Michael Monovoukas, CEO and co-founder at AcuityMD, provides insights on some potential pitfalls for medtech companies.
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Businesses across life sciences face an increasing number of challenges. From the fear of an impending recession to the difficulties of recruiting and retaining skilled employees; from managing increasing costs and supply chain issues, to mitigating concerns about regulatory changes, there are a wide range of headwinds facing the industry.
For the medical technology sector, the situation is even more complicated. While opportunities to innovate and grow are abundant, there are several pitfalls that companies must overcome to ensure that the road ahead remains smooth. Whether it’s navigating the changing surgeon and site-of-care landscape, value analysis committees, contracting processes, or reimbursement issues, the medtech sector faces a tangle of obstacles that stand in the way of bringing critical innovations to market.
I have spent my career working with medtech innovators and market leaders, and I am optimistic about the future. Despite many challenges, the collective ingenuity of this industry will continue to drive better outcomes for patients. None of us got involved in this industry because we expected it to be easy. Instead, we are driven by a sincere and fervent desire to develop life-changing innovations that improve patients’ lives.
Innovators in the medtech sector rightfully spend enormous resources on research and development in the pursuit of critical breakthroughs. They then go on to spend even more on testing, manufacturing, quality control, and other necessities that help to ensure that their products are safe and effective. Yet despite these arduous and costly efforts, the entire process can often be rendered a failure because of the inadequacies of the commercial tools required to bring these important products to market.
Developing, producing, and commercialising new medical technologies can be a highly fraught and complex process that requires regular interaction with a continuously evolving landscape of stakeholders—from doctors and hospitals to price negotiators like Group Purchasing Organisations and Integrated Delivery Networks; from insurers and payers, to a variety of distributors. It is a process, of course, that is also very expensive. On average, medtech companies spend as much as 40% of their revenues on selling, general and administrative expenses (SG&A).
To get new products out to market, medtech companies need to build and nurture a wide range of relationships and managing a complex set of stakeholders to succeed. Historically, however, the industry has not had the tools that it requires to handle this important part of the process. Instead, medtech companies have been forced to turn to legacy customer relationship management (CRM) software to manually track information. Even when these CRM systems are customised, they fall short of the unique challenges involved with bringing medtech products to market. For example, is a doctor a contact, an account, an opportunity? It's not clear in most CRM systems. The reality is, doctors are doctors, hospitals are hospitals, and the software medtech companies use should understand that.
Without the right software, these shortcomings often compound negatively across the industry. A rural surgeon might be overlooked and not trained on the latest medical innovations. A hospital might overpay for an outdated product. Costly inventory might expire at one facility, while another part of the country faces a supply chain shortage. And, for the rest of us, these inefficiencies are passed on in the form of lower quality healthcare at a higher cost.
When medtech companies have the right tools, the results are powerful. Anika Therapeutics, a global joint preservation company that creates and delivers meaningful advancements in early intervention orthopaedic care, launched Tactoset (a synthetic, biocompatible hyaluronic acid-based bone graft substitute) in 2019. But with the pandemic closing traditional avenues, Anika needed more power behind their sales process. They invested in an industry-specific, commercial platform so their reps could quickly identify and prioritise top surgeons. The software helps both experienced and new team members track surgeons’ competitive interactions, educational backgrounds, publications, and clinical practices. With this information, Anika was able to deploy a detailed and specific roadmap for prioritising their selling efforts, identifying over 500 surgeons for a robust target pipeline.
“Tactoset is a key regenerative technology for Anika in a $100 million + addressable market,” said Ben Joseph, vice president of commercial and corporate development at Anika. “We needed to unlock the full commercial potential with a specialised tool offering analytics, information, and procedural insights. We’ve now expanded use of the solution to include our full joint preservation portfolio.”
Medtech companies like Anika do extraordinary, lifesaving work. Each year, the FDA approves approximately 6,000 new devices, each with the potential to make a difference in the lives of patients in need. Medtech innovators deserve to have the tools and technology that will help them accelerate access to their products. We would be rightfully shocked and horrified to see a surgeon operating with instruments that they acquired from a hardware store. Why, then, should we expect medtech companies to take their innovations to market using tools that were designed for other industries? The software supporting the medtech industry needs to improve to meet the industry’s complex needs. We must help the industry innovate and accelerate access to new medical technologies.
