Medical Devices

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Challenges the Medical Device Industry Faces

The healthcare industry has seen unprecedented growth over the last few years, with the emergence of new markets and the enactment of supportive legislation. However, several uncertainties are expected to impact the market in the future — changing healthcare dynamics, complex reimbursement policies, and a continuously evolving competitive landscape. Medical device manufacturers are under immense pressure in terms of cost reduction, unique innovations, and streamlining their operations. A few of the challenges the medical device industry faces are briefly discussed below.

Financial Constraints

The medical device industry is recognized as one of the most expensive industries. Medical device manufacturers often face financial challenges that obstruct the development of revolutionary products or inexpensive medical technologies functionally equivalent to the existing technologies. These financial constraintstranslate to reduced profitability for manufacturers, leading to rampant consolidations in the medical device industry.

Many manufacturers are also compelled to reduce the cost of their devices to adapt to the purchasing patterns of cost-conscious hospitals. The declining profit margins of hospitals is a key factor compelling hospitals to seek massive discounts from medical device manufacturers.Another challenge for medical device manufacturers is the uncertainty of winning reimbursements from insurance companies and government payers.

Regulatory Challenges

For an industry where product development in itself is anexpensive affair, regulatory costs further add up to financial constraints. The estimated regulatory costs for medical devices are mentioned below.

  • Marketing a medical device in the U.S. requires USD 100 million, on average, for Premarket Approval (PMA)
  • An estimated USD 31 million is required to market a product under 510 (K)
Unmet Needs in Emerging Markets

The medical device industry in emerging economies, such as India and several African countries,faces tremendous challenges in terms of infrastructure availability and the access and affordability of medical technology. Emerging markets are price-sensitive,self-paying, and resource-constrained, and thus, the adoption of advanced medical technologies is limited.

Challenges Start-Ups Face

With technological advances, several startupsare entering the market with innovations. However, these startups face numerous challenges —funding always being a critical one. Startups need not only funds for operations but also FDA compliance and other related costs. They must have the funds to sustain during the dead period from product development to product commercialization. The provision of public funds exists in western countries,unlike the eastern countries. Another key challenge is in terms of the compliance and regulatory framework. Getting regulatory clearance for a medical device is a prominent barrier that non-regulated hardware companies don't face. The time, spending, and assets required to obtain the necessary certifications can be one of the most substantial barriers in launching a new medical product.

Medical Devices

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Where the Industry is Heading

The medical device industry has seen the invention and introduction ofnumerous medical devices that find applications in several treatments and therapies. Technology,in various forms, is expected to change the landscape of the MedTech industry in the coming decade. Medical device is one of the most dynamic and transitioning industries in healthcare. In the coming decade, only those medical device manufacturers that adapt to the market needsby reinventing and repositioning growth strategies.

Medical device manufacturers have started focusing on value-based delivery by including patients in overall care management. One of the important transitions the industry has experienced is the shift from treatment and cure to prevention through integrated smart technology, which can improve outcomes cost-effectively.

The integration of AI and IoT with medicaldevices is a notable transition in the industry. Medical device manufacturers have started developing individualized solutions to meet market demands. They have also started connecting with patients or consumers directly, changing the industry value chain. Breakthroughs in the industry are directing it toward providing agile, pervasive, and integrative solutions that will improve patient engagement, patient monitoring, and simultaneously alerting clinicians about the care management plan.

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Solutions

We provide customized research solutions through a holistic approachto help our clients achieve their goals. Our solutions cover the inclusions listed below.

Medical Devices

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IMPACT

Medical devices is a rapidly expanding industry within the healthcare sector that continues to grow with the launchof new technologies. Commercializing a product in the medical devices industry can be a challenge for many players, and our solutions comprising insightful data on a particular area or period of product launch can help companies overcome the challenge. Our data and analysis provide marketing and sales insights that help players gain market access.

A client of ours, a U.S.-based medical devices manufacturer, sought information on the cost-effective solutions available in the market at the time. It also sought to track the present and upcoming competition in the market. Our team conducted a deep dive analysis to provide the company a comprehensive solution, which included cost-effectiveness analysis, pipeline analysis, technological landscape, regulatory landscape, and competitive analysis, to help identify the upcoming competition and, eventually, improvise its strategy.

We also help companies in strengthening theirR&D capabilities. Our expertise in analyzing company operations is what separates us from others, including our detailed study on opportunities to gain higher market shares by planning strategies and driving performance.

Competitive Analysis Study

One of the manufacturers of cardiovascular devices (bioresorbable stents) had invested in product development, and its device was in the last phase of the clinical pipeline. Meanwhile, the market had experienced many product recalls ofbioresorbable stents, raising concerns aboutproduct safety. The company required detailed insights into market forecasts and competition analysis, along with a detailed outlook of product recalls.

Straits Research executed this project in two stages to help the client meet its objectives. At first, our research team executed exhaustive primary research to understand the opportunities in the market and the technical aspects of bioresorbable stents. We provided a comparative analysis to check the risk of product recall for the potential stent in the pipeline. Our industry ecosystem analysis helped theclient understand the present market scenario and where the market is expected to head in the near future. The solution we provided effectively helped the client accelerate the process of product development.

Solution

  • Competitive Analysis
  • Industry Ecosystem Analysis
  • Opportunities Analysis
  • Pipeline Analysis
Market Analysis

A manufacturer of dental accessories in Europesought market estimates and forecasts for the niche category of dental tools in terms of the sales revenue and volume of units at a distributor level. The client also requested data on region- and country-level sales revenue and volume of units delivered by distributors.

