4.1.1 Medical Device Industry: Market Space

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En provenance du cours de University of Minnesota

Pharmaceutical and Medical Device Innovations

193 notes

University of Minnesota

Pharmaceutical and Medical Device Innovations

193 notes

Cours 3 sur 5 dans Specialization Healthcare Marketplace

This course in the Healthcare Marketplace specialization gives the learner an in-depth view of the intellectual property creation that is vital to creating breakthrough technologies. Included is an understanding of the strategy deployed for pricing drugs and new technologies as well as the market sizing exercise to identify where future research and development investments should be made.

À partir de la leçon

Medical Device Market Deployment & Management

In this module you will learn about how the medical device industry takes a product that has cleared the bench and sells it in the market. Selling a new medical device in a highly competitive global market space with a patent clock ticking is a constant tactical game particularly in the crowed medical device Class 1 and Class 2 space. The take-away messages from this module are the medical device market requires constant innovation with product updates required at a far quicker rate than the pharmaceutical market. Manufacturers must also be nimble to adjust to different government reimbursement policies that put great financial risk or previously risk free core customers. The skills gained from this module are an understanding of the competitive landscape analysis as well as threat assessment analysis required to complete the capstone medical innovation project.

Medical Device Market Deployment & Management Overview3:47

4.1.1 Medical Device Industry: Market Space6:17

4.1.2 Medical Device Industry: Innovation Pipeline & Valuation6:15

4.1.3 Medical Device Industry: Global Partnerships6:28

Rencontrer les enseignants

Bryana Mayer
Lecturer
Carlson School of Management, Medical Industry Leadership Institute
Stephen T Parente
Professor
Carlson School of Management, Department of Finance

This is module 4.1.1 focused on the medical device industry.

Let's define the market space.

So, when thinking about the medical industry today,

it's a pretty big industry basically, in the United States $290 billion 2014

growth rate is pretty substantial six to eight percent.

The major players in this arena Johnson and Johnson, GE Healthcare,

Siemens Healthcare, Phillips, Baxter, Becton-Dickinson and many others.

And while there is increasing competition there is also lots of innovation,

and but of course always remains regulatory issues as well.

If we look at, the range of what's going on, in terms of different areas.

We have, anything ranging from OBGYN, radiology, dental, ear, nose, and

throat, to looking anesthesiology, gastro, plastic surgery, so

basically it's, really a pretty diverse range across the whole team.

So in this space what is intriguing about the market is, we talked a lot about this

getting in terms of getting reimbursed, is that a lot of folks now are actually

taking essentially they're outsourcing what they do for

some of their service provisions as well as product design, and ultimately coming

up with a whole new way of looking at outsourcing the medical device industry.

So by service outsourcing, that's our first point, this is essentially

looking for areas of reduced cost, innovation, and

faster production, and reduced rollout time.

The idea is that you are trying to find out handling your technologies,

and as they're being deployed cheaper way sometimes in contraries

than what's been done prior to them.

Well get the product outsourcing,

this is generally the older outsourcing concept, and it is relatively short.

The thought here is that you are actually reaching out to folks to do contract

manufacturing, and potentially to rebuild resell some of your technology,

to kind of deploy these pieces.

But it does show that this industry is getting pretty robust in the sense that

you are reaching out to firms outside of say, the normal [INAUDIBLE] regime

that companies do [INAUDIBLE] and moving on to a different space.

So we think about what this world could look like in terms of

service [INAUDIBLE] industry.

The services market itself could do everything from product design and

development.

They could do regulatory consulting.

They could do maintenance.

They could do upgrades.

They could do testing and certification and implement.

On the application side of the market they can develop devices across all

different regimes, class one, class two and the super-advanced class three.

So it's a pretty amazing thing that you can sort of take out to market.

So when we look to time to market and revenues, when you

have higher revenues that are due to pass [INAUDIBLE] market, that can really make

the component case to kind of invest in technology and get things out quicker.

A shorter rollout time is going to rationalize working capital cycle and

obviously improve ROI.

Basically to get your revenues where you want them

to be you want to really be at your time to market here.

This could be two years just to get your product out the door.

If you're actually operating here, which could be more like five years.

You could really be losing too much time in this space.

So when we think about going out to make some of these applications,

it's interesting to see where things fall.

I'm not going to go into the class one,

because for a lot of folks it's pretty basic.

You don't really need to do that a tremendous amount is

actually going to class three, which is the most advanced of micro prototyping.

It's actually see that move in that space, just develop the pipeline but

again, if you're quicker to pipeline for that most expensive technology,

because these are going to come with a much higher price point than these.

Having people help you get there is going to be much better.

If we look at the services split, for product design and development,

that's pretty much denominates what's there.

If you look for regulatory consulting, that's 22%.

Maintenance, 16%, implementation only 9% and

upgrade [INAUDIBLE] and testing 13 and 11% respectively.

So, where is some of this outsourcing actually occurring?

Most of it actually is domestic transfers in the United States market or

to Canada, but after that, a lot of it can be done in Europe.

Increasingly, there's parts that are being done in the Asian Pacific area, and

then there's outside of that space as well.

Major players to get inside these are technologies you may not

hear them all the time, but these are the firms that

are really getting good at sort of doing these service innovations.

When you go to any medical device conference, nationally or

actually they have a great one between cities.

That's always in April, designed for medical devices conferences.

You'll see these folks represented there quite actively.

So as the market evolves what you'll find is that there are increasing strategic

alignments since, and partnerships between medical devise manufacturers and

outsourcing providers.

For example for GE, which is really dominant in the medical diagnostic

business, coming in [INAUDIBLE] move things along [INAUDIBLE] level.

It's and there's a price to basically get different manufacturing capabilities,

scale up to a much more aggressive level.

And also software and

regulatory components partnering is a major component also, as well.

So this concludes module 4.1.1, assessing the market space for medical devices.

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