MedTech companies that want to evolve beyond their traditional product supplier role to become a value-driven, strategic business partner to their hospital customers will need to undergo a multifaceted transformation that addresses six success factors. We have continued to track that impact. In our experience, it is advantageous to start with sales-oriented use cases, such as building a remote-selling capability for a specific customer segment. Glenn leads Deloitte LLP's Medical Technology practice with more than 25 years of experience in medical technology, biotech, and specialty pharmaceuticals. 5 medtech trends to expect in 2023. The same report estimates the wearable market will reach upwards of $60.4 billion by 2027. Yet, despite many executive-level conversations, stacks of white papers, and countless conference sessions, VBC contracting in MedTech remains largely stuck in the mud, even as it gains traction in the broader health sector. Standard Bariatrics has been growing its market share through a new approach to bariatric surgery that cuts down on operating times and provides procedure standardization for improved outcomes.7. Throughout the 2010s, the medtech industry maintained its solid financial performance year after year. Surgical robots are by far the leading category among robotics used in healthcare. The health care ecosystem is undergoing unprecedented changes, compelling MedTech manufacturers to rethink traditional commercial models. We hope you learned something new from this list of 7 medical technology trends for 2023-2027. This article is a collaborative effort by, How Japans medtech leaders can use M&A to create a competitive advantage. By contrast, those with projected growth rates below 10 percent traded at less than four times revenue. - 2023 PwC. To build an omnichannel model, the firm ran a series of tests on smaller accounts, which were not well-served by field sales reps. (See A Company Unlocks $5 Billion with a New Commercial Model.). The Rise of the Next Generation of Medtech "Milkmen" Early pioneers have seen highly promising results and are already shifting massively to this new way of working. The Medical Design Excellence Awards 2018 finalists demonstrate trends toward patient risk reduction and faster, more-efficient healthcare delivery as well as connectivity and user-focused, consumerized healthcare. It subsequently rolled out the solution globally, starting with its home market in the US.The company took several measures to realize its ambitions, which might also serve as inspiration for others.It generated deep insights to design the future customer journey. It also included central buyer overlays, such as hospital groups and general purchasing organizations, in addition to regional and national decision makers. But remains above pre-COVID levels (66% growth in 5 years). And looks like telemedicine is a medtech trend that will continue even as things get back to normal. Here are the top MedTech digital trends that can't be ignored in 2021, from our Veeva industry experts. Because remote sales teams dont meet customers in person, they instead depend on the flow of leads from marketing, along with technologies such as data analytics, next-best-action nudges, self-dialers, virtual-demonstration kits, automated call reporting, AI-supported coaching tools, and other similar solutions. Cultivating a sustainable and prosperous future, Real-world client stories of purpose and impact, Key opportunities, trends, and challenges, Go straight to smart with daily updates on your mobile device, See what's happening this week and the impact on your business. According to a Jabil Digital Health Survey Report, 52% of digital healthcare decision-makers are developing or plan to develop wearable devices. Ecosystems build on the capabilities required for product-enabled services, but the involvement of many diverse players drives increased complexity and requires more sophistication across strategy, development and execution. Build required digital enablers along the way. Moreover, many experts claim the use of robotic technology is especially useful during COVID-19 as it helps to decrease human-to-human physical contact. A successful commercial model transformation needs to be rooted in an actionable growth strategyone that prioritizes the right market segments, determines how to win in those targeted segments, and helps company leaders tailor the commercial model accordingly. 960 were here. Customer centricity supports corporate performance in two ways. However, once companies have experienced this kind of agile approach, they do not want to return to old ways of working. However, 3D printing is commonly used for rapid prototyping. The authors are especially grateful to their current and former BCG colleagues Anna Heikkurinen, Clara Beck, Laure-Anne Deltort, Gian Gallati, Laura Hansmann, Angela Kaiser, Fabrice Kalmbacher, Patrick Kessel, Lorenz Kunze, Nikola Lampe, Naomi Meertens, Malavika Raju, Cristina Rolandi, Mikaela Srman, Linda Spahiu, Beate Steen, Maxime Ueberschlag, Ville Vilkuna, and Karin Zhu for their contributions to the research and analyses contained within this report. 3. Executive leadership hub - Whats important to the C-suite? 