Masimo bets a million bucks its oximeters beat Covidien's

Masimo is wagering $1 million that its pulse oximeters are more accurate than Covidien's.--Courtesy of Masimo

Covidien ($COV) has racked up a few FDA clearances for its Nellcor oximeters over the past few weeks, saying its devices are the first motion-tolerant pulse readers with ISO certification. Competitor Masimo ($MASI), however, not only contends those claims are false, but the company is putting up a $1 million guarantee that its SET and Rainbow devices will outperform anything bearing the Covidien name.

Masimo is challenging hospitals to pit its technology against Covidien's, saying that if SET and Rainbow are proven not to be more accurate than Nellcor, it will fork over $1 million toward buying Covidien's devices. As you might expect, there's a host of rules and restrictions to the contest posted on Masimo's website.

Covidien's recent statements regarding Nellcor suggest the device is equivalent or superior to SET, but there's no such data to back that up, Masimo CEO Joe Kiani said. In a recent study of oximeter accuracy in motion, SET had 97% sensitivity and 95% specificity while the Nellcor N-600 had 57% sensitivity and 72% specificity, according to Masimo.

"All studies we are aware of show that the current Nellcor technology does not match the performance of Masimo SET technology during challenging motion conditions," Kiani said in a statement. "We hope this $1 million guarantee sends a clear message to clinicians, biomedical engineers, materials management and hospital administrators to look to the objective evidence when they are interested in improving pulse oximetry performance."

A Covidien spokeswoman said in an email that the company stands by its Nellcor products and their status as the only pulse oximeters cleared to screen newborns with critical congenital heart disease and the first to comply with the latest ISO standards for such devices.

Furthermore, "Covidien does not offer performance guarantee programs, unlike the competition, due to potential legal risks pursuant to existing federal and state fraud and abuse laws in the United States," the spokeswoman wrote.

While Masimo's gambit is more than a little theatrical, the company is touting more than 100 studies affirming its technology's efficacy in numerous clinical settings, and considering Covidien's market cap is about 25 times larger, Masimo is understandably quick on the defense.

In announcing the guarantee, Masimo trotted out high-placed doctors to speak to SET's effectiveness, including Kenneth Rothfield, chairman of anesthesiology at Saint Agnes Hospital in Baltimore, who said Masimo's motion-tolerant technology makes SET the ideal oximeter.

"When a patient's life hangs in the balance, a pulse oximeter that cannot measure despite motion and low perfusion is useless--and that can have dangerous consequences," Rothfield said in a statement. "That's one of the many reasons my hospital switched from Nellcor to Masimo SET."

- read the announcement

Editor's note: This story was updated to reflect comments from Covidien.

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