Christopher Delporte, Editorial Director04.02.14
We look for the business, technology and regulatory forces shaping the sector’s progress and possibilities, which we then can dissect and disseminate in an effort to, we hope, make your jobs a little easier. So, when we find some solid insight, we’re eager to vet it and pass it along.
You might say that Terry Hisey knows a thing or two about the life-science business. As vice chairman and principal of consulting giant Deloitte LLP, the leader of the firm’s U.S. Life Sciences Sector, chairman of the Life Sciences Advisory Board for Deloitte Research and steering committee member for theDeloitte Center for Health Solutionsin Washington, D.C., he’s made a career of advising companies, government and other industry stakeholders about strategy, technology improvement and process performance.
In a recent interview/blog on the Deloitte website, Hisey shared some of his thoughts about what’s on the horizon for the medical technology sector in the near and long terms. He’s bullish about prospects for the future, but cautions that companies need to understand that the “landscape is also changing” in ways we haven’t seen before, and medtech firms need to understand the “disruptive forces in play.” The medical device tax, tighter reimbursement and regulatory pathways continue to be concerns, but what’s really going to be transformative is a little more downstream than the medical device industry’s traditional challenges.
“Physician-hospital consolidations are growing in frequency, and combined purchasing departments are growing in influence, which may reduce life-sciences companies’ negotiating power,” Hisey said. “In addition, providers and health plans are now armed with a more comprehensive fact set than in the past to inform their evaluation of life-sciences products.”
Drug and device manufacturers will face a “fact-based messaging future,” he said. “It will be important to have a strong program in place to access meaningful, robust, real-world evidence from the marketplace and clinical delivery organizations,” Hisey noted. “Companies will require strategies to inform decisions across the life-sciences value chain—ones that recognize shifting purchasing patterns and enable conversations around a product’s clinical, safety and economic impact. The true hurdle is adoption, not just product approval, so articulating a clear value proposition will be imperative.”
Calling it a “shifting ecosystem,” Hisey explained that this change also generates talent issues for life-sciences companies. To thrive, organizations will need institutional and individual capabilities in
advanced analytics, population health management, market trends and customer segmentation, and account management to “deal with more powerful/non-clinical buyers.”
He urges organizations to go beyond the product or service, adding that innovation and growth across the value chain can take many forms, including employing new commercial models; pursuing growth through non-traditional external relationships; increasing value-based contracting; using alternative distribution channels; executing work more cost-effectively; and “defining a value proposition beyond the pill or the device” (for example, being a care management partner independent of a product).
“Improving the return on investment for life-sciences research and development will continue to be an important focus for companies seeking both innovation and growth, especially when developing alternatives to existing, in-line therapies,” Hisey wrote. “Asking the right questions, conducting clinical studies and accessing big data can support an honest evaluation of the ability of products in a company’s pipeline to dramatically improve outcomes and/or safety profiles, shift purchase patterns, lower prices and address unmet needs.”
This kind of insight may result in the decision to move forward only with technology that will clear the dual hurdles of U.S. Food and Drug Administration approval and marketplace adoption.
This shifting ecosystem certainly is uncharted territory for most orthopedic firms, but it’s also an opportunity for outsourced manufacturing and service providers to help solve this new value equation.
For years, the discussion has been about creating true partnerships with OEMs—to help increase their efficiency, speed time to market, and provide much-needed full-service resources that allow device firms to focus on responding to evolving market forces. That’s true today more than ever, and it’s more than a marketing tagline. The more that contract manufacturing companies understand about their partners’ needs and trials beyond just providing a particular talent, product or service, the better the odds are that both will prosper.
That kind of synergy would be truly (and constructively) disruptive.
Christopher Delporte
Editorial Director, Medical Devices
cdelporte@rodmanmedia.com
You might say that Terry Hisey knows a thing or two about the life-science business. As vice chairman and principal of consulting giant Deloitte LLP, the leader of the firm’s U.S. Life Sciences Sector, chairman of the Life Sciences Advisory Board for Deloitte Research and steering committee member for theDeloitte Center for Health Solutionsin Washington, D.C., he’s made a career of advising companies, government and other industry stakeholders about strategy, technology improvement and process performance.
In a recent interview/blog on the Deloitte website, Hisey shared some of his thoughts about what’s on the horizon for the medical technology sector in the near and long terms. He’s bullish about prospects for the future, but cautions that companies need to understand that the “landscape is also changing” in ways we haven’t seen before, and medtech firms need to understand the “disruptive forces in play.” The medical device tax, tighter reimbursement and regulatory pathways continue to be concerns, but what’s really going to be transformative is a little more downstream than the medical device industry’s traditional challenges.
“Physician-hospital consolidations are growing in frequency, and combined purchasing departments are growing in influence, which may reduce life-sciences companies’ negotiating power,” Hisey said. “In addition, providers and health plans are now armed with a more comprehensive fact set than in the past to inform their evaluation of life-sciences products.”
Drug and device manufacturers will face a “fact-based messaging future,” he said. “It will be important to have a strong program in place to access meaningful, robust, real-world evidence from the marketplace and clinical delivery organizations,” Hisey noted. “Companies will require strategies to inform decisions across the life-sciences value chain—ones that recognize shifting purchasing patterns and enable conversations around a product’s clinical, safety and economic impact. The true hurdle is adoption, not just product approval, so articulating a clear value proposition will be imperative.”
Calling it a “shifting ecosystem,” Hisey explained that this change also generates talent issues for life-sciences companies. To thrive, organizations will need institutional and individual capabilities in
advanced analytics, population health management, market trends and customer segmentation, and account management to “deal with more powerful/non-clinical buyers.”
He urges organizations to go beyond the product or service, adding that innovation and growth across the value chain can take many forms, including employing new commercial models; pursuing growth through non-traditional external relationships; increasing value-based contracting; using alternative distribution channels; executing work more cost-effectively; and “defining a value proposition beyond the pill or the device” (for example, being a care management partner independent of a product).
“Improving the return on investment for life-sciences research and development will continue to be an important focus for companies seeking both innovation and growth, especially when developing alternatives to existing, in-line therapies,” Hisey wrote. “Asking the right questions, conducting clinical studies and accessing big data can support an honest evaluation of the ability of products in a company’s pipeline to dramatically improve outcomes and/or safety profiles, shift purchase patterns, lower prices and address unmet needs.”
This kind of insight may result in the decision to move forward only with technology that will clear the dual hurdles of U.S. Food and Drug Administration approval and marketplace adoption.
This shifting ecosystem certainly is uncharted territory for most orthopedic firms, but it’s also an opportunity for outsourced manufacturing and service providers to help solve this new value equation.
For years, the discussion has been about creating true partnerships with OEMs—to help increase their efficiency, speed time to market, and provide much-needed full-service resources that allow device firms to focus on responding to evolving market forces. That’s true today more than ever, and it’s more than a marketing tagline. The more that contract manufacturing companies understand about their partners’ needs and trials beyond just providing a particular talent, product or service, the better the odds are that both will prosper.
That kind of synergy would be truly (and constructively) disruptive.
Christopher Delporte
Editorial Director, Medical Devices
cdelporte@rodmanmedia.com