2023. Over the past 30 years, the R&D Vintage Indexa widely used industry metric that measures R&D output by dividing incremental revenue for a given year by average R&D spending for the previous five yearshas declined from more than 3.0 in the 1990s to 2.2 in the 2000s and to 1.5 in the 2010s. They must also take into account the rapidly changing healthcare ecosystem and the transformational effects of the COVID-19 pandemic, including supply chain disruptions, healthcare staffing shortages, shifting care settings and the rapid uptake of digital health solutions. For example, a medtech company that makes a great surgical implant may increase growth by extending the impact the product makes on the customer in non-traditional areas across the care pathway. It built a dedicated data layer in its tech architecture and created a data analytics team to focus on concrete business use cases, such as demand sensing during the COVID-19 crisis, next-best-action nudges for sales reps and frontline sales managers, 360-degree strategic account management, and AI-powered integrated business planning.Overall, this series of agile sprints substantially increased the companys sales growth and reduced the costs of its commercial model. The results leave no doubt about the opportunity: there is a massive gap between companies current capabilities and aspirations. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. He helps clients grow through organic and in More, Consulting services and solutions to help advance medical technology transformation, Medical technology advances lead to evolution and innovation. You can never win by forcing the sales force to change. Article How medtech companies can create value with new-business building Could M&A and divestitures reset the. Each medtech companys path to growth can draw from any or all of these strategies. While you're here, make sure to sign up to our weekly newsletter. The time to act is now. With a forecast CAGR of more than 23% from 2020-2026, VCs have been especially interested in the telehealth sector. Training even one physician or care team in novel diagnostic paradigms, processes for selecting patients, and procedural workflows can take months. The transformative actions we recommended in our first milkman publication eight years ago are still highly valid. But the legacy businesses in the portfolios of large medtechs tend to distract them from these markets. Digital marketing offers medtech companies powerful ways to - LinkedIn In fact, 76% of US consumers report that they are interested in using telehealth in the future as a way to complement in-person visits to the doctor. J Arthroplasty. From telemedicine to 3D bioprinting, let's dive into the list of medtech trends creating new opportunities in this dynamic industry. Josh Copp is a partner in McKinseys San Francisco office; Colin Field-Eaton is a partner and Gerti Pellumbi is a senior partner in the Washington, DC, office; Ari Perl is an associate partner in the New Jersey office; and Tommy Reid is an associate partner in the Austin office. The medtech sector grew in 2022 and I expect that growth will continue, and possibly accelerate in the year ahead. 3 Stocks in Focus on Evolving MedTech Trends Amid COVID-19 In that way, companies can build a foundation to test the impact of additional use cases like digital marketing or sales analytics, and thus build momentum for a broader transformation. Successful management of the ecosystem requires setting rules and developing standards for participation, managing quality and confirming that the value proposition continues to be realized. Searches for telemedicine spiked in the spring of 2020. Most of these companies have maintained the attributes that make them attractive targets for larger acquirers: healthy growth prospects, well-stocked innovation pipelines, and portfolios ripe for acceleration through larger commercial engines. For example, it can turn a CRM system from a perceived administrative burden to a powerful support toolthe equivalent of a jet cockpit with all the right flight instruments, navigation support, and even an autopilot. Telecommunications, Media & Entertainment, Digital Surgery and MedTechs: Three possible future vectors, Value-based contracting is gaining traction, Medical technology trends toward six winning roles, Do Not Sell or Share My Personal Information. MedTech Industry Trends | Deloitte US This has led to revolutionary insights for a few early movers that are already shifting massively to this new way of working. Analysts consensus on five-year forward CAGR, from S&P Global Market Intelligence. We have found ethnographic researchconducted by shadowing customers in their daily workto be particularly valuable in this phase. Deloitte leaders discuss MedTech industry trends, challenges, and opportunities in a changing health care marketplace Rapid health care market changes are challenging MedTech industry stakeholders to evolve and expand their current product supplier role to thrive in the Future of Health. Leaders face an uncertain landscape. Medtech offers a compelling value proposition for investors. Seven predictions for healthcare technology trends in 2022 concluded that the industry was relying on an outdated model of frequent in-person visits by sales reps to physicians, which we called the milkman model. In fact, 76% of U.S. consumers reported . According to Statista, the Medtech market is worth approximately $19.65 billion. Again, we started measuring total shareholder return from six months after the kickoff of such programs for a period of five years. We have received your information. Published Jan. 29, 2021 Greg Slabodkin Senior Editor Adeline Kon/MedTech Dive The calendar signals a new year but the medtech industry in 2021 will feel the lingering effects, both positive and negative, from the global coronavirus pandemic. Although both the pharma industry and the medtech industry have been sculpting their inorganic portfolios over the past four decades, in the past five years activity among medtechs has fallen while pharma companies steamed ahead. The FDA are updating regulations to reflect advances in AI. In two critical areasleveraging next-generation channels as well as IT and digital enablersrespondents gave their companies only a basic rating. Most importantly, services development requires a very different approach than product R&D. As a result of these shifts, we believe the industry can again see portfolio activity as a critical value creation lever. 