Selling a New Device? Do This One Thing First

New medtech companies receive a slew of advice on reimbursement, regulatory approval, and funding—but there’s one key step they may be missing.

Marie Thibault

FDA, CMS, private insurers, venture capitalists—it sometimes seems new company executives have a dozen different hurdles to leap over at once. 

Joseph Galatowitsch, president of Dymedex Consulting, acknowledges that there are common issues, like reimbursement, regulatory approval, and intellectual property that are integral to medtech companies. But before those questions come into play, Galatowitsch believe it’s most important to focus on the market opportunity "so you know if it's worth it to spend the next seven years of your life struggling to make this vision real."

Most companies probably believe they've got their market figured out. After all, it’s common to hear company pitches citing millions of potential patients and market opportunities worth several hundred million or even a billion dollars. Galatowitsch calls that a shortcut, the view that "our market is so big that we don't have to understand our market." Instead, he points out that patient populations for most diseases “are very heterogenous relative to the benefit of their technology,” meaning that only a subpopulation of the patients will have the greatest benefit. 

[Hear more from Galatowitsch at the MD&M West Conference February 9-11, 2016 in Anaheim, CA. He will be speaking on "Market Access Challenges and Opportunities" and "Device Features and Advantages Don't Matter—So What Does?"]

“We don't find very frequently that there's no market, but we find very frequently that it is quite different than what you had initially expected," Galatowitsch said.

As an example, he notes that he worked with a company that started with a market opportunity of six million plus patients with resistant hypertension. After further analysis, the technology’s net opportunity was narrowed down to 190,000 patients per year, with about 50,000 ideal patients. These are patients “for whom a clinician would say . . . oh my god, this is fantastic,” he said.

But who wants to see a smaller market opportunity? Where's the fun—or the money—in that? 

By defining a narrower market, company management teams can actually increase their chances of market success, Galatowitsch said, because they can encourage a natural sequence of adoption that starts with the most compelling patients. "You're going to get all the patients. But you have to do it in sequence. You can't go out and say, 'Use it on everybody.' This is what most companies want to do, because they don't want to 'limit my market,'" he said.

New technology evangelists need to work with their physician clients to help them better understand how and when to use the technology. By identifying the patients most likely to have success with the invention, "You're helping your customers take the journey. If you don't help [them] take that journey . . . those few clinicians who have an intrinsic interest in your technology will go develop their own sort of algorithm. In reality, all you're doing is transferring the burden and the responsibility for patient stratification to the customer," Galatowitsch said. 

This is especially important for reaching beyond the early adopter customers into the group of doctors who is willing to use a new technology if it makes sense for their needs. These users care about a number of factors—Galatowitsch's practice has identified 14 items, including maintenance burden, scalability, ease-of-use, body of evidence, society guidelines, and economics—when deciding whether to adopt a new medtech product. If any key factor is missing, "it doesn't matter how many sales reps you have . . . you're not going to get any kind of sustainable adoption," Galatowitsch said.

For any medtech executives feeling deflated without a billion dollar market opportunity behind them, Galatowitsch has a direct message: "There are only about 10 or 15 billion dollar medical technologies . . . It's ok that you don't have it . . . It's not necesary to go find big diseases or go find big opportunities . . . because when you get done peeling the onion, if you wind up with 0.1% of hypertension, that doesn't make a better opportunity than 70% of breast cancer."

Check out the future of medical technology at the world's largest medical design and manufacturing event—register for the MD&M West Conference, February 9-11, 2016.

Marie Thibault is the associate editor at MD+DI. Reach her at marie.thibault@ubm.com and on Twitter @medtechmarie

[Image courtesy of DAVID CASTILLO DOMINICI/FREEDIGITALPHOTOS.NET]