It’s increasingly clear that the Medical Technology (MedTech) industry is going through an unprecedented level of change. In Europe, budget pressures are impacting market access and reimbursement. Payers and providers require evidence of value at the clinical and socio-economic level. And buying processes are changing.
In the midst of this challenging market, MedTech companies must act responsively to address profit and growth. How must the MedTech operating model change — across the value chain from re-thinking innovation strategy, to operational efficiency, to selling and support — to enable the future success of the industry in Europe?
Over the summer, our team at The Boston Consulting Group partnered with the MedTech Europe organization to take a deep look at the future of the sector in Europe. Our fieldwork – which spans the continent and features in-depth interviews with more than fifty industry and stakeholder executives – makes clear a critical fact: MedTech companies in Europe are at a tipping point and must change the way they do business.
Our research reiterated deeply entrenched industry challenges on a number of fronts, from mounting pricing pressure as payers demand proof of the value of MedTech products to increasing competition to regulatory changes that are likely to make growth more challenging. But these headwinds come as the industry is also grappling with a significant slowdown in the pace of innovation. As we’ll highlight at the European MedTech Forum in Brussels on October 10th, the industry must make a shift from a technology and product-focus to solutions that truly address customer need and have proven value.
One of the front-line responses to this challenge is to change the commercial model and build best-in-class commercial capabilities. BCG’s recent report, Still Deploying Milkmen in a Megastore World?: Fixing the MedTech Commercial Model, makes clear that it is possible to succeed and drive expansion by moving decisively on this front.
Overall, MedTech has offered a vibrant market with healthy returns for many years. A new era is dawning where companies must “change the game”. Only the fit will thrive.
I look forward to discussing with you the results of the research at the MedTech Forum on October 10th in Brussels.
-Nicholas Kachaner, Senior Partner and Managing Director, The Boston Consulting Group