By Nick Haluck
With a mix of investors, industry veterans, and entrepreneurs, WSGR’s Medical Device Conference in San Francisco underscored several forces shaping the future of the medical device industry, from evolving corporate investment strategies to innovative collaboration models and the growing influence of tech in medtech. The panel discussions reinforced several themes that have been redefining the industry.
Shifting from Products to Solutions
Device companies seeking investment or market adoption must move beyond singular great product concepts to provide comprehensive solutions that deliver both clinical and economic value. For some strategic investors, this means rolling up several products into a portfolio that surrounds a particular disease state, offering services and devices along the entire patient journey. For tech-enabled products, this means developing a deep understanding of the clinical workflow and designing a solution that provides reliable, actionable insights to decision makers within that workflow to improve outcomes or provide more cost-efficient care.
Proving Economic Value
Companies are beginning to understand the importance of having a clear economic value proposition from the outset and building evidence in parallel with product development. As some struggle to bridge the gap between clearance and coverage with a compelling economic value story, pioneering payer and provider networks have created innovative programs to access new technology while offering a real-world proving ground for emerging technologies. Debra Reisenthel, CEO of Palo Alto Health Sciences and past client of Health Advances, shared how her company’s Freespira device is illustrating its value in patients with panic disorder in the VITAL program, a collaborative innovation program sponsored by Highmark Blue Cross Blue Shield and its major provider system, Allegheny Health Network. The program sponsors pilot studies using cleared but unreimbursed devices that can drive affordability, accessibility, simplicity, and quality within the payer/provider network, with an emphasis on devices that can move toward a cure or prevention in conditions for which the cost of symptom management is relatively high.
Tailored Commercialization Strategies
There is no one size fits all commercialization strategy for emerging medical device companies. Greg Casciaro, former CEO of Access Closure and past client of Health Advances, joined other veteran industry executives to outline considerations when charting a course through the commercialization lifecycle. As product selection decisions are increasingly made in the carpeted areas of hospitals, a smaller set of more skilled and expensive professionals may be required to deliver a complex value message to executives. As the product matures, the commercial model may evolve as it grows to include more traditional sales professionals that can build upon initial traction. The decision between building a sales force and using distributors can be complex and may be driven by the non-compete agreement dynamics of the product category or the exit plan of the company for those looking to be acquired.
Changing Face of Medtech Investors
The influence of technology on the industry permeated the panel discussions, product concepts, and the types of investors present at the conference. While there was no shortage of traditional medical device venture capitalists and strategic corporate investors, there was also a healthy contingent of professionals from traditional tech companies. These investors are driving development of products that blur the lines of devices, technology, and services with ambitious goals in patient engagement, remote monitoring, and clinical decision support, among others.
Nick Haluck is a Consultant at Health Advances
Opinions expressed here are solely those of the authors and do not reflect the views of Health Advances LLC, its management, or affiliates