Straits Research provided a detailed product mapping of distributors and detailed competitive analysis. We conducted a regional study with the help of industry experts to identify market trends. Our findingshelped the client identify the potential threats and devise a competitive strategy to withstand the market competition.

Solution

  • Company Sales Analysis
  • Product Mapping
  • Regional Market Analysis
  • Market Factors Analysis

Medical Devices

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Our Clientele
  • Fresenius
  • Medyria
  • MIV Therapeutics

Medical Devices

Covid-19: What happened and the What next
Impact of the COVID-19 Pandemic on the Medical Devices Industry

The global COVID-19 pandemic has increased the demand for medical services. National lockdowns have been announced in amajority of countries to curb transmission, and industries have been severely affected. The medical device industry is critically hit due to disruptions in manufacturing and the supply chain. China, the epicenter of the disease, was hit hard by COVID-19, and lockdowns were announced in several parts of the country. The global medical device industry significantly relies on China for the supply and manufacturing of critical components, such as disposables, capital equipment, and consumables.

Effects of the Production Slowdown in China, the U.S.'s Fourth-Largest Supplier of Medical Technology

As per U.S. FDA data, China is the U.S.'s fourth-largest supplier of medical technology. In the U.S., over 60% of the FDA regulated products imported from China are medical devices. Due to the temporary shutdown of manufacturing facilities in China, the volume of medical devices being manufactured has been reduced significantly. Moreover, international travel restrictions have impacted the supply chain, and the highly regulated nature of the medical device industry makes it difficult to make and manage any changes in the supply chain or manufacturing.

Supply-Demand Gap of PPE

A sudden surge in demand, panic buying, and misuse of personal protective equipment (PPE), such as masks, gloves, surgical gowns, respiratory protective devices, and other medical equipment and ventilators, have led to shortages. The WHO has advised manufacturers and governments to increase manufacturing by 40% to meet rising demand. To protect healthcare workers on the front line, countries such as India have increased domestic production.

Public and Private Initiatives to Bridge the Gap

To meet the growing demand for PPE, the Indian government has enlisted 12 manufacturers that will manufacture PPE or coverall kits for front line healthcare workers. Some of these manufacturers are Arvind Mills, Amare Safety, JCT Mills Phagwara, Mumbai-based Sure Safety, Manchanda, Shree Healthcare, Chennai, and Delhi-based Sai Synergy. Within a span of 15 days, India has planned to more than double its daily production of PPE suits from 12,000 to 30,000 by April 23, 2020. However, the country needs 200–300 hot air seam sealing machines to increase daily production close to a target of 100,000 per day.

The Defence Research and Development Organisation, India, has also collaborated with two local manufacturers for the production of N95 masks on a daily basis. These manufacturers are able to supply over 50,000 N95 masks per day. However, the government plans to ramp up the production capacity to 100,000 per day.

Apart from this, ventilators is another category of essential equipment that has experienced an upsurge in production.

  • To address the growing burden of COVID—19 pandemic, Medtronic Plc. has increased the production by about 40% and further plans to increase its capacity by more than double.
  • In April 2020, Koninklijke Philips N.V. announced plans to collaborate with the U.S. government for ventilator production. The government plans to double the production by May 2020. The company has also planned to invest several tens of millions in manufacturing facilities in the U.S. for ventilator production. Koninklijke Philips N.V. ramped up its production facility to produce 43,000 in the first quarter of 2020.
  • Flex Ltd, a contract manufacturer of Apple Computers, will be manufacturing 25,000 to 30,000 ventilators monthly by May or June
  • As per the U.S. Department of Health and Human Services (HHS) data, in March 2020, Ford and GE Healthcare signed a contract to produce 50,000 ventilators. This is expected to bring the ventilator production under the Defense Production Act (DPA) to over 41,000 by the end of May and over 187,000 through the end of 2020. The HHS had previously contractedGeneral Motors (GM) for 30,000 ventilators at the cost of USD 489.4 million. GM is working with the privately held Ventec Health Systems to produce its critical-care ventilator, VOCSN.
  • Indian ventilator manufacturers have also increased theirmanufacturing capacities from 5,500–5,750 units per month to 50,000 ventilators per month by May end. Manufacturershave also collaborated with automobile manufacturers, such as Maruti, Tata Motors, Mahindra & Mahindra, Hyundai India, and the Pune-based Kalyani Group. Domestic manufacturers — the New Delhi-based AgVa Healthcare, Skanray Technologies in Mysore, AB Industries of Vadodara, Mumbai-based AVI Healthcare, Air Liquid Medical Systems of Chennai, Thane-based Medion Healthcare, and Ahmedabad-based Life Line Biz — manufactured 2,520 ventilators in February, and as of March 31, production nearly doubled to 5,580 units per month. These figures are slated to grow to 50,000 ventilators per month by May end.
  • Skanray Technologies, a ventilator manufacturer, has collaborated with Bharat Heavy Electricals Limited (BHEL), Bharat Electronics (BEL), and Mahindra and Mahindra group to increase the production from 2,000 ventilators per month to nearly 5,000 units per month, and approximately 30,000 units per month by end-May.
  • AgVa has partnered with Maruti to raise the production from 400 units per month to 4,000 units per month in April and further plans to reach 10,000 units per month by the end of May.