The global medical devices industry is undergoing a major transformation in business models, technology adoption, and care delivery approaches, according to Frost & Sullivan’s recent analysis, “Global Medical Devices Outlook.” The digitalization of medical devices encourages medtech players to deliver value for providers and patients with devices and digital data. MDB spoke with Frost & Sullivan’s Suchismita Das, Healthcare & Life Sciences Senior Industry Analyst, and Siddharth Shah, Research Manager, for their insights on this transformation.
MDB: Which medtech industry segments would benefit from developing new business models?
Das: Broader industry implications have led to a demand for new business models across the medtech industry. “Labor shortage” and “supply chain disruptions” have become the top challenges for hospitals and healthcare facilities across the globe. Moreover, the rapidly increasing costs for hiring and retaining staff are posing serious financial pressures on facilities. These are driving hospitals to seek, adopt, and implement operational and clinical efficiency solutions. But all this means is that medtech companies, as probably the biggest vendors for hospitals, must work with these hospitals on new pricing models for capital equipment, on developing and offering efficiency solutions as value-add features with their products, and possibly also step outside their comfort zones to offer digital efficiency solutions — if you think of what Philips and GE Healthcare are doing with their platforms — HealthSuite and Edison, you get the picture.
In terms of specific specialty areas, with the help of implantable sensors in advanced smart knee implants such as Zimmer Biomet’s Persona IQ, enhanced remote monitoring and motion detection is enabled that enhances clinical outcomes. This technology can also aid in incorporating predictive analytics to contribute to evidence-based recommendations to improve patient care.
In the last few years, surgical robotics emerged as a breakthrough technology in the therapeutic devices segment. There’s a lot that’s happening here — market leaders such as Medtronic and J&J have invested efforts in in-house development as well as in high-value acquisitions to build out surgical data platforms (Verb Surgical even termed it Surgery 4.0 in its initial days) — where robotics is the core component but supported by visualization and navigation solutions (inclusive of even augmented/virtual reality), and data analytics, as well as newer capabilities using AI. Intuitive is the undisputed market leader, but challengers abound — all powered by data/digital capabilities.
Shah: Perhaps no other area has seen as much digitalization as cardiology — from remotely monitoring heart health (wearables like Apple, as well as the medical-grade iRhythm Zio patch), to solutions that help clinicians with AI capabilities for analyzing vast amounts of ECG data, to even HeartFlow type solutions that help build patient heart models for analyzing blood flow and issues in a matter of a few minutes vs. 30–40 minutes required by specialist doctors — almost every aspect of cardiology is being digitalized. Almost every aspect of patient monitoring data is by default digital today (the machines acquire and display data digitally). The power, which has been recognized by all stakeholders, is to collect and analyze data and can be leveraged for predicting deterioration in advance (early warning scores, Rothman index) — which alert clinicians in advance for corrective measures.
Just like cardiac conditions, other chronic disease areas (e.g., COPD, asthma) are also experiencing digitalization. With CGMs and finger-prick glucose meters being digital, the data can be logged and analyzed on smartphones — and software and combined with wearables data to track activity/exercise, user-fed data on meals, insulin dosing (manual, or with smart digital insulin pens) etc. to help establish each diabetics’ individual profile and help tailor their own “behavior management” to guide better health.
MDB: What types of M&A are most advantageous to achieve or accelerate progress toward these goals?
Das: Deals for product portfolio expansion witnessed a considerable rise over the last 2–3 years, with cardiology registering the maximum number of deals of this nature in 2020. The primary care segment, which is concentrated in the U.S. market, has registered most of the acquisitions for geographic expansion in 2021. To regain their pre-pandemic revenue share, several companies focused on enhancing their existing product portfolio in 2021 by acquiring the latest innovations and technological solutions or strengthening their market position by acquiring the relevant startups. Acquiring start-ups is also an efficient way to reduce or eliminate competition.
Shah: Partnerships are the bigger opportunity in 2022, and unconventional ones are the flavor of the season. If you only look at GE Healthcare’s global partnerships, this is revealed. Just a selection of their partnerships: with Boston Scientific for interventional cardiac care in the APAC region (Jan 2022) and with Medtronic for the U.S., for outpatient/ambulatory surgery centers (Apr 2022). Two medtech giants partnering together isn’t unusual, but neither is it that common. And to do so in just a year — that’s interesting! M&As do also help. We have seen two types:
- Tech-based ones to enhance the value of existing solution (like Enovis Medtech/DJO acquiring Insight Medical for AR/VR system).
- Those serving broader customer needs, e.g., ResMed acquiring Medifox in Germany for $1 billion. But it almost feels like most of the M&A activity in medtech was centered more around reshuffling of portfolios than digital initiatives so far.
But which ones would make more sense? I like to think of it as those fulfilling the core objective: serving the customer needs. Think Philips acquisitions of Capsule (interoperability), of Cardiologs and Biotelemetry — serving the entire ‘care continuum’ for cardiac care with RPM and AI based analysis capabilities. Combine those with Philips’ in-house capabilities and the HealthSuite platform, and you have a powerful solution that does some end-to-end work in the care continuum.
Editor and Director of Medical Content