{"id":12488,"date":"2017-09-12T11:00:17","date_gmt":"2017-09-12T15:00:17","guid":{"rendered":"http:\/\/circulatingnow.nlm.nih.gov\/?p=12488"},"modified":"2024-10-21T11:00:22","modified_gmt":"2024-10-21T15:00:22","slug":"tinkering-with-profitability-debakey-and-the-affordable-blood-transfusion-instrument","status":"publish","type":"post","link":"https:\/\/circulatingnow.nlm.nih.gov\/2017\/09\/12\/tinkering-with-profitability-debakey-and-the-affordable-blood-transfusion-instrument\/","title":{"rendered":"Tinkering with Profitability: DeBakey and the Affordable Blood Transfusion Instrument"},"content":{"rendered":"

By Heidi Morefield ~<\/em><\/p>\n

\"DeBakey
Michael DeBakey at home sewing a Dacron artificial artery, 1955
Profiles in Science<\/a>
Reproduced with permission of the Baylor College of Medicine Archives<\/em><\/figcaption><\/figure>\n

Dr. Michael E. DeBakey<\/a> was one of the most visible American surgeons of the late 20th century: he pioneered surgeries, published extensively, advised presidents, and tended to many celebrity patients. The hands-on and innovative approach he took to surgery extended beyond the operating theater\u2014ever since his early training under the direction of Dr. Ren\u00e9 Leriche he styled himself as a tinkerer as well. One of the lesser known of DeBakey\u2019s early prototypes\u2014a collaboration with Dr. George Lilly, a former colleague from the Tulane University School of Medicine, and Mr. Charles \u201cErnest\u201d Schmidt, a mechanical engineer and his former roommate at Tulane\u2014was a blood transfusion apparatus that the pair hoped to design as a new model of affordable medical technology.<\/p>\n

\"A<\/a>
George Lilly to Michael DeBakey, December 11, 1935. Box 5 Folder 34.<\/em><\/a><\/figcaption><\/figure>\n

\u201cAffordable\u201d in this case meant keeping the price below twenty dollars (still a fair amount of money in 1935) in order to achieve wide distribution. DeBakey wrote that he thought it was \u201cmost important to keep the price of the instrument as low as possible. In planning the instrument this was one of my primary objects. The other was to make it as simple as possible.\u201d<\/p>\n

\"A<\/a>
H. F. Baer to George Lilly, December 4, 1935. Box 5, Folder 34.<\/em><\/a><\/figcaption><\/figure>\n

Yet both of these goals were complicated by the transition to mass production for the market. At the outset, it seemed that the manufacturing company that they contracted with, the A.S. Aloe Company of St. Louis, Missouri, was in agreement with their target price range. In a letter, the company\u2019s president wrote that he was primarily concerned about sales volume and that keeping the retail price to \u201cconsiderably less than $25.00\u201d would be essential to make the device profitable. DeBakey\u2019s simple design played a key role in realizing this, as it kept manufacturing costs low.<\/p>\n

\"A <\/a>
Michael DeBakey to H.F. Baer, January 8, 1936. Page 1. Box 5, Folder 34. <\/div> <\/div> <\/div>
\"A <\/a>
Michael DeBakey to H.F. Baer, January 8, 1936. Page 2. Box 5, Folder 34. <\/div> <\/div> <\/div>
\"A <\/a>
Michael DeBakey to H.F. Baer, January 8, 1936. Page 3. Box 5, Folder 34. <\/div> <\/div> <\/div>
\"A <\/a>
Michael DeBakey to H.F. Baer, January 8, 1936. Page 4. Box 5, Folder 34. <\/div> <\/div> <\/div> <\/div> <\/div>\n

By the time the manufacturer had perfected the mass-market prototype and was ready to proceed with selling the instrument, however, the planned retail price had soared to $39.50\u2014nearly twice the original goal. Minor improvements, such as adding a cc. counter and a ratchet to prevent the handle from being turned the wrong way, had driven the manufacturing costs up considerably. At the same time, Aloe wanted to be sure that the device remained profitable even after their advertising and royalty costs were covered.<\/p>\n

Royalties also proved a particular sticking point for the three patent holders. After initially agreeing to a 10% royalty rate, Aloe informed Drs. DeBakey and Lilly that the best they could do would be to pay royalties on the basis of 10% of the manufacturing cost, which was just $22.50. The need for profitability prevented them from being able to offer royalties on the full retail price, which the company and inventors all agreed they absolutely had to keep below $40.00.<\/p>\n