The global medical device market reached $442.5 billion in 2020 and is forecast to jump to $603.5 billion by 2023. Demand for everything from at-home personal-use devices to inpatient equipment is growing, which presents as many challenges for manufacturers as it does opportunities.
The modern medical device landscape is prolific, with new and innovative products coming to market each year. Even amidst a global pandemic in 2020, the industry managed to launch an array of successful products. Among them, Boston Scientific’s HeartLogic remote heart failure diagnostic and monitoring device, and Endomag’s Magtrace and Sentimag magnetic localisation system, which assists in lymph node biopsies for patients undergoing breast cancer mastectomies.
There’s no shortage of demand for these devices and the many dozens of others that make it to market each year. However, there’s also demand for plenty of products that don’t make it to market. They’re shelved pre-production or shut down during clinical trials. The reason may vary—anything from lack of funding, to poor market prospects, to unanticipated obstacles from insurance companies or regulatory bodies like the FDA. Ultimately, these products never see the light of day, to the detriment of patients anticipating them.
As the landscape becomes more and more competitive and demanding, medical device manufacturers need to prioritise strategic product development.
What is strategic product development?
Strategic product development pays equal mind to both product development and the market forces driving demand for a solution. This is imperative in the medical device market, for the chief reason that med-tech innovations need to meet evolving demand for them. As our ability to identify, diagnose and treat health conditions improves, there’s demand for a higher standard of performance from medical devices. Strategic medical device development is often iterative for this reason.
Strategic product development is also about balancing cost and quality factors—a consideration becoming more important with each passing year. The cost of healthcare is expected to see a compound annual growth rate (CAGR) of 5.5% until 2027, and will represent nearly 20% of United States GDP. This prospect represents a double-edged sword for device makers. Manufacturers need to produce devices that are affordable (or covered by insurance), while contending with higher manufacturing costs. Strategic product development helps manufacturers balance these cost factors as they continue to innovate.
Device manufacturers need a forward-looking approach
Medical devices serve unique and specific purposes. Executive leadership in the medical device market needs to have forethought to both sides of the manufacturing equation. Has understanding of a condition changed since the initial concept of the device? Have material technologies improved in relation to the function of the device? Ensuring product-market fit is an ongoing endeavour—one that requires a forward-looking approach spanning multiple areas of focus.
Here again, strategic development benefits from iteration. Pursuit of a panacea isn’t possible because the market is always in flux. Instead, manufacturers need to develop devices with viable life expectancy in mind. How long will the current iteration of the device meet market demand? Three years? Five? A decade? It requires a keen understanding of where the research for a given condition is on the road to breakthrough therapies, treatments or prevention.
A marketable medical device is only the beginning
Part of strategic development involves understanding how to get the product you’ve created into the hands of those who need it. For medical device manufacturers, the answer is highly variable. Is the product a Class I, II or III device? Is it eligible for insurance coverage or reimbursement? Is it sold to end-users or practitioners? All these questions factor into product development and play a role in the best approach to producing a marketable device.
The implications of device marketability and accessibility to patients and practitioners can influence exactly how the device is created. For example, if the path to market is through practitioners, the device may not require as much engineering to meet a broad user base. Instead, manufacturers can divert some production costs to future practitioner training costs. In a similar vein, accounting for 510(k) clearance can expedite time to market by building the 90-day waiting period into the rollout timeline.
Manufacturing executives who look beyond the viability of the product and consider the path to market will find themselves better equipped to launch a successful product than those that focus solely on efficacy. It’s challenging to produce a product that works; it’s even more challenging to get it into the field.
Agility in the face of regulatory uncertainties
The medical device market is something of a Wild West in some respects. Depending on the device, it may face little to no regulatory challenges on the path to market. Others face strong regulatory pushback and a litigious environment once they make it to market. Medical device company leaders need to have keen awareness of the regulatory and market challenges in front of them. That understanding needs to further factor into strategic product development.
Design with regulatory requirements in mind. Manufacture a device designed to exceed consumer expectations. Over-engineer in aspects that could leave the device (and the company) susceptible to liability. Manufacturers that anticipate the environment surrounding their device will produce one that’s supremely equipped to succeed in it.
And, of course, it goes without saying that change is the only constant. Manufacturers need to plan for unpredictability and adapt to new regulatory and legal considerations quickly. Here again, iterative design proves strategic.
A strategic pathway to market for more products
Strategic product development is the new imperative for medical device manufacturers. It’s never been enough to have an innovative idea—the go-to-market approach for devices has always been a difficult one. Now, as the market becomes crowded, it’s important for manufacturers to consider not only the challenges in getting to market, but those present in the market.
Will the newest iteration of your device meet regulatory expectations? Is the moat you’ve built around your device enough to protect your IP from competitors? Do you have a plan for how to scale production while also innovating for the future? These questions are a sampling of many more device manufacturers need to ask themselves as they consider their strategic position regarding future product development.
