Innovation is alive and well at this year’s AdvaMed conference. While it’s clear that medical device innovation in the United States has taken a hit, there’s important advancement happening around the development of new business models.

September 28, 2011

2 Min Read
MedTech 3.0 is About Nontraditional Partnerships and a Changing Customer Base

By Tricia Rodewald

Innovation is alive and well at this year’s AdvaMed conference. While it’s clear that medical device innovation in the United States has taken a hit, there’s important advancement happening around the development of new business models. 

medtech3_0_handshake.jpgThe next evolution of the medical technology industry—medtech 3.0, if you will—focuses on collaborative, nontraditional partnerships and a changing customer base.

In a panel discussion with top industry leaders from the pharmaceutical (J. Alan Butcher, Endo Pharmaceuticals), medical device (Darrell Johnson, Medtronic), healthcare (Arnaud Bernaert, Philips), and private equity (Ali Satvat, Apax Partners) sectors, it was emphasized that the ways of doing business in the medical technology space are quickly changing.

One example given is that more and more medtech companies are partnering with pharmaceutical and IT companies to enhance their service offerings. During the eras of medtech 1.0 and 2.0, companies focused predominantly on products.

There’s also a significant power shift in the sales model. Selling directly to consumers is the new direction of the medtech industry.

The business models of medtech 1.0 and 2.0 also focused on selling to hospitals, nurses, doctors, and administrators. In a medtech 3.0 world, technical, medical-type clinician personalities are unlikely to be the best information deliverers.

How this shift (selling directly to payers) will be implemented is uncertain, but as those in the pharmaceutical industry know, it can be done. Nontraditional strategic partnerships and collaborative business models will play a significant role in navigating industry through the murky waters of implementing these business model changes effectively and compliantly.

For everyone in medtech, the 3.0 business model development is definitely about hedging bets and taking a leap of faith. But in order to stay competitive, viable, and valuable, it’s a critical leap to take.

Tricia Rodewald is director of marketing and strategic alliances at Pro-Dex Inc.

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