3 Biggest Challenges to Healthcare Innovators

          Medtech companies are used to running into regulatory obstacles during their innovation processes. According to MDDI, these companies are divided into three type of business: large scale medical device innovators and manufacturers; new device innovators (ranging from the surgeon with a good idea to the existing medical device company with a product line of a few products); software technology innovators. It’s true that they all share common challenges, but their primary ones are different according to their role in this complex industry.

Source: MDDI

When talking with each segment; here are the three biggest challenges they all share:

1. Cost and complexity to improve and enhance innovation: large scale medical device innovators have a great overview of the marketplace and the regulatory system, but identifying the best R&D opportunities is not always easy. Big data analytics are expensive and complex to implement. “The more incremental the deployment of any new technology can be made, the more likely you are to achieve final success.”

2. Time and volume of follow-up and tracking data from FDA: it’s very time-consuming to go through FDA notices, recalls and regulatory changes. “Technology now allows you to both take optimal advantage of the level of effort required and increase the quality of the results for you by automating the access to the data.”  

3. “Getting blindsided by regulatory issues is probably the most common complaint from software innovators”. Having access to FDA guidance, regulations and industry best practices can help these innovators avoid this type of problem.

How can device makers succeed in today’s transforming healthcare industry?

     The healthcare industry is moving toward an “outcomes-based, patient-centric, cost-conscious environment”. How will this change impact the healthcare manufacturers? What do they have to do to compete successfully, grow market share, and stay profitable? According to MDDI, there are three key factors to surviving in the transformed healthcare ecosystem.

MDDI

1. Get Closer to the Patient, Get Smaller

Labs must extend its range to patients: point-of-care testing (POCT) is moving outside hospitals into the community as we are seeing patients and caregivers becoming more technology-empowered. This is driving demand for products that are: smaller, simpler while maintaining functionality and accuracy. Interfaces must be more intuitive for operators who may have minimal or no training. Device makers must also keep in mind how their equipment will maintain connectivity to the central lab and its data systems.

2. Big Data Analytics, Big Opportunity

Since the volume of healthcare data in increasing, manufacturers of diagnostic devices and lab systems have an opportunity to multiply the value of their products. Incorporating the right analytics can enable a extensive range of value-added competences. “Analytics can be used to streamline and improve processes—supporting better test utilization based on ordering patterns and faster throughput by analyzing workflows, for example. “

3. Business Model Innovation

To thrive in the new healthcare environment, clinical laboratory device makers need to focus their innovation investments on the business models, which will highlight the role of data as a generator of value. “While accuracy, ease of use, and affordability continue to be essential, a key differentiating factor will be how a product manages, distributes, and utilizes data to help improve and accelerate clinical decision-making.”

“Clayton Christensen, author of The Innovator’s Dilemma and The Innovator’s Prescription, has shown that being slow to react to disruptive changes in technology and embrace new market opportunities leads to failure. The dramatic changes impacting the healthcare marketplace are upon us—and the time to move forward is now.”

Supply Chain Strategies for Medtech Companies

Before the senior director of the global supply chain at Edwards Lifesciences’ presentation at MD&M West 2014 Conference in Anaheim, CA, he talked about the theme of his session which was the best practices for medical device companies on supply chain strategies in the face of regulatory, technology, and margin-pressure challenges, as well as legislative changes.

     The senior director explained that innovation is and will always boost medical device companies. However, one shall notice that there is another key factor in the healthcare industry: operational and supply chain efficiencies, which is requiring transformational strategies for managing the supply chain. In addition, regulatory requirements are becoming more detailed and more constraining. At the same time, there are increasing margin pressures and legislative changes. All of these different factors are forcing companies to reevaluate their operations and supply chain strategies.

The senior director advises that innovation is not enough in the face of regulatory forces, legislative changes and margin pressures. In order to remain leaders in the medical device industry, companies should improve quality, lean manufacturing operations, distribution efficiencies, and inventory optimizations. Some areas to be focus on: global sales and operations planning platform, solid manufacturing improvement program (that includes lean manufacturing principles), determining how to introduce new products to the market and supplier risk management.

References: http://www.mddionline.com/article/supply-chain-strategies-challenging-medtech-landscape-0

Outsourcing and Innovation: Medtech OEMs

Outsourcing seems to be an increasing trend in the medical device industry and it’s expected to grow by 40%, reaching US$ 12 billion by 2018. Due to the pressure companies are under to develop devices that offer real value and not just incremental benefit, OEMs are focusing on innovation and core capabilities.

As a result, medical devices companies are asking more of their contract partners, responsibilities from front-end design to back-end services including warehousing, distribution, and regulatory assistance. According to the Millennium Research Group report, “overall trends in the medical device outsourcing space indicate that [contract manufacturers] are broadening their range of services, growing organically or through acquisition to become one-stop-shop manufacturers.”

