What are the Leading Transformers and Disruptors for the Global Medical Device Industry?
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What are the Leading Transformers and Disruptors for What are the Leading Transformers and Disruptors for the Global Medical Device Industry?the Global Medical Device Industry?
Venkat Rajan,
Industry ManagerIndustry Manager
Advanced Medical Technologies
April 4, 2013
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Today’s Presenter
Venkat Rajan
Industry Manager -Advanced Medical Technologies
Frost & Sullivan
•Oversees analyst team charged with tracking the advanced medical
technologies industry, spanning medical devices, medical imaging, and
patient monitoring.
•Provide market intelligence solutions to help clients across the supply
chain spectrum to identify market opportunities and develop strategies
tailored to their business goals.
•8 + years of market intelligence gathering and custom consulting
experience
Five Signs A Medical Technology Company Might Need to Reinvent its Business Model
Eroding Customer Value Proposition
Profit Model Under Pressure
•Business exposed to technology obsolescence, due to new advances.
•Customers view its product/services as commoditized.•Customers see limited differentiation between available devices.•Diminished customer enthusiasm for new product upgrades.
•Declining YOY margins.•Competitors going out of business, consolidating, exiting market.•Significant internal cost cutting necessary to maintain viability.
Market Disruptors •Business exposed to technology obsolescence, due to new advances.•New technologies capable of providing comparative product/service value either cheaper, faster, simpler, or to a broader addressable customer base.
Market Disruptors on the Horizon
•High employee turnover rates, due to career apathy.•Strategy focused on maintenance as opposed to expansion.•Team slow to adapt and/or innovate.
Internal Infrastructure Deteriorating
•Limited VC/investment buzz for market and its future.•Limited academic curiosity and interest in advancement.•Public companies struggling to maintain stock price.
Investment Dollars Flowing in
Opposite Direction
Three Big Predictions for 2013
2
Patient influence in treatment selection magnified due to, increasing
access to information and greater shifts in financial burdens. The launch of
health exchanges and rollbacks in employer covered plans could lead to
1Hyper pressurized cost containment environment is likely to accelerate
deeper cost cutting measures from companies adjusting to realities of the
new market place.
Source: Frost & Sullivan analysis.
2health exchanges and rollbacks in employer covered plans could lead to
greater striation of coverage into distinct tiers.
3
Emerging market needs drive decision making for companies around M&A
strategy and product development. In the past complications of the HC
system, financial resources, and on the ground infrastructure required;
prevented companies from fully investing in emerging market strategies.
Core Segments Under Pressure
$342 B Global Medical Technologies Market Sector Share
Medical Devices Market: Segmentation by Product Class, Global, 2012
Ortho
14%
Cardiology
Other (Including:
Durable Medical
Equipment,
Hospital
Supplies,
Consumables)
29%Treatment
Other
28%
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.
Cardiology
11%
Woundcare
6%
Minimally
Invasive Surgery
11%Opthalmology
10%
Audiology
6%
Uro-Gyno
2%
Aesthetics
2%
Respiratory-
Anesthesia
5%
Robotics-
Navigation
2%
Neuro
2%
29%Treatment
Devices
72%
Opportunity Paradigm Matrix for Medical Devices
Market
Expanding
Bioresorbable Stents
Breast Repair
Blood Vessels
Transcatheter Valves
Renal Denervation
Bronchial Thermoplasty
Radiosurgery
Neurostimulation
Bionic Limbs
Bionic Eye
Robot Assisted Spine Surgery
Mental Rehabilitation through Video Games
Wearable Monitoring
Heart Sleeves for CHF
Remote Symptoms Monitoring
Personalized Medicine
Health Management Apps
Source: Frost & Sullivan analysis.
Market Opportunity
Mature
RehabilitateRehabilitate RepairRepair ReplaceReplace RegenerateRegenerate
Dialysis
Drug Eluting Stents
Joint ReconstructionBMPs
Skin Substitutes
Mechanical Valves
Neurostimulation
Cardiac Surgery
Surgical Tools
Implantable CRM
Home/Portable Hemodialysis
Pain Stimulators
Resistance Equipment
Corrective Eye Wear
Hearing Aids
Monitoring
Technology Convergence in Medical Devices
Medical Device Connectivity
Nanotech Advances
Flexible electronics and displays currently being developed for
Devices leveraging long and short range wireless communications, cloud computing, big data analytics, and information security for enhancing care.
Nanotechnology provides benefits of biocompatibility and functionally
at an unparalleled scale, that is better able to influence diseases
happening at a cellular level.
Flexible commercial electronic devices, have tremendous applications for
hospital care settings .
Flexible Electronics
Augmented reality devices which can overlay information and images
via smart glass technologies could have tremendous applications in
improving clinical workflow.
Augmented Reality
As the cost and size of 3D printing technologies continues to become
more scalable to healthcare settings, they have the potential to produce
customized implants, surgical tools, and bioprinted tissues..
3D Printing
Emerging Markets Driving Growth
�Established markets (U.S., Western Europe,
Japan), saturated and project single digit
growth for the next decade.
�Navigating complexities of HC markets in
China, India, and Brazil have proved
challenging for developers.
�Outside of BRIC nations, other highly
Medical Technologies Market: Percent of Revenue by Region Global, 2012
United States
42%Russia
2%
Spain
2%
Brazil
1%India
1%
Other
20%
�Outside of BRIC nations, other highly
targeted countries include Australia, Turkey,
Indonesia, Malaysia, and Mexico.
�Tactics focused on major cities and regions
not countries have proved most impactful.
Source: Frost & Sullivan analysis.
Note : All figures are rounded. The base year is 2012.
42%
Japan
9%
Germany
8%
China
7%
UK
4%
France
4%
2%
Shifting Strategies in Global Market Place
Companies
shifting
resources to
capitalize on
emerging
markets and low
cost
manufacturing
abroad.
Tax incentives
that built Ireland
in to a med tech
hub, could be
copied in other
parts of the
globe.
Prioritization of
Turkey for many
companies is
equal if not
Israel has
proven to be a
hub for research
and innovative
start up
companies.
Pacific Rim emerging
as a destination for
medical tourism, and
China has become a
critical battle ground for
companies against both
established
multinationals and
emerging local players.
Source: Frost & Sullivan analysis.
Note : All figures are rounded. The base year is 2012.
Local
manufacturing
presence critical
to market
penetration in
LATAM.
equal if not
higher than
certain BRIC
nations.
medical tourism, and
a hub for contract
manufacturing.
India has proved
more utility as a test
lab for ‘built in built
for’ approaches than
true market returns.
Skilled workforce
could create more
opportunities for
outsourced
manufacturing.
Patient demographics,
economy, healthcare
infrastructure, and
regulatory pathway
make Australia an ideal
focus point for
launching products
prior to US FDA
approval.
Growth in South
Africa leading to
major
opportunities.
The Med Tech CEO’s Perspective
2Innovate, but innovate differently. Shifts
in healthcare spend change the factors
impacting market traction.
1Cutting costs and management of
internal resources is more critical to
market viability than growing top line.
3Overhaul sales strategies to optimize
for a consolidated customer base
driven by outcomes and value.
4Maximize emerging market strategies
by targeting regions and cities not
countries.
5Leverage increasing role of patient in
determining treatment selection and
burden of pay for healthcare services.Source: Frost & Sullivan analysis.
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