Outlook: Medtech 2030
Having travelled in Europe in the last few weeks meeting clients and candidates, I wanted to share some reflections with you linked to one key segment in the Life Sciences industry, namely the MedTech sector.
The outlook for the MedTech industry is overall positive, CAGR projections at 5% and expected to reach a value of USD 800 billion by 2030. Macro dynamics influencing the landscape are the US tax moratorium, downward pricing pressure, EU Medical Device Directive 2020, clinical trial regulations and China developing its domestic ecosystem – from IP to RA to commercialisation to value add.
The value chain is evolving and patient compliance, remote diagnosis, wearables, health data and wellness are key drivers. Health care costs are in focus as ever but better care remains a high priority for most politicians and payers. The axiom is “the more healthcare a society offers – the higher the demand will be”. Understanding patient compliance and what influences patient behaviour will drive new business capabilities and the need for new industry talent. For companies, staying ahead means offering value beyond the device and solving healthcare’s problems – rather than contributing to them.
Driven by these pressures, the industry is focusing on reinventing, repositioning and reconfiguring!
- Reinvent: connect better with customers, patients, consumers and payers. HTA and Market Access capabilities must be strengthened as they have been for many years in the Pharma industry. Shift from cost management to added value and invest in enabling technology. Beyond the hospital bed. Philips, Siemens, Medtronic and ZimmerBiomet are examples where this is now a real priority.
- Reposition: new entrants, new technologies and new markets. The value chain is evolving and multiple configurations will exist where every link will need to understand the real user or consumer better than ever before. IP will influence the whole care journey; prevention – diagnosis – treatment – care. Examples of organisations taking the lead are Stryker, Alibaba, J&J, Google and UCLA
- Reconfigure: creating a new B2B play by offering intelligence that promotes self-diagnosis and preventive care, consolidating this with new strategic alliances of healthcare providers, distributors and payers and finally going after a mega play across the value chain. In doing so, some major manufacturers will eliminate the distributors to become trusted healthcare brands and enhance the customer journey. These “mega players” will create new revenue streams and gain share through integrated offerings designed to minimise cost and maximise experience.
Staying ahead in 2030, MedTech will need to focus even harder on their (true) value proposition, invest smartly in new technology and do pilots and test concepts, collaborate more and establish new ecosystems and develop a modular organisational structure to allow for faster decision making and “deal speed”.
Do not let the past dictate your future. Developing an even deeper understanding of the end user will drive the need for new functions, expertise and talent in the MedTech industry. One thing remains though, the three pillars underpinning all of the above are:innovation, access to capital and talent.
Identifying and securing executive talent, people who can adapt and relate to change once it is about to happen will help organisations become true disruptors and differentiators (think Uber, Alibaba, Amazon, Google etc.).
When it comes to global executive talent, The RSA Group has been advising and supporting our clients for close to 40 years helping to shape value propositions and assess international executives to drive better outcomes.