in a transcatheter case in the past. I think over time, that gets -- starts getting rationalized as the people who do these procedures get comfortable and they take their quality up. So we sort of like the path of this, and we think that people are going to pay for the quality. If they have a procedure that will reduce complications, reduce total costs, it's worth to take it in devise cost because you'll get it from a total bundle perspective and actually, that's where the bundle kind of works for you as opposed to against you, because the broader the bundle -- and we actually wish the people would look at the bundle, instead of just 30 days, we wish they'd look at it for 1 year or 5 years or 20 years because that's when the true value of the technology gets understood.

Amit Bhalla - Citigroup Inc, Research Division

Got it. So essentially, what you're saying is you're very comfortable with the pricing outlook for the product globally going forward.

Michael A. Mussallem

We are.

Amit Bhalla - Citigroup Inc, Research Division

So you brought up the cost-effectiveness studies you did that were embedded within the PARTNER Trial, and there was actually 2 parts to it. You had one part of the cost effectiveness on Cohort B that was wildly positive, and Cohort A was a little bit trickier because you had physicians using it very early in their adoption curve -- adoption cycle. Take us through the balance of those cost-effectiveness studies and how they helped you or hurt you in the U.S. discussion.

Michael A. Mussallem

Sure. So one of the things about this transcatheter technology, and we haven't really talked about it very much, but it's replacing a heart valve without open heart surgery and we're able to do it with a catheter-based approach. There are 2 primary delivery mechanisms. One is through the femoral artery. And so you come through the femoral artery up the aorta and over the aortic valve. And the other is actually between the ribs and right up through the apex of the heart. So with the transfemoral delivery, the cost effectiveness was demonstrated, and it was demonstrated more cost effective than surgery even with the cost of a $30,000 system in there. And the big difference was surgery had a 16-day length of stay that was in this trial. And the catheter-based approach had a 10-day length of stay. When you switch that to the approach where we went between the ribs, there wasn't much difference between length of stay. One was, I think, 16 days, and one was 15 days. And so the cost of the valve made it not very attractive. The great news about that is it is a great data set. The bad news about it, that was the earliest experience. And these kind of length of stays, for example, 10-day length of stay for these patients with transcatheter heart valves is kind of ancient history right now. Most hospitals are doing or performing half that length of stay or less. And so transcatheter technology is moving quite a bit, although surgery is kind of what it is. It's been carefully refined over 50 years and so probably not a lot of opportunity to influence length of stay. I think it will be interesting because all these numbers will be refreshed to say, "Well how does the cost effectiveness look now that we're not just in the first 100 patients or the first 500 patients but in the first 1,000 patients?" And I think over time, you're going to see more data. It will become more apparent in terms of where the cost opportunities are. It's led people overall, not just for cost-effectiveness reasons but also just for clinical reasons, to probably gravitate towards a transfemoral-first approach, where the first choice, if I could do it, would be to introduce it through the femoral valves, because if you do that, it's much less invasive for the patient, and the recovery time is much faster. Between the ribs, although it's better than sawing open the chest and so forth, it's still surgery and has the morbidity that's associated with that.

Amit Bhalla - Citigroup Inc, Research Division

So if you have any questions in the audience, just raise your hand and we'll make sure you get a mic to you. And as people are thinking about questions out in the audience, I want to come back to the TA approach for a second. As you say, TF will be a greater portion of procedures in the U.S. We completely agree. But the past quarter, with the approval of TA, you saw a big upshot in adoption. Take us through that part. Is that just a blip on the curve? Was there pent-up demand that was just waiting on the sidelines there and that should quickly tail off?

Michael A. Mussallem

Yes, one of the things that's kind of interesting and at least in my observation, about the way the market has evolved, I know obviously the observers here are taking snapshots of each little point in time what happened this quarter or what happened this month and try and project how big this opportunity is in the future, and that's kind of tricky business. Just to provide a broader perspective, the SAPIEN valve that's approved in the U.S. is, really, our first-generation technology, and it's a 24 French system. So that's a very large introducer to be able to get into a femoral artery. And it actually doesn't go into the femoral artery in most people, and it takes a tremendous amount of care, and that's the biggest complication that goes along with it. Especially for this elderly population, what that's meant is that many people really require that transapical delivery just between the ribs. And so we think that part of what's driving this demand for transapical were 2 things; One is transapical didn't get approved until almost 1 year after transfemoral. And so people that couldn't get this catheter delivered through the femoral artery were kind of teed-up in hospitals. Many didn't live long enough, but those that did were in urgent condition. And so right upon approval, we had more than 100 hospitals came in and immediately wanted to be trained. They got trained. They went back home and on sort of a triage basis, they did these transapical procedures. And so when people look at the percentage of transapical that was done in the fourth quarter, it's probably disproportionate to what will be done on a long-term basis just because there was this pent-up demand. But you also have transapical probably tracking at a higher rate in the U.S. because of the safety in technology. If you look at what transapical and these other methods for delivery are in Europe where we have the new smaller system, the SAPIEN XT, the transapical approach has diminished in its importance.

