The 30 largest medtech companies by market cap with multiple franchises contributing at least 20 percent of sales, as of April 2022. Divestiture in medtech: Are you the natural owner of your businesses? The FDA has largely embraced artificial intelligence. In our last milkman study, we analyzed how companies can generate shareholder value by transforming their commercial models. Glenn leads Deloitte LLP's Medical Technology practice with more than 25 years of experience in medical technology, biotech, and specialty pharmaceuticals. NuVasive improved spine surgery by developing the products and tools to enablenew, less invasive surgical approachesthat reduce operating time by up to 15%, improve overall case efficiency by 20% and lead to 50% shorter hospital stays for patients. Today, a growing number of medtech companies are creating a slew of devices to track metrics ranging from physical activity to womens health. Daphne Allen | Apr 27, 2018. This article is part of Bain's report US Healthcare Trends 2020: Insights from the Front Line . While the financial crisis of 2007 and 2008 was a heavy blow to medtech and many other industries, the following decade witnessed a medtech resurgence due to strong fundamentals and investors' high confidence in the sector (see Figure 1). Today, thanks largely to COVID-19, that number has grown to 46%. And, counterintuitively, more-advanced products and solutions tend to be easier to sell remotely. This research took place three years before the pandemic began, and, even then, hospital stakeholders were surprisingly open to digitally enabled, virtual-engagement models in the form of self-service portals and remote selling. Required fields are marked with an asterisk(*). Solve 100% of a specific problem. Those that fall short of that goal will likely face difficulty in gaining market traction. Article How medtech companies can create value with new-business building Define the problem(s) you are solving and identify the partners who can help solve them. Companies can use an end-to-end, digitally enabled omnichannel approach to help customers discover and successfully use their products and solutions. Because commercial teams were forced to find new ways to interact remotely with their customers, they saw the potential in building a next-generation, omnichannel commercial model. COVID-19 caused massive changes in consumer behavior. Here are the top MedTech digital trends that can't be ignored in 2021, from our Veeva industry experts. 5 medtech trends to expect in 2023 - Today's Medical Developments Executive leadership hub - Whats important to the C-suite? Boston Consulting Group is an Equal Opportunity Employer. Some surgical tool manufacturers are even more advanced, aiming to create fully digital operatingsuites in which all of the tools are connected within the care setting. This increase was fueled by Asia-Pacific transactions, which accounted for 45% of global deals, the largest share, as investors targeted local manufacturers. Medtech and Pharma Sales Go Virtual | Bain & Company With high barriers to entry, sophisticated technology innovations, and substantial clinical and nonclinical unmet needs to address, the industry looks set for a future of profitable growth. This allows a company to test and learn as well as generate measurable top-line impact right from the beginning. So we can expect to see even more medtech innovation in 2023 and beyond. A build-operate-transfer partnership with external experts can be an effective approach to ensure a fast and successful start, with the clear objective of sharing the required know-how and enabling the organization accordingly. They must also take into account the rapidly changing healthcare ecosystem and the transformational effects of the COVID-19 pandemic, including supply chain disruptions, healthcare staffing shortages, shifting care settings and the rapid uptake of digital health solutions. High-growth markets do existin fact, 25 percent of the total medtech market is projected to grow at 6 percent or more a year from 2022 to 2025.4Life Science Intelligence | Health Research International: Medical Devices and Diagnostics Report, 2021. Never miss an insight. A leading global medtech company that sells medical devices to hospitals brought together its senior business leaders to explore how to take the companys go-to-market approach to the next level by establishing a digitally enabled, omnichannel commercial model. But those companies that had acted on the transformational moves we recommended were winning in the market and generating annual shareholder returns that were 10 percentage points higher than the average of a representative medtech index. Companies like Teladoc in the telehealth category have experienced massive revenue growth. The ecosystem model in the medtech industry is in its infancy, with plenty of potential to bring greater collaboration to solve an increasingly complex set of issues for providers, patients and payers. That was a kind of forced experiment for the industry, but medtech companies cannotand should nottry to revert to their old ways after the pandemic has passed. (See Exhibit 2.). Exhibit 3 highlights the industrys continued bifurcation. The context of health care and its delivery is transitioning to focus on the patient/user, providing opportunities for MedTech companies to expand the marketplace for their