The tightfisted, traditionally blue chip industry of medical technology was beset on all sides by daunting hurdles this past year. First, there were the mounting pressures of consumerization and globalization. More people in more places needed treatment, and it’s harder than ever to get it to everyone soundly and quickly. Next there was mHealth, the burgeoning movement that incorporates smart phones as conduits for health service, documentation and information (it was only a matter of time, anyway). But these are just the tip of the iceberg. A dark cloud of uncertainty looms, and more than ever, the name of the game is adapt or die.
In the United States, companies also wrestled with Obama’s Affordable Care Act (ACA), the new medical standard that seeks to minimize health care costs by emphasizing outcome-based care. The medical device manufacturing industry especially felt cornered as new taxes and rules sprang up. Death knells for electronic device production plants around the country rang incessantly, even for the nation’s most prominent companies. Even more troublingly, the longitudinal impacts of the new taxes have yet to be seen. Their suffocating grasp on research and development budgets will only start to surface in the coming years.
Newcomers into the medical device production scene further shifted the sands of the landscape. Tech giants Samsung and Verizon geared up to snatch a piece of the pie as they venture into the realms of mHealth, big data and health IT, designing sleek patient-side apps that are making established companies start to sweat.
“Medtech companies need to embrace innovation techniques we call ‘fast, frequent, frugal failure,’ while also making sure they protect their core business,” says James S. Varelis, principal at PwC pharmaceuticals and life sciences. “That’s a tricky balancing act, one that requires an ambidextrous approach to driving the business.”
But the year wasn’t all trials and tribulations for the industry. Many individual markets, such as those behind knee, hip, spine and cardioverter-defibulators (devices that detect and warn of life-threatening cardiac irregularities) saw unexpected surges in sales. Further, cutting-edge advances in 3D printing also wowed the public and medical officials alike as a new era of manufacturing grows into its toddler stages. Other breakthrough devices include Medtronic’s first-generation artificial pancreas and Abbott’s MitraClip, a device that improves blood flow through the heart. Both were greenlit by the FDA.
The last 12 months were anything but predictable for medtech. While many obstacles await on what will prove to be an inevitable technological, political and legal rollercoaster, opportunity is abound for companies willing to try new things and explore new options. As Benjamin Franklin so famously said, “nothing in this world can be said to be certain, except death and taxes.” Thanks to constant revolution and innovation of medtech, we can at least defer one of these nuisances.
