The last five to ten years have substantially changed the essential elements, deciding on process and outcome of marketing processes, the marketing landscape. Not too long ago, the launch of (new) products or technologies went along simple and understandable lines. TforG has watched how these changes have quickly affected the medical devices industry.
Under the assumption that the regulatory issues are out of the way and that we have built a decent clinical and economical reference file, the physician and in a later stage (specialized) nursing staff were the first to have a look at the product, put it in practice, judge efficacy and effectiveness, judging the product on the ability to improve patient safety, quality of care as well as the cost of care. In addition, the technical service department looked at safety, quality, durability, updatability, reparability, cost-price, especially cost of ownership.
After an initial blessing of both medical and technical, next stop was purchasing, discussing prices, the price of accessories, service and other relevant economical issues.
At TforG Decision Support, we have seen the changes in the Decision Making Unit, the Decision Making Process. Additional disciplines were casting judgment on the product, the place of use, connect- ability and the weights of opinion of the various disciplines shifted. Economical, financial factors shifted from relevant through important to essential, connect-ability from a benefit to an essential feature, exclusive availability of disposables as an excluding factor.
The consequence that the decision making process lengthened and that there was also a increasing demand on financial, financing issues was potentially annoying but did not change a lot in the basic commercial approach. Companies went through the same door (more frequently) met the same people (more often and some more) but in essence the process was not different.
The process could be handled with the same commercial organization, potentially better prepared, trained on additional issues with here and there a headcount with additional knowledge and qualifications. The cost went up from high to higher, the margins were starting to slide down, a bit.
In some countries the change started a while ago, initially in the mature markets in Western Europe.
- The product-file as mentioned before is now substantially thicker and in order to be successful more rapidly, it makes sense (is –becoming- essential) to generate Evidence Based Data.
The combined intelligence of the medical, financial end technical experts is now getting secondary to the opinion in expert institutes that look at more objectivated benefits in a (assumed) general applicable medical environment with less consideration for specific local/hospital circumstances. It takes out the “benefits” that may be influenced by the wrong (?) influence, undue commercial pressure, but it runs the risk of limiting the (technical) options and variations, not necessary providing all the answers for all conditions.
- Introducing a product or technology requires knowledge of tariffs and DRG’s.
Not only the “use” of mechanisms of incorporating new products into the system, through NUB’s in Germany and similar processes in other countries. Not only knowledge is required to “get into the system”, the way DRG’s decide rapidly on the commercial viability of a new product, product line or technology. Reducing surgery time and / or hospital days, reduces the cost of the treatment, sometimes substantially. This may fit well in the DRG system, but the current practice is that the Health care system increasingly rapidly changes the DRG level, turning the viability a couple of notches down. The question is if that mechanism gets in the way of product development. It definitely leads to “playing the tariffs” where the full economical benefit of a product in its application may be tweaked, adjusted to maintain a more “favorable” application. An new method that introduces an intervention that turns spinal surgery in excess of 2 hours into a ambulatory intervention of less than 1 hour under local anesthesia may turn out to be commercially counter productive and may lead a positioning of a “shorter” surgery with reduced patient hospital days. Better DRG, commercially more viable for industry AND the Hospital.
- The Healthcare systems in (e.g.) the mature markets of Western Europe are driving diagnostics, monitoring and treatment to less expensive places, performed by less expensive (medical) personnel.
That requires a different and more “multi facetted” introduction processes, with “the race to the ultimate set of features” making the product suitable for use in other places, by other people, in an other way, reducing cost etc.etc. More than before, product development, feature sets and creative solutions are deciding factors sometimes even beating attractive pricing. The cost op application, place and user, may well outperform the cost of ownership of equipment.
Our contacts with the industry make us select these three major developments. It also makes it clear that from the midsize and larger medical device manufacturers not even 50% claims to be fully prepared and organized to deal successfully with the changed circumstances. Worrying is that around 25 % of the manufacturers have limited knowledge and insight, let alone is prepared to deal with them.
If you want to learn how TforG Decision Support empowers clients to make decisions better and faster, putting all elements into place to create added value and differentiate from competition, feel free to leave your details to request a conversation about your specific marketing or business needs.
About Helgert Van Raamt
Helgert van Raamt has 35 years of experience in running and setting up companies, big and small, in EMEA (and beyond). After his senior marketing positions with Organon Teknika and Abbott Labs and four years in Venture Capital as an investment manager for US, UK and NL based funds, he joined Nellcor Europe in 1989 and has lead this company through two consecutive M&A’s (Puritan Bennett and Mallinckrodt). The acquisition by Mallinckrodt for 2.7 Billion made Nellcor the most successful Medic venture after the Second World War. He left to set up the International Operation of Aspect Medical Systems and brought that to success. In three years it reached a revenue level of $10 million and was profitable two months after the start of the operation. Since then (2003) he has successfully advised numerous companies about setting up internationally or cleaning up an existing international operation, both independently and as a partner for TforG Group.