     Another trend of OEM strategy is no longer to manufacture devices in China or Mexico for distribution in the United States and Europe. Instead, these companies are making products in emerging countries for regional and local distribution.

“To line up with our global customers, who are manufacturing in Asia for Asia, Europe for Europe, and the Americas for the Americas, we need to have capabilities in each of those geographies.”

Phillips-Medisize president and CEO Matt Jennings

References: http://www.mddionline.com/article/medtech-oems-focus-innovation-suppliers-step-their-services

How Medical Device Industry is Failing

In the recent PricewaterhouseCoopers (PwC) report, “Top Health Industry Issues of 2014”, the company declared that the medical device industry is getting back on track, boosted by the Affordable Care Act, technology advances and changing consumer attitudes. However, the medical device companies are still failing in some areas of this new landscape.

According to PwC report, due to the resistance of the medical device companies to show their consumers what they are getting for their money, more than 50% of them don’t think they have enough information on prices when buying medical devices.

Another indicator of PwC report is that less than 15% of the medical technology executives admit their company formally manages innovation. This demonstrates that the medical technology companies should be more concerned in managing their resources and investing in innovation.

The last indicator of “Top Health Industry Issues of 2014” which shows how medical device companies are failing is the waste of patient data. Few companies integrate patient data captured via apps into clinician workflows, electronic health reports and their R&D systems to drive innovation.

References:http://www.mddionline.com/article/3-ways-medtech-industry-failing

Second World Health Organisation’s Global Forum on Medical Devices

The Second World Health Organisation’s Global Forum on Medical Devices took place in Geneva on November 22-24th and gathered together the academia, international organisations, industry and NGOs. While one of the WHO’s strategic objectives is “to ensure improved access, quality and use of medical devices”, during this event the organisation emphasized how important it is to align medical device innovation with the public health need. According to the WHO, there is a mismatch between these two spheres.

      After hearing the stakeholders’ opinion, five insights were listed to help the industry work towards resolving the mismatch: 4 ‘A’s define the agenda to improve access to appropriate medical devices (Availability, Accessibility, Appropriateness, and Affordability); Diagnostics industry contributes to low resource settings beyond Corporate Social Responsibility activities; Bring research and manufacturing to low resource settings; Young entrepreneurs have a good grasp of localisation; Mobile is the way to go.

       To know more about the event, go to  www.who.int/medical_devices/2nd_gfmd/en/ 

References: http://www.medtecheurope.org/blogposts/195/40/blog/2013/12/02/5-WHO-Insights-into-conquering-the-medtech-mismatch

“3D: Printing the Future”

           3D Printing, or more professionally called Additive Manufacturing, is a process of making three dimensional solid object from a digital model. It can print in plastic, metal, nylon and so many other materials. It can make manufacturing prototype, end user products and even human organs by using a person’s own cells. This is possible because of its technology: it creates a three dimensional object by building it layer by layer successively.

        Besides the industry sector and academic researches, 3D Printing is being used by physicians and surgeons. The most recent event, that was all over the international media, is a case that took place in the United Kingdom. Surgeons are using 3D Printing to rebuild a patient’s face which was crushed in a motorbike accident. However, the surgery hasn’t been booked yet. The theme became an exhibition at the Science Museum in London and it is called “3D: Printing the Future”.

References: http://www.3dprinter.net/reference/what-is-3d-printing

        http://www.bbc.co.uk/news/uk-wales-south-west-wales-24926598

Medtech Companies: Prepare for an Innovation Makeover

A report from PricewaterhouseCoopers’ (PwC) Health Research Institute concludes that Medtech companies must change the way they innovate. In a new economy that rewards better care, innovation is the key if they want to keep adding value to its customer.

The report indicates new alternatives for medtech companies to innovate and become more competitive, outside traditional research and development. The report also shows a survey made with medtech executives, with questions about their innovation activities. PwC analyst suggest a innovation makeover for medtech companies, because customers (either hospitals, accountable care organizations or individual customers) now demand more in financial, convenience and health terms.

“Medtech companies must focus more on service and business model innovations that meet new industry demands rather than on incremental product improvements.”

Besides, the report suggests three ways for medtech companies to innovate: operate as a “lean startup”, new innovation metrics and get closer to the patient.

References: http://www.mpo-mag.com/contents/view_breaking-news/2013-10-24/report-medtech-firms-must-change-approach-to-innovation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%253A+MPOBreakingNews+%2528Medical+Product+Outsourcing+Breaking+News%2529

Medical Device Firms and Its Challenges

As the medical device industry faces some significant market threats these days, like slow-growing market and strong regulatory system, it became necessary to be vigilant for signs and understand when changes are needed. Executives should pay attention to at least four signs that indicate that their companies need to adapt. Frost & Sullivan's Venkat Rajan, principal analyst, who leads the firm's analysis of the medical device sector, discusses what those are.

