What’s the Outlook for MedTech in 2019? Key Challenges and Opportunities
This is a complex time for the MedTech industry, with many challenges and opportunities ahead. Innovative technologies are constantly evolving, and we’re seeing increasing integration of technology into healthcare. Tech initiatives more commonly associated with California and the West Coast, such as AI, machine learning and robotics, are migrating into medicine.
The new Medical Device Regulation will further separate innovation from commercialisation i.e. fewer SMEs will manage to succeed on their own and will be subject to future M&A. Boston Scientific acquiring five early stage technology companies in 2018 from their VC owners is just one example.
The key macro drivers are: bolt on M&A; consolidation of portfolios; greater collaboration between industry and academia; digital health care and remote (self)care; VR and AR; block chain and innovation to be aligned with MDR.
Here I discuss some dynamics that are likely to impact the sector in 2019, the effect these will have on businesses in the mid-term, and the implications for people and talent.
Key Challenges and Potential Solutions
Recent reports have predicted that many European MedTech companies expect business to be stagnant or weaker in 2019 compared to last year. The primary causes appear to be negative global trade dynamics and increased economic uncertainty around the world. Increasing budget constraints are putting the healthcare industry under pressure and are limiting its ability to continuously develop new advanced equipment and technologies.
Further challenges are created by the sheer volume of data being generated. For instance, 90% of all data in MedTech comes from imaging but 97% of it is not used. The MedTech industry currently lacks the infrastructure to bring it all together and make full use of the wealth of data being generated.
In the past, MedTech has had to develop new capabilities in functional areas such as Medical, RA, Safety and HTA and now I believe it is time to start learning from the gaming industry and consider hiring talent in Behavioural Sciences to understand what (really) drives patient compliance.
Future Opportunities
Despite these challenges, the MedTech sector remains buoyant and is moving towards a more cohesive approach to medical technology. The industry is already showing a trend towards more integrated digital health systems, such as convergence of software and hardware in medical technology and electromedicine, leading to new technologies such as app-controlled wearables, robotic systems for surgery and information systems at patients’ bedsides. In addition, new alliances between tech and healthcare companies may allow businesses to harness the potential of Big Data. Companies will need to take these innovative approaches to their business strategies, embracing the move towards integrated digital health systems and new partnerships. By harnessing emerging opportunities, MedTech companies can strive towards continued growth and development.
Now is an exciting time for the industry, with many “green shoots” emerging and science developing at a rapid rate. We are seeing growth in areas such as vital sign self-monitoring – for example, the partnership between J&J and Apple has produced the iWatch, able to detect atrial fibrillation or heart fluttering earlier. Wearable health monitors such as this can ensure that the right people get the right medication at the right time, ultimately saving lives. Such new technology is changing healthcare in ways that wouldn’t even have been imagined a few decades ago.
There is also a mutually beneficial opportunity for MedTech companies working closely with healthcare providers to deliver not just equipment but also innovative services, helping them to reduce costs and improve quality of care by meeting their specific needs. This creates a chance to tap into new revenue streams. We are also seeing growth in new patient pathways, academic collaborations and stronger engagement from payers and care providers, creating opportunities for new partnerships.
What does this mean for people?
The boundaries of MedTech are increasingly blurred by convergence with biotechnology, telecommunication, artificial intelligence and even consumer health and wellness.
The move towards integrated digital healthcare systems will demand interdisciplinary skills and knowledge in areas such as behavioural sciences, clinical and patient experiences, real world evidence, insurance modelling and remote/home care.
The younger generation is less mobile and expects virtual work models rather than relocation across regions and countries which makes employer engagement, creativity, loyalty and culture shaping more challenging. As a search consultant, my clients will have to be prepared to accept “shorter short lists” and longer lead times to find the relevant balance between a candidate’s technical competences, personality, leadership style and ability to adopt to (game changing) change.
The Life Sciences is a truly global industry and executive talent is also global, albeit still predominately to be found in the US and Western Europe. However, China is catching up quickly and building a new domestic Life Science eco system – today they are number two in pharma sales.
To overcome budget-related market challenges, MedTech companies need to actively manage their costs. But the key to growth demands that businesses look beyond cost-focused measures and focus on making broader, more significant changes to improve revenue-focused profits which drives the services model.