Driving innovation and improving margins, all the while reducing cost, can seem like a tall order. Yet, that is the remit of medical technology companies that want to thrive in the years ahead, and they must achieve those goals in an unforgiving global regulatory environment. The Deloitte Center for Health Solutions (New York, NY) and industry lobbying group AdvaMed (Washington, DC) recently surveyed 22 medtech companies on how they are responding to these trends. Here are some of the key takeaways from the extensive report.
R&D leaders surveyed said they would meet the aforementioned challenge by focusing on the following priorities during the next three to five years: diversifying their product portfolio (86%), accelerating time to market (82%) and applying real-world evidence to product development (77%).
One consequence of portfolio diversification is a shift in R&D investment to “transformational innovation” and away from core products and line extensions, according to the survey. This form of innovation “creates and delivers customer value through novel products, solutions and business models that address unmet market needs,” write Luis Hakim and Sonal Shah, who authored the survey report. R&D budgets to bolster innovation are expected to increase by five percentage points in the next two years, but it’s important to note that this reflects a shift in R&D dollars rather than an increase, said the report. R&D budgets as a whole will be relatively flat.
|A two-day conference track on new technology and next-gen design at MD&M West will address a number of issues raised in this article. The medical manufacturing trade show is co-located with PLASTEC West at the Anaheim Convention Center in Anaheim, CA, on Feb. 5 to 7, 2019. For more information and to register to attend, go to the PLASTEC West website.|
The emphasis on value-based care, which entails new payment models tied to device performance and patient outcomes, has had a profound impact on how medical device companies engage in innovation. Fifteen of the 22 companies surveyed reported a “shift in their strategic focus toward innovation under value-based care.”