products. Commoditized products, in contrast, provide less of a differentiation angle to talk about. Related Expertise: In fact, 76% of US consumers report that they are interested in using telehealth in the future as a way to complement in-person visits to the doctor. This growth is largely driven by technology advances in the area of 3D printing. Prioritize specific use cases with high business value as lighthouse projectssuch as a digital-marketing-based lead engine and a remote-selling capabilityand deliver them in successive sprints along the future customer journey. Medical device manufacturers have been talking about the transition to value-based care (VBC) for much of the past decade. years if manufacturers and providers capitalize on the underlying trends. Established centers of this industry include the United States and Western Europe. Accessed August 1, 2022. To reduce this complexity, the company defined a standard set of roles and a clear logic for commercial model design by type of business (based on the archetypical selling models referred to above) and customer segment. Surg Endosc 2022 Aug;36(8):6285-6292. That may be expanding from product to care setting mastery (e.g., the operating room in acute care settings) or it may mean investing in a different growth strategy. There is a substantial gap that needs to be filled. The health care ecosystem is undergoing unprecedented changes, compelling MedTech manufacturers to rethink traditional commercial models. We have seen programs that are geared toward making it easier for customers to work with a medtech companyby redesigning and automating customer operations processes end-to-end from offer to cashimprove sales and unlock efficiencies. June 2, 2021. Build customer success into your DNA. We expect the next wave of portfolio activity to have these characteristics: Questions remain about the pace and magnitude of portfolio moves in the next few years. VR startups in the healthcare category have attracted attention from major players. Rapid health care market changes are challenging MedTech industry stakeholders to evolve and expand their current product supplier role to thrive in the Future of Health. Telecommunications, Media & Entertainment, Digital Surgery and MedTechs: Three possible future vectors, Value-based contracting is gaining traction, Medical technology trends toward six winning roles, Do Not Sell or Share My Personal Information. The winner takes home a cash prize of $50,000, $100,000 in kind prizes and the opportunity to receive up to $250,000 in investments. Medtech companies need a new approach. 4 Digital Trends That Will Speed the MedTech Product - Veeva Systems Please correct the errors and send your information again. The early results surpassed even the companys most optimistic expectations: these long-tail accounts started to grow twice as fast as core customer segments, clearly in response to the improved service level.The company furthered its efforts by rolling out a blended model in which field and remote sales reps worked together. Deloitte leaders discuss MedTech industry trends, challenges, and opportunities in a changing health care marketplace Rapid health care market changes are challenging MedTech industry stakeholders to evolve and expand their current product supplier role to thrive in the Future of Health. One nurse actually maintained a hand-written checklist of whom to contact at the medtech company for specific issuesand howgiven that each business unit had its own particular way of handling customer service. Aspect Biosystems focuses on 3D bioprinting of human tissues. Ecosystems build on the capabilities required for product-enabled services, but the involvement of many diverse players drives increased complexity and requires more sophistication across strategy, development and execution. Mostly due to supply chain disruptions and need for producing greater numbers of PPE, testing and medical devices to combat COVID-19. Their valuations, for the most part, have been compressed not as a result of poor performance but of macro forces, including speculation that rising interest rates will increase risk levels for unprofitable smaller companies (Exhibit 4). ensure their investments flourish at a time of fierce competition. Figure 1 About 60% of US surgeons believe that restrictions on in-person medtech sales rep visits are likely to persist after Covid-19 Of the 75% of physicians who preferred in-person visits from medtech representatives prior to Covid-19, 47% now prefer virtual interactions or less-frequent visits (see Figure 2). And looks like telemedicine is a medtech trend that will continue even as things get back to normal. The Five Biggest Healthcare Tech Trends In 2022 Bernard Marr Contributor Jan 10, 2022,12:15am EST Listen to article Share to Facebook Share to Twitter Share to Linkedin Wherever we look in the. As a result, commercial leaders may question whether the traditional go-to-market modelin which products and services are pushed through the sales forceis the optimal approach for finding and delighting customers. (See A Company Unlocks $5 Billion with a New Commercial Model.). Pear Therapeutics recently raised $20 million with a total disclosed funding amount of $284 million. Respondents ranked their capabilities as intermediate across most areas (as was largely the case in previous studies). Searches for Apple Watch