In the first blog of this two-part series, we highlight two of the four key forces driving changes in the healthcare ecosystem, encouraging medical device companies to rethink their traditional commercial models.
If you could generate billions of dollars in shareholder value, over three years, by revamping your commercial models, would you do it?
Medical device companies have repeatedly contemplated on similar questions while facing the fundamental forces transforming their industry. Their desired outcomes:
Execution of the necessary steps towards these objectives has often included complete overall of a few operations, calibration of some, and wait-and-watch for the rest. This blog reviews what transformed the outlook of the medical devices industry.
Traditionally, medical device companies focused on creating innovative products, new delivery systems, and of course, strengthening their relationships with healthcare physicians (HCPs). |
Traditionally, medical device companies focused on creating innovative products, new delivery systems, and of course, strengthening their relationships with healthcare physicians (HCPs). As companies felt pressures of growth and competition, the industry also observed forces in the healthcare ecosystem that challenged the traditional commercial approach. With the new digital world order, data availability made the need for ‘incremental changes’ shift toward ‘transformational changes.’ The trick was to use data and insights to manage operations as an outcome of innovation, pricing and cost of therapy, and healthcare outcomes leading to improved patient quality of life. The impact of these operational changes, it was hypothesized, could change customer perceptions and the nature of relationships in the ecosystem, that would eventually impact go-to-market outcomes and revenue models.
Some of the critical healthcare ecosystem forces influencing the medical devices market:
The entire healthcare ecosystem, with the medical devices industry right at the center of healthcare diagnostics and delivery, is today driving towards patient-centricity. Meaning, medical device companies need to adopt, master, and leverage big data, advanced analytics, and digital solutions to transform their ability to understand the complex stakeholder behaviors and perceptions, and be able to react appropriately at the right moment.
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Digital adoption and transformation, for a complex manufacturing to services industry such as medical devices, can be at various levels:
Medical devices companies are rapidly recognizing the power of digitization. With commercial digitization, on- demand data, and real-time insights, functions across the value chain such as product design and supply chain logistics can be optimized. That said, despite all the potential benefits, medical device companies are still ‘Digital Followers’4 to companies in other industries such as Retail and Hospitality (Figure 2).
With the increasing pressure on pricing from across the healthcare and life sciences industry, HCPs are demanding real-world evidence (RWE) to prove improved patient outcomes and reduced overall cost of care. As value-based healthcare gains popularity, manufacturers need to continually look at incremental changes to healthcare outcomes by plowing the real-world-data into clinical benefits. With technology and advanced analytics having the ability to simulate results based on value inputs from pre-clinical, clinical and post- marketing surveillance information, the implementation of these outcomes is imperative to attract the regulators with innovations aimed at improving the quality and cost of care. For example, Innovative Trauma Care (ITC) invented a low-cost and easy to use clamp to manage bleeding from trauma wounds, proving immense value to the patients and physicians alike5.
The goal of patient-physician collaboration is to enhance clinical results and care value. To facilitate this change in outlook, medical device companies will need to leverage RWE-enabled patient-level analytics to better engage and collaborate with both stakeholders. The results can be quite forward-looking and rewarding (even as mentioned in the section of Digital Transformation). Minimally invasive surgeries2, implantable drug delivery systems6, wearables leading to HCP feedback on lifestyle and diet moderation7, and IoT deployed at hospitals and homes8 are some clear examples of evidence- based outcomes commercial direct patient benefits.
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Regulatory filings will need to keep up, and at the same time, keep-check on the fast-paced development. That said, the regulatory organizations are continually setting up new norms9 and keeping a vigil on adverse events and sub-optimal delivery10 of healthcare. Meaning the guardrails being developed due to constant generation of evidence of healthcare outcomes will continue being under check.
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