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April 28, 2020
3 Min Read
While certain medical devices, supplies, and diagnostics necessary for treating COVID-19 patients have seen increased demand during the pandemic, the postponement of non-emergency procedures has impacted demand for many other products.
Orthopedic procedures have been the most obvious type of postponement, noted Brian Chapman, managing partner and leader of the medical technology industry vertical at ZS Associates. “These are not necessarily elective,” he told MD+DI. However, “the thought process is that maybe they would be safer in two months. You don’t want to risk a life with a knee replacement, so it makes sense to wait.”
Medtech companies experiencing a drop in product demand have been responding in various ways, with some taking drastic measures to cut costs and others just “waiting for the storm to pass,” he said. While these companies do have an obligation to ensure their “cash burn is appropriate,” he said, and “in some cases there are reasons for concern because of the cash position or exposure,” there doesn’t appear to be a uniform response across affected sectors. “Some are worried about money and employees, and others are not even having a conversation,” he added. The differences may be due to leadership, structure, or other reasons, he said.
Nonetheless, Chapman encourages medtech companies to plan for recovery. “What I think will happen is there will be pent-up demand for postponed procedures,” he said. “One of the smartest things companies can do is to be ready.
“Having resources in the right place when the recovery happens is critical,” he continued. “The last thing you want to have happen is that a procedure doesn’t happen because the product is not there.”
Continuing with the orthopedic market as an example, Chapman said it is “not just having the orthopedic device at the hospital, but also all the tools required, such as instrument sets. There is not an infinite supply—they are limited resources that need to be managed and in the right place at the right time."
He also pointed to the need for clinical support. It is important “to help hospitals respond and to ensure there is a workflow to support the hospital,” he said.
Chapman also advises companies to adapt their means of communicating with customers. “The medtech industry has a very high reliance on field-based sales getting messages to healthcare staff,” he said, calling it “an over-reliance on a single channel with a single stakeholder.
“We really should have other ways of communicating, such as a multichannel approach involving different hospital staff as well as patients,” he continued. “Many companies have had other tools, such as CRM and even Twitter, but these have been waiting on the side. Smart medtech companies are training their staff to use these tools and get better at these interactions.”
So when could medtech expect to see recovery? Chapman expects a gradual return to normal. The recovery won’t be “just turning the spicket on,” he said. “Maybe 10% in May, with further recovery by July?” Chapman wondered.
And there will actually be a lot of information emerging as each region recovers that could help guide decision making and forecasting, Chapman said. “Because this is a rolling crisis, you can use information from other parts of the world,” he said. “Look at what happens when their recovery occurs.”
About the Author(s)
Daphne Allen is editor-in-chief of Design News. She previously served as editor-in-chief of MD+DI and of Pharmaceutical & Medical Packaging News and also served as an editor for Packaging Digest. Daphne has covered design, manufacturing, packaging, labeling, and regulatory issues for more than 25 years. Follow her on Twitter at @daphneallen and reach her at [email protected].
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