are still on the rise (77% in 5 years). The ecosystem model in the medtech industry is in its infancy, with plenty of potential to solve an increasingly complex set of issues for providers, patients and payers. Our research has shown the high aspirationsand low starting pointmedtech companies have in building the related capabilities. Again, we started measuring total shareholder return from six months after the kickoff of such programs for a period of five years. TiE Toronto's 18th annual business venture competition, TiEQuest, is now accepting applications for all eligible early-stage companies, start-ups and entrepreneurs. Build a bionic sales force. To build an omnichannel model, the firm ran a series of tests on smaller accounts, which were not well-served by field sales reps. In that way, companies can build a foundation to test the impact of additional use cases like digital marketing or sales analytics, and thus build momentum for a broader transformation. Medtech companies willing to do business in new ways and develop holistic approaches to meet their customers' needs stand to exceed industry growth forecasts and reap significant revenue rewards. Medtech leaders are cutting unnecessary costs through process optimization, complexity reduction and organization redesign. The FDA are updating regulations to reflect advances in AI. In addition, the company defined clear criteria to prioritize strategic accounts and value-based health care leaders. The near term could represent a pivot point for the medtech industrys portfolio moves. A Company Unlocks $5 Billion with a New Commercial Model, Bringing a Next-Generation, Omnichannel Commercial Model to Life. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. It also enables a closer partnership between medtech companies and health care providers to deliver better patient outcomes at lower costs, thus contributing to a more sustainable health care system. Published Jan. 29, 2021 Greg Slabodkin Senior Editor Adeline Kon/MedTech Dive The calendar signals a new year but the medtech industry in 2021 will feel the lingering effects, both positive and negative, from the global coronavirus pandemic. In fact, 76% of U.S. consumers reported . The company defined a concrete value proposition for each customer segment in terms of coverage model (from strategic account management via traditional field forces all the way to remote selling and e-commerce), beyond-the-product solutions, value-added services, and basic customer service levels such as consignment stock and back-order prioritization.It standardized commercial roles. The recent forays in Europe into value-based procurement are opening the doors widely for such partnerships. McKinsey reports that national health expenditure could grow at a rate of 7.1% in the next five . Moreover, this approach unleashes innovation that benefits field forces. This shift may involve designing new processes, upskilling workers, investing in new technologies, adjusting governance structures and changing roles and responsibilities. By contrast, pharma M&A grew by almost 40 percent over the period. The COVID-19 crisis has changed the game. Cold calling only works in limited cases. To master the care setting, companies are combining their expertise, experience, and product portfolios in ways that generate increased value, better outcomes and brand loyalty for surgeons and patients. Based on a survey by McKinsey, only 11% of US consumers were using telehealth services in 2019. Marketing and Sales, June 16, 2021 In fact, there are already commercial applications available today. This shift to a customer success mindset, a concept first developed in the technology industry bysoftware-as-a-service vendors, can position medtech companies for success. By 2027, the market is expected to reach $22.84 billion, growing at a CAGR of 3.83%. Explore how 5G and edge computing could enhance medical devices and health care services reliant on devices. In 2023 we expect M&A to more closely resemble prior years. Growth drives valuations, portfolio moves can accelerate growth, and todays financial and strategic environment is attractive for M&A. Over the past 30 years, the R&D Vintage Indexa widely used industry metric that measures R&D output by dividing incremental revenue for a given year by average R&D spending for the previous five yearshas declined from more than 3.0 in the 1990s to 2.2 in the 2000s and to 1.5 in the 2010s. Although the industrys revenue growth has accelerated, on average, during the past ten to 15 years, much of the improvement has come from small- and midcap companies.3Our analysis included all medtech companies with market cap between $0.1 billion and $10 billion and with growth expectations in excess of 10 percent CAGR (22 in data set), as of April 2022. PDF Pulse of the industry: Medical technology report 2020 - EY Planning for the Unpredictable in Health Care Supply Chains This could help drive value in four areas: operational excellence, data-enhanced workflows, analytics and insights, and data enrichment. 