Heading into 2014, medtech doomsday preppers are busy developing survival strategies for the perceived Obamacare apocalypse while others are adopting a wait-and-see approach. But amid the doom and gloom, there are several beacons of hope offering opportunities for medtech success.
In Vitro Diagnostics. While many markets may struggle under the Affordable Care Act (ACA), the IVD industry is predicted to get a welcome boost. “IVD benefits more than most medtech industries from the ACA,” notes Bruce Carlson, publisher of Kalorama Information. “It is still affected by the negative portions, as IVD test instruments are considered a device and taxed. But it’s one of the few areas of medical devices that will truly see a benefit from the expected patient volume. As more people gain insurance coverage and take advantage of wellness programs and preventative care, test volumes should increase.”
Data. The era of Big Data is upon us, and it may be the key to improving outcomes and reducing healthcare costs. Smart, connected medical devices that capture relevant data about patients can help to more effectively treat problems and provide insight for future product enhancements. Opportunities around data abound. “With the demand for more data being a requirement for achieving identifiable disease outcomes, the medical device sector has a great opportunity to develop new platforms for collecting data—such as remote monitoring, mobile apps, and the cloud—and could take the lead in helping the entire healthcare industry shape the type of data it requires and how that data is delivered on a global basis,” says Richard Lincoff, medical devices industry practice leader at Cognizant.
|Learn about the misconceptions and hype surrounding Big Data at the MD&M West keynote presentation by "The Healthcare IT Guy" on Thursday, February 13.|
mHealth. In a recent Frost & Sullivan survey, 51% of respondents identified mHealth as the hottest topic in healthcare. And with the 2013 release of the final guidance on mobile medical apps, companies now have some clarity on how to proceed in this chaotic but promising space. “Mobile apps are growing in number exponentially but, more importantly, are starting to do higher-value tasks,” says Epstein Becker & Green’s Bradley Merrill Thompson. “Apps are significantly empowering patients to take control of their own care, providing patients with the data they need to make important decisions. Further, nearly every electronic medical device will somehow be connected to an app.”
Corporate Venture Capital. Named by PricewaterhouseCoopers (PwC) as a “top issue in healthcare” for 2014, corporate venture arms could be a win-win for medtech’s power players and innovative startups alike. As healthcare VC funding continues to dry up, corporate venture arms offer hope for cash-strapped startups while providing access and potential competitive advantage to established firms. “It provides a vehicle that can be leveraged by corporate players looking to embrace the ‘fast fail’ approach to innovation demonstrated by nimble entrepreneurs,” says James S. Varelis, principal at PwC pharmaceuticals and life sciences. “Corporate venture arms inoculate their parent companies with fresh ideas and talent. Through partnerships with traditional venture firms, corporations can further broaden their reach into startup communities and increase innovation without having to grow it all in-house.”
Innovation. The ACA has created an R&D paradox: Funding is expected to decline as companies try to offset the device tax, but innovation will be king in an outcomes-based healthcare system. “Value will be measured by quality outcomes, consumer transparency, and cost,” says Ash Shehata, a member of KPMG’s Global Center of Excellence. “The product of the future is going to be one that drives value to consumers, reduces cost, and makes it visible to the world that it is a ‘best-in-class product.’”
Innovative technologies that address unmet clinical needs will be the industry’s saving grace—and there are a number out there. Renal denervation systems, mitral valve repair devices, the much-ballyhooed artificial pancreas, and Abbott’s Absorb bioresorbable scaffold are all exciting prospects for the U.S. market.
So, yes, the medical device industry undoubtedly faces an epic battle. But there are areas of opportunity that companies can—and should—be optimistic about. Smart companies will seek out opportunities and reevaluate their businesses rather than resigning themselves to a medtech end of days.
|Learn about additional opportunities for medtech at MD&M West February 10-13.|
[image courtesy of Stuart Miles, DIGITALART/FREEDIGITALPHOTOS.NET]