Amit Bhalla - Citigroup Inc, Research Division

Got it. Okay. So let's spend a minute on emerging markets. You mentioned it earlier in the discussion that this is clearly an opportunity for you. Take us through how you're planning on approaching emerging markets. And will prices be different? Will your training efforts be different? Do you need to have additional investment through the company?

Michael A. Mussallem

Yes, emerging markets are interesting. You hear a lot of medical technology companies talking about moving toward emerging markets because obviously, you have health care systems that are growing much faster than the systems are growing in the U.S. and Europe and Japan. And maybe one of the differences with Edwards, we actually think that we could have high growth rates in the developed markets because we're going to bring innovations that really matter to those markets. And so we'll actually experience more growth in the developed markets than in emerging. Now having said that, there's tremendous demand in emerging markets. It -- there's a couple of ways to look at it. You could, if you've got this higher-end technology which Edwards tends to have, you could simply try and serve the private component of those markets. And that's actually getting quite large in places like China and India. There's components of those markets where people will pay whatever it takes to be able to get the best technology. Then you also talk about getting into the public system. When you get into the public system, their ability to spend is very low. You're talking about in some cases hundreds or maybe $1,000 or $2,000 per capita in these countries. And so you're not able to deliver very much medical technology. So we take a very thoughtful approach. We tend to be focused more on the private pay component of these markets. We -- there's a process to work through in terms of approvals both the regulatory approvals and also the payment approvals, and we work through those. Those are deliberate processes because they obviously have those constraints. But overall, when you put it all together, we expect emerging markets to be a fast grower for our company and probably in the 20% growth range.

Amit Bhalla - Citigroup Inc, Research Division

Is the infrastructure already there at Edwards to serve that market?

Michael A. Mussallem

Yes, we're very global guys. We have -- there's well over half of our sales come from outside of the U.S., and we've been in emerging markets forever. We are direct in almost all these places. For example, in a place like China, we are increasing our staff. Places like Latin America, India, we're doing that as well. It's not very expensive to, frankly, do that if the market exists. And so building the infrastructure is one that you're always thoughtful and careful about to make sure that you have your culture in place, but the expenses associated with it are really not onerous.

Amit Bhalla - Citigroup Inc, Research Division

Got it. Any questions in the audience? Let's switch over to INTUITY. Now this is minimally invasive heart valve replacement technology you have. It fits in between your traditional surgical valve and transcatheter valves. Take us through the cost benefit debates for this technology and how important you think this is going to be for the market?

Michael A. Mussallem

Sure. Maybe just to take a step back for people that may not be very familiar with this. The traditional replacement of a heart valve would be that you stop the patient's heart and open their chest, cut open the heart, cut out a diseased heart valves, sew in a new one, all this time their circulation is being supported by a heart-lung machine, that would go on for a period of hours. And then sew in the new heart valve and put you all back together. And that's turn out to be miraculous therapy for these patients. But that is a big procedure, and it's really a shot to your quality of life for the recovery period. In some cases, patients don't recover well. So the opportunity with INTUITY is to -- well, let me add one more thing. So with transcatheter heart valves, why wouldn't you do in everybody with a transcatheter heart valve? Well, the idea that you're able to squeeze down this heart valve onto a catheter and open it back up, you don't know for a fact that you're going to have the durability with that valve that you've had with a surgical heart valve that doesn't gets squeezed down and opened back up. We actually have a lot of history, and we have patients that are great for 20 years after a heart valve procedure. And so this means for people that are healthy enough to go through heart valve replacement, the obvious choice would be to go to this tried-and-true valve that offers this known durability. So how do you get the known durability but get some of this quick deployment? That's what INTUITY does. It basically takes some of what we learned on transcatheter heart valve and puts a skirt, if you will, on the valve such that rather than going through the dozens and dozens of sutures to place a valve, which just extends the bypass time, extends the procedure and we think impacts your length of stay and your morbidity, that you have a quick deployment valve. So you haven't squeezed the valve. But through a relatively small hole, you can place the INTUITY system, deploy it very quickly, maybe cut your time in half and have a very durable solution for patient based on proven technology. That's the promise. And so the market, if you will, for surgical heart valve, which is a pretty substantial one, has an opportunity to be much better from a patient perspective because you can have this quick-deploy option.