3D bioprinting is similar to regular 3D printing, but its specifically designed to print biological materials. According to the Centers for Medicare and Medicaid Services, annual US healthcare spending on medical devices is projected to reach around $300 billion to $400 billion 5-6% of $6.8 trillion in total healthcare spend by 2030.1 However, medtech companies that are able to predict and meet changing customer needs within the evolving ecosystem will be well positioned to seize not only their expected share of traditional revenue growth,but will also be able to tap into new opportunities that access the remaining $6 trillion in projected total annual US healthcare spend by 2030.2. This shift to a customer success mindset can position medtech companies for success. Its QuantX product helps radiologists reduce false diagnoses when diagnosing breast cancer. But the legacy businesses in the portfolios of large medtechs tend to distract them from these markets. About TiEQuest - TiE - Global Entrepreneurship Organization Product and care setting mastery is the ability to deliver market-leading solutions that improve patient outcomes and user experiences, and drive overall customer success. 1. Leaders face an uncertain landscape. There are multiple types of AI applications in healthcare, including: However, medical diagnostics in particular may have the most potential for AI tech. CEO Jan Van Ruymbeke explains the challenges to adopting digital and analytics and how his company overcame them. Read more at the Journal of the American College of Radiology. In the wake of the pandemic, providers are seeking stable and simplified supply chain partners. Most do not yet have the capabilities in place to develop and implement a next-generation, omnichannel commercial modelbut they have become fully aware of its potential. Companies must build best-in-class commercial capabilities by reinventing clinical selling; partnering better with key accounts; building real marketing muscle that drives home the value of products; investing in market access and pricing capabilities; and making service a differentiator and source of revenue. They had to design a target future customer journey (rather than optimizing existing processes); put marketing in the pole position to generate, nurture, and qualify leads; build a bionic sales force with performance-enhancing technologies; and expand their focus beyond selling to actually making customers successful. Only about 1% of devices cleared for the US market in 2021 were novel and required premarket approval; the rest were cleared via the 510(k) pathway.3,4 Medtech companies must sustain their core businesses, but those seeking to capture growth beyond their traditional market share must navigate disruptive market trends and partner with customers to help meet their larger needs and future goals. However, 3D printing is commonly used for rapid prototyping. Buyers are no longer looking for just point-solution vendors, theyre interested in partnerships that can deliver holistic solutions to broader business challenges. The company then enabled commercial excellence teams to help each of its businesses review and strengthen their respective go-to-market models by deploying standardized role profiles in a modular fashion.It built a next-generation, omnichannel commercial model. DTTL and each of its member firms are legally separate and independent entities. Using this approach,a well-known orthopedics company created a new path to success for a decade-old knee implant by bypassing the status quo of incremental improvements in areas like materialsand leveraging surgical robotics and 3D printing instead, making a real difference in outcomes, efficiency and experience for its customers and their patients. We hope you learned something new from this list of 7 medical technology trends for 2023-2027. Medtech: The Pandemic Has Expanded Needs and Opportunities According to a Jabil Digital Health Survey Report, 52% of digital healthcare decision-makers are developing or plan to develop wearable devices. And the foundational requirements remain the same. Global M&A Trends in Health Industries: 2023 Outlook: PwC But now, were building on our original recommendations with six next-generation design pivots that will turn your commercial model on its head. MedTech Industry Trends | Deloitte US Overall, the industry has still made little progress, but those organizations that have taken the steps we recommended are vastly outperforming their peers. The early adopters of ecosystems are catering to specific patient populations based on disease states and demographics, care settings (surgical, ambulatory, at-home) or breakthrough products and technologies. Additive manufacturing (commonly referred as 3D printing) of medical devices was valued at $1.1 billion in 2019 and is estimated to reach close to $4 billion by 2027. That capability has the potential to ease healthcare staff shortages. Data as of 7/7/2022 Deal flow across all healthcare and life sciences continued downward from the peak Biopharma and medtech deal flow: Total number of deals Biopharma and medtech partnership and fundraising 2500activity was down again for the first half of 2022. The most successful will find the right blend of the three. Specifically, they currently have several ongoing projects designed to develop and update regulatory frameworks specific to AI. 4. 