Key Trends Shaping Successful Value Propositions for Med Tech
The evolving healthcare landscape in the US and abroad presents significant opportunity for device entrepreneurs to bring innovative clinical supports and interventions to market. Ultimately, innovations must facilitate improved clinical outcomes. Concurrently, these technologies must meaningfully differentiate themselves within an increasingly competitive marketplace and define the value they would bring, both in direct comparison to existing standards of care, and to other innovations under development.
Several key trends continue to drive medical industry:
- Evidence-based clinical care
- Outcomes-based reimbursement models
- Global pricing and contractual capitation
- Continuous versus periodic clinical management
- Coordinated and efficient models of care delivery
- Technological solutions for transactions and data management
- Increased regulatory, accreditation and transparency mandates
- Clinical practice diversification and consolidation
- Expansion of retail and direct-to-consumer services
Robust reimbursement planning is the primary determinant of a device’s commercial success.
In contrast to regulatory approvals which focus on safety and efficacy, reimbursement review seeks to evaluate medical interventions as reasonable, cost-effective and medically necessary for populations of interest. Global agencies and payors are implicitly looking for the value gained from therapeutics and technologies to drive health outcomes. Further, the comparative effectiveness of a technique versus current standards of care is of critical importance for emerging technology market access and commercialization.
As a result, clinical trial strategy and post-market surveillance must be guided at onset to simultaneously satisfy reimbursement needs and to ensure capture of economic data required. Failure to conduct trials with reimbursement considerations in-mind may have significant and deleterious effects on future determinations of payor coverage and pricing.
A compelling value proposition communicates the underlying benefit of the new device in clear and objective terms for all stakeholders. The technology must also construct a story within the managed-care environment, often demonstrating enhanced outcomes for specific patient types, sub indications, and comorbidities. Novel medical devices have many opportunities to demonstrate their value proposition, including but not limited to:
- Improved clinical outcomes
- Enhanced treatment efficiency and throughput
- Superior patient experience and compliance
In recent years, health systems have improved their practices and formalized procedures for evaluation of medical technologies, with active representation from clinical, financial, and administrative team members. For products or services with higher incremental costs or significant expenditure, an exhaustive inspection of the business case is all but ensured. Even devices which show positive cost benefit may fail to achieve adoption in these environments if they do not fit within existing workflows, if they run contrary to desired staffing requirements, if clear metrics cannot be used to quantify improved outcomes, or if they relate primarily to indirect health costs.
Fundamentally, if an existing device or therapeutic is deemed equivalent and is perceived to have few, or no, key disadvantages, there may be significant inertia to reject adoption of new technology. Should market penetration be achieved, a review of performance on a regular basis is then essential to capitalize on opportunities and address weaknesses in support of share growth.
Given these challenges, successful device development critically depends on early and intentional integration between clinical, regulatory, payor and user demands. Therefore, alignment of stakeholder incentives through continuous market research remains a critical path for MedTech companies to be successful.