MedTech Losers of 2013: Innovation

Innovation
In some ways, innovation was both a winner and loser in medtech this year. As we dive into the age of the ACA, truly innovative devices that address concrete clinical needs and improve patient outcomes will be the big winners. And some innovative devices did make headway in trials or hit the market this year. But in 2013, innovation seemed to be at a crossroads. Startups—the well from which much medtech innovation springs—struggled from a continued funding drought attributed to such factors as the arduous regulatory environment and the ambiguity around the impact of the ACA. Established companies, on the other hand, were forced to reevaluate R&D budgets to offset the costs of the medical device tax, which went into effect this year.

Although the full picture for 2013 remains to be seen, there was less growth in R&D spending—not a decline, but less growth—in 2012, according to Bruce Carlson, publisher at Kalorama Information. He expects 2013 to end up painting a similar picture. All of these obstacles present significant challenges for the future of innovation, he adds. "How does medtech grow long-term when there could be less money within internal budgets and from investor capital for innovation? How does it secure more ‘hits’ from existing research and development efforts? [How does it] come up with innovative products while there are less funds to put into on R&D. How does medtech retain its reputation and special status as a high growth area in the minds of investors given the high-profile taxes and regulations in the field?" These are the questions that have already kept execs up at night and will continue to cause many more sleepless nights in the coming year.