4 Trends Advancing Medtech | mddionline.com Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact. Medtech companies typically excel at launching new products by articulating product benefits beyond technical features (for example, business case development for hospital value analysis committees), providing the tools for seamless product integration into existing systems, and reaching clinicians with digital sales and marketing methods that are increasingly preferred in the wake of COVID-19. Moreover, many experts claim the use of robotic technology is especially useful during COVID-19 as it helps to decrease human-to-human physical contact. The healthcare industry is dramatically shifting. The company started by conducting in-depth ethnographic research, shadowing stakeholders in hospitals across seven countries in Europe and identifying more than 100 actionable pain points along the end-to-end customer journey. Most of these companies have maintained the attributes that make them attractive targets for larger acquirers: healthy growth prospects, well-stocked innovation pipelines, and portfolios ripe for acceleration through larger commercial engines. Future of medtech | Deloitte Insights concluded that the industry was relying on an outdated model of frequent in-person visits by sales reps to physicians, which we called the milkman model. In the medical technology industry, a next-generation commercial modelone that capitalizes on digital and omnichannel interactionscan lead to a twofold or threefold increase in the productivity of sales representatives, as measured in revenue. The sixth pivot is to define the required digital enablersin terms of the new skills, sales and marketing technologies, and data and digital platformsin parallel to implementing the first lighthouse use cases. Our initial study (Fixing the Medtech Commercial Model: Still Deploying Milkmen in a Megastore World?) Medtech offers acompelling value proposition for investors. For example, a medtech company that makes a great surgical implant may increase growth by extending the impact the product makes on the customer in non-traditional areas across the care pathway. Company websites and peer-to-peer exchanges on social media are key sources for this information. Above-market growth can only be achieved through finding new and better ways to deliver improvements in healthcare outcomes, patient experiences and provider effectiveness. 2. The pandemic boosted consumer adoption of many innovative technologies and highlighted the importance of adaptability in the medical space. PDF New Trends and Issues Proceedings on Humanities and - ResearchGate And is forecast to reach $33.72 billion by 2027. The Medical Design Excellence Awards 2018 finalists demonstrate trends toward patient risk reduction and faster, more-efficient healthcare delivery as well as connectivity and user-focused, consumerized healthcare. However, the fundamentals remain. Last, the company discovered the power of data analytics. Which marked it as the largest VC deal for a biometric wearable in Q1 2020. Products like the Apple Watch, which is still growing, helped create initial awareness of ongoing health tracking. We have continued to track that impact. A company with $10 billion in sales must generate $500 million to $600 million of new revenue every year to keep pace with market growth. Put marketing in the pole position. Yet a large disconnect still exists in many medtech companies between marketing, sales, and customer success management. BCG was the pioneer in business strategy when it was founded in 1963. Accelerating growth in medtech: The next surge in portfolio moves. Customer loyalty has a huge impact on longer-term profitability. The pandemic is changing this. - 2023 PwC. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Which represents 109% growth compared with Q3 in the previous year. 1. DTTL (also referred to as "Deloitte Global") does not provide services to clients. There are two levels to this type of approach. traded at a multiple of almost 11 times revenue. The uncertainty around COVID-19 and its impact on operations has waned even if the virus itself has not, allowing businesses to shift their focus to external matters. Health Care Industry, Companies are also often surprised by the extent of pain points and frustrations along the customer journey. New Trends and Issues Proceedings on Humanities and Social Sciences Volume 4, Issue 10, (2017) 345-350 www.prosoc.eu ISSN 2547-8818 Selected Paper of 6th World Conference on Business, Economics . They include whether elective-procedure volumes will continue to fluctuate, whether shareholders of growth stocks will be willing to sell, and what role geopolitics will play in M&A strategies. We also extended our financial and organizational benchmarking database to 150 medtech businesses worldwideincluding nine of the ten largest companies in the industry. He helps clients grow through organic and in More, Consulting services and solutions to help advance medical technology transformation, Medical technology advances lead to evolution and innovation. Although both the pharma industry and the medtech industry have been sculpting their inorganic portfolios over the past four decades, in the past five years activity among medtechs has fallen while pharma companies steamed ahead. Navigating the Future of the MedTech Industry has been saved, Navigating the Future of the MedTech Industry has been removed, An Article Titled Navigating the Future of the MedTech Industry already exists in Saved items, Deloitte leaders discuss MedTech industry trends, challenges, and opportunities in a changing health care marketplace.
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