Amit Bhalla - Citigroup Inc, Research Division

What's the challenge behind this technology?

Michael A. Mussallem

We think the challenge -- we think the technology is going to work pretty well. All of our early clinical trials look good. To make it work, it's going to be at a higher price point. It's going to be maybe at 3x or 2x the price of a traditional heart valve. And we feel like we need to back it up with what are the true cost savings that are associated with it. And so we're not actually doing our typical launch. This is where we sort of like this idea of bundled payment. Let's take a look at this total length of stay and how much money gets spent on these patients if it's done by the traditional approach versus the new approach and do a comparison of cost and quality for these patients. And we think it turns out well for us. So actually, we're spending our first 1.5 years in Europe here just collecting all this cost-effectiveness data that does a couple of things for us. One is it just makes the case; the other, it also helps us with a value dossier that we can take to the reimbursers in Europe so that we can get the price that we think would be appropriate for this product.

Amit Bhalla - Citigroup Inc, Research Division

And when do you think that you show some of that data, that cost-effectiveness data to the market?

Michael A. Mussallem

Yes, that data is being continuously generated. I'm sure that there will be some early looks at that even yet this year. But I think by early next year, January, February next year, there will be some completed studies that should be a pretty interesting look at how that really shapes up.

Amit Bhalla - Citigroup Inc, Research Division

Got it. I want to make sure we also talk about the diabetes program. GlucoClear was recently CE marked. This seems to be a nice example of how you can spend money in the short term and save money in the long term. Take us through -- maybe go through the product, what it is and how it competes with others that have been existing in the market?

Michael A. Mussallem

Sure. Many clinicians would say, and we're certainly believers in this, that there's almost another vital sign that doesn't get checked very often and that is the level of glucose in the blood, the amount of blood sugar that you have. And we know the big burden that the diabetic population has on the population. There's a lot of energy around treating that, but that's primarily outside the hospital. But inside the hospital, what's known is that when glucose levels get very high, that recovery periods get very long. You become far more susceptible to infection. And so if you could keep those levels low and moderate at normal levels, you could speed recovery. The way you knock the level down is to add insulin. If you overdo that and you go into a hypoglycemic state, it's very dangerous for the patient. And being able to control the normal levels has been something that's difficult to do. The way you measure glucose now is actually through a finger stick and to put it on a strip and measure it. And that's time-consuming, it's tough on the patients, it's tough on the nursing staff. So the idea, if you could have an accurate sensor that in real time could trend and could give you the real glucose level and you could use that during an important surgery or during an ICU stay, that you'd add a lot of value because you could treat these patients better and shorten their recovery period. It's been very difficult to do. Glucose sensors, they either follow [ph] or they get confused by the drugs, and so it's been technically different. We think we finally cracked the code on it, and we think we have a sensor that's very accurate under a broad range of conditions. We need to fully prove that. We have a commercial system that's been approved, and we're going to be in the marketplace this year. And if it measures up the way, we think it's going to be a very valuable tool for clinicians.

Amit Bhalla - Citigroup Inc, Research Division

Okay. And then -- so just to close here, I mean, with all this discussion on evidence and value, the ACC conference is coming up in just a few weeks. What are the big highlights for Edwards that we're going to see at that conference?

Michael A. Mussallem

Yes, there's a couple of things. Probably most noteworthy is all this data that's been generated over time has a natural opportunity to be updated. So we'll see longer-term data on how these transcatheter heart valve patients are doing, and how do they compare 3 years out compared to those patients that went through surgery or just got medical management. And so that accumulation of data, I think, will be telling it in our view. We think the technology just keeps getting better and better, and we think it holds up well under the bright spotlight of data. And so I think that'll be most important to look at. Also, ACC is going to be launching a campaign to help educate cardiologists and primary care physicians about aortic stenosis. In their early surveying, they really found that even clinicians didn't understand it very well, probably misdiagnosed it in many cases. And the same people that started the door-to-balloon campaign within ACC, which is quite a successful one, you folks will recall this was to shorten this period from the time somebody hits the door of a hospital until they get ballooned, and the dramatic impact you could have on mortality and morbidity are going to go after trying to spotlight on aortic stenosis. So I think that will be revealed as well.

Amit Bhalla - Citigroup Inc, Research Division

Great. Well, with that, Michael, I want to say thanks again for joining us at the conference, and we'll stop there.

Michael A. Mussallem

Thanks, Amit.

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