As a high school junior, I was shown the guts of an implantable defibrillator. That day, I quit my pursuit of a career in medicine to pursue one in medical device design.
OK, so my life didn’t go quite that linearly, but many years later I continue to work on life-improving technologies from the consulting side of medical device design. This pursuit continues to be a great passion.
The medical device market is in the popular press spotlight these days. Actually, it’s more of a target. Netflix’s documentary The Bleeding Edge explored whether the 510(k) FDA clearance process allows manufacturers to bring risky devices to market and whether bad side effects are covered up through questionable reporting. John Oliver picked up a similar theme recently on his show “Last Week Tonight.” On a more positive note, a recent book by Eric Topol makes the case for big improvements in healthcare delivery and cost with the application of AI to treatment and diagnosis. So at this important moment in medtech history, let’s look at some of the market forces and trends shaping the med device industry. How will the big players react to these forces over the next decade?
Don’t fertilize eggs. Adopt toddlers.
R&D in large medical device companies is slowing. The big companies have realized that they don’t have the patience to grow ideas from eggs knowing that many of them will never see the light of day. These efforts are expensive, and since most of the big players are public, the demand for quarterly profits run counter to expensive and risky R&D work. As a result, many of these big players are essentially outsourcing their R&D to startups and smaller companies. Companies (through their venture arms) can make small investments in a bunch of startups and then follow them as they burn down risks, especially regulatory and technical challenges. They then pick the winners (adopt the toddlers), either licensing the technology or buying the company. The startups get quite a bit of value from these venture arms. They get access to experts in the field and to regulatory advice and help, and they can laser-focus on a problem to solve or a patient population to address.
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