2022 has been a challenging year for M&A in the pharmaceutical and life sciences sector. Most do not yet have the capabilities in place to develop and implement a next-generation, omnichannel commercial modelbut they have become fully aware of its potential. To stay logged in, change your functional cookie settings. But if you capture their hearts and minds, there is no stopping them. With vision, the industry can increase the number of truly new products and solutions that improve outcomes and lead to customers overall success. Medtech offers acompelling value proposition for investors. This increase was fueled by Asia-Pacific transactions, which accounted for 45% of global deals, the largest share, as investors targeted local manufacturers. Bone Joint J. For innovations that create new procedures or standards of care, such as transcatheter valve replacements, the road gets longer and steeper. TiE Toronto's 18th annual business venture competition, TiEQuest, is now accepting applications for all eligible early-stage companies, start-ups and entrepreneurs. Searches for Teladoc Health have increased by 83% over the past 5 years. These changes are creating big opportunities. The challenge to connect with customers remotely has shed new light on the potential of a next-generation, omnichannel commercial model. Here are three trends to watch: Technology companies: The lines between medical devices and consumer-targeted health devices are blurring. From 2016 to 2019, at least one portfolio segment in 27 of our samples 30 large diversified medtechs was growing at less than 3 percent CAGR. https://www.fda.gov/medical-devices/pma-approvals/devices-approved-2021. To master the care setting, companies are combining their expertise, experience and product portfolios in ways that generate increased value, better outcomes and brand loyalty for surgeons and patients. PDF New Trends and Issues Proceedings on Humanities and - ResearchGate Search volume for additive manufacturing has shown consistent positive growth (304%) over the last 10 years. The authors are grateful to their current and former BCG colleagues Erik Adams, Stphane Cairole, Victor Corzo, Torben Danger, Christophe Durand, Anders Fste, Tammer Farid, Colm Foley, Stuart Gander, Erik Gilbertson, Benjamin Grosch, Dan Grossman, Henri Hagenmller, Charles Hendren, Sultan Hochweiss, Jason Jager, Hrvoje Jenka, Frank Jia, Nicolas Kachaner, Meg Kedrowski, Torsten Kurth, Bob Lavoie, Sam Karita, Wyatt MacKenzie, Brad Martens, Shogo Nishida, Johan berg, Barry Rosenberg, Daniel Schroer, Christoph Schweizer, Carla Sprle, Vaidyanathan Srikant, Johannes Thoms, Sahil Sanghvi, Mills Schenck, Simon Vller, and Gerd Wbbels for sharing their medtech expertise during the development of this report, conducting senior-management interviews, and helping us engage with their clients. Define the problem(s) you are solving and identify the partners who can help solve them. VR startups in the healthcare category have attracted attention from major players. Develop a balanced ecosystem business model. BCG was the pioneer in business strategy when it was founded in 1963. Accelerating growth in medtech: The next surge in portfolio moves. Digital transformation in the MedTech industry - Deloitte US Medtech and Pharma Sales Go Virtual | Bain & Company expectationsbut common misunderstandings can delay progress. A company with $10 billion in sales must generate $500 million to $600 million of new revenue every year to keep pace with market growth. Commoditized products, in contrast, provide less of a differentiation angle to talk about. Products like the Apple Watch, which is still growing, helped create initial awareness of ongoing health tracking. While the margin and investment profile of services differs substantially from that of products, there are often significant advantages, including faster development cycles and more rapid implementation of new capabilities that expand the value to customers. Companies can use an end-to-end, digitally enabled omnichannel approach to help customers discover and successfully use their products and solutions. Our initial study (Fixing the Medtech Commercial Model: Still Deploying Milkmen in a Megastore World?) In 2016, analysts consensus growth estimate for these companies was 11 percent CAGR; by 2022, it had topped 17 percent. The winner takes home a cash prize of $50,000, $100,000 in kind prizes and the opportunity to receive up to $250,000 in investments. Pharma companies divested more than $10 billion of total enterprise value in four out of the five years from 2016 to 2021; medtechs topped $1 billion only in one year. With high barriers to entry, sophisticated technology innovations, and substantial clinical and nonclinical unmet needs to address, the industry looks set for a future of profitable growth. Which marked it as the largest VC deal for a biometric wearable in Q1 2020. Our Insights | Life Sciences | McKinsey & Company 2. Its QuantX product helps radiologists reduce false diagnoses when diagnosing breast cancer. Our research has shown the high aspirationsand low starting pointmedtech companies have in building the related capabilities. Bernard Ross, CEO and Founder of Sky Medical Technology, shares his views on the direction of travel of the healthcare industry looking to 2023 and beyond, and the role medical technology (medtech) will play. The Five Biggest Healthcare Tech Trends In 2022 - Forbes Surg Endosc 2022 Aug;36(8):6285-6292. Over the past three decades, the industry has outpaced the S&P index by almost 15 percentage points, with stellar periods in the early 1990s, mid-2000s, and late 2010s.