The first sign is “Utter Lack of Product Differentiation” which means that customers see medical device products as commodities and it leads to customers’ indifference to the product. The second sign is “Profit Model Under Pressure”, this means that the profit margin declines year by year and to assure its market presence companies are facing significant internal cost-cutting. The third sign is “Market Disruptors on the Horizon”, this sign has to do with fast technology development which means that a product becomes obsolete quickly and, sometimes, its substitute proves to be better, faster and cheaper. Finally, the fourth sign is “Internal Infrastructure Deteriorating”, this means that the company’s workforce usually is slow to adapt or innovate and its strategy normally is focused on maintaining its market presence instead of expansion.

References: http://www.mddionline.com/article/four-signs-medtech-firm-needs-reinvent-its-business-model

Senate Votes to Repeal New Medical Device Tax

The Affordable Care Act, signed into law back in 2010, includes a 2,3% that will be charged on the total revenue of a medical device company, regardless of whether the company generates profit or not. It was meant to start this year and due to the polemic that it has raised among the medical device industry and in Congress, a repeal amendment was proposed.

On Thursday, March 21^st, the US Senate voted a 79-20 tally to repeal the medical device tax. The voting was bipartisan; it included 33 democrats against the tax. The amendment proposed is called Medical Device Access and Innovation Protection Act, introduced by both a Republican and Democrat Senators. The reasons for such a support to the amendment are due to a concern of losses in profits, job creation and R&D investments. The opponents to the repeal claim that the new tax will raise a $30 billion in 10 years and it will be funding the Affordable Care Act.

References: http://www.mddionline.com/article/medical-device-tax-jeopardy-after-senate-votes-repeal

Outsourcing as the key to Competitiveness

As the industry suffers from uncertainty pressures, the trend to remain competitive is turning to outsource. A Study surveyed MD+DI’s readership about outsourcing in the medical device sector ranked a list of concerning issues for the next 5 years. Regulatory hurdles, intellectual property, R&D and device tax were the most mentioned.  

The majority of the respondents agreed that outsourcing is an answer to save costs and time. For the next five years, most of them are looking for increasing the numbers of contract service. Besides manufacturing service, companies are interested in legal and regulatory services as well as R&D and design capabilities.

US-based service providers are the most common when outsourcing a project, however Russia and Latin America are the regions that the respondents most expect to expand outsourcing activity in the coming years.

Biokyra Pesquisa e Desenvolvimento is a Brazilian medical device company that may become one of the providers to the US industry when it decides to expand its contract service to Latin America.

References: http://www.mddionline.com/article/5-years-medtech-firms-will-outsource-design-legal-and-regulatory-services-over-manufacturing

Patent Application in Brazil increases 6% in 2012

Despite the international uncertainty, patent application in Brazil increased 6% between 2011 and 2012[1]. The growth started back in 2010, after the first symptoms of the global crisis in 2008 and 2009 which reduced the numbers of patent application.

Whether in universities, companies, multinationals or research institutes, innovation is the main concern among all of them, in every sector. Not only has the production raised but also the need for intellectual protection in a large emerging market.

Growing demand claims for more efficiency. The INPI (Brazilian National Institute of Intellectual Property) is taking its steps towards better efficiency by offering the inventors a system that enables online applications and monitoring, similar to the ones that the USPTO (USA) and EPO (European Union) already have. This is expected to make the patent filing process in Brazil simpler and more straightforward.

References: http://www.inpi.gov.br/portal/artigo/pedidos_de_patentes_apresentam_crescimento_de_6_no_ano_passado

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[1] For further information about INPI statistics, go to http://www.inpi.gov.br/images/stories/downloads/patentes/pdf/Patentes_Depositadas_e_Concedidas.pdf

Innovation in the Medical Device Sector

The concept of Innovation is always linked to the idea of creativity, novelty, technology. Nevertheless, it doesn’t restrict itself to gigantic transformations in expensive technologies. Innovation is usually seen when the problem is identified and better or new methods are created to solve it or to improve a daily process.

In the medical device industry, this preconception is frequently made. Even in this sector, innovation does not necessarily involve large investments but, most importantly, it involves the comprehension of the patient’s needs and its fulfillment to save his life or to improve his quality of life.

Unlike the consumer space where there are no barriers to different ideas, the medical device sector deals with regulatory systems, which dictate the requirements that the industry must meet. Obviously, the regulatory system is concerned about setting high standards for the safety of the patient, but sometimes it can inhibit innovative ideas.

References: http://www.mddionline.com/article/medtech-innovation-doesnt-have-be-expensive