The Future of Medical Devices

“The past year has been one of refocusing in the medical industry, as we really start to feel the macroeconomic pressures and healthcare reform taking place in the United States,” notes Sagentia Inc. Vice President of Surgical, Alistair Fleming. “The impact from the downturn is stalling national economies across the world, clearly requiring a level of restructuring, but out of adversity comes opportunity and companies have become more focused on exploring new markets. Therefore, it has meant diverging not just geographically, but also across the patient care continuum.”

Fleming goes on to explain that across the spectrum, companies have really started focusing on products that will gain traction in a landscape that is moving toward a more integrated approach to healthcare across a decentralized infrastructure. With that in mind, there were several advancements in 2012, specifically as they relate to the markets within which Sagentia focuses.

First is the surgical arena where, he notes, “This is an exciting time for surgical medical technology, with an increasing number of intelligent devices that provide multiple functions as well as robotics-based developments. Digging a little deeper into this area, there has been a lot of interest in energy-based devices, advancements in visualization techniques, and greater importance placed on the flow of data and how to make that data useful.

“Diagnostics is an area where we have seen increasing importance placed on real time results and higher levels of accuracy, both of which are driving the continued growth of point of care diagnostics,” Fleming states. “In addition, consumers are increasingly interested in understanding and owning their health-related decisions, which is driving the use of smartphone-based Apps in conjunction with home use devices. Diagnostics used during surgery and the areas of personalized medicine and companion diagnostics have also seen increased investment during the past year.”

However, Fleming explains that it is the patient care sector where the move from hospital environments to clinic and home environments is the most active. Devices are becoming smarter and easier to use – energy efficient technology is driving wider application of wireless sensors; the data this generates is being processed and presented more intelligently which results in better levels of patient monitoring, advancements in care and ultimately improved outcomes.

Noted also by Fleming is that, from a market perspective, “It has been a year of increased regulatory scrutiny, which has very publicly played out through concerns regarding orthopedic, cardiac, and breast implants, but also behind the scenes as EU and U.S. regulators revise their systems.”

Therefore, with 2012 seeing areas of advancements, there were also significant medical releases that hit the market last year. When asking Fleming for his thoughts, he first mentions the Sanofi glucose monitor, iBG Star, as an example of an FDA-approved medical device that can be purchased through iTunes.

“This is a dramatic shift for the industry as a whole and is a great example of direct payments instead of reimbursement and of patients as customers. For Sanofi, this was also a dramatic shift, as it was a pharmaceutical company developing a medical device. We expect to see more convergence like this as med technology and biopharma become increasingly entwined.”

Moving on, Fleming notes that cordless powered devices, such as stapler and tissue modification devices, helped declutter operating rooms. In the longer term, Fleming expects to see similar products migrating into the primary care setting for minor procedures, driven by a cost-saving shift toward decentralized healthcare.

“These self-powered technologies also have a role to play in emerging markets where power infrastructure can be a challenge. However, before there is significant adoption in these regions, the cost of manufacturing will need to come down significantly. Leading this trend, we have seen companies starting to adopt more innovative approaches to product design for low cost manufacturing and usability,” Fleming says.

“Really opening the door to a wealth of compliance and monitoring opportunities is the ingestible sensor built into pills – such as Proteus Digital Health,” Fleming comments. “This is a great example of a company responding to an unmet need between the payer and provider, rather than the physician and patient. The growth of chronic and lifestyle diseases has generated much talk of behavior modification and compliance in healthcare circles. We will see more products like Proteus help to curb healthcare expenditure and encourage patients to be more engaged and proactive in the management of their own health.”

Looking Ahead
Wireless and intelligent surgical devices will continue to grow. Gillian Davies, surgical sector manager, Sagentia, firmly believes that there is opportunity for internally powered intelligent surgical devices and sensors that communicate wirelessly to monitor and record performance, or provide precision navigational information during procedures.

Another area of opportunity will be in robotic devices. “More robotic systems assisting surgery will be developed,” Davies states. “In contrast to the existing mega robots on the market, we expect 2013 to see a rise in small scale robotic products directed at discrete unmet clinical needs; helping make specialist surgical procedures less specialist reliant.

“We will also see opportunities in image guided surgery, as advances in interventional radiology will continue with technologies emerging to get nearer to real time diagnosis and pathology – allowing faster, more efficient surgical procedures that are tissue sparing,” Davies explains.

Finally, another area Davies sees developing more will be big data, expecting to see increasing acquisition of data, processing that data into information, and then storing and delivering that information to those that need it. “Sources will increasingly include patients’ metrics in their home environment both pre- and post-surgery to support effective intervention and rehabilitation. We also see more live information from tools being used peri-operatively, and this information will be captured and utilized to improve surgeon training, procedure planning, and to demonstrate clinical outcomes.

“In the home environment, we are witnessing an explosion in consumer health tools, from smart phone apps to fitness monitors. We anticipate that the coming years will see a growing presence of medical devices filling the space between such non-regulated consumer mHealth products and those that only come to play within the healthcare setting,” Davies says.

Growth Going Forward
Predictions for 2013 are for overall growth, but Fleming and Davies add their opinions that it will be non-uniform growth. They note that the impact of the Affordable Care Act will be felt in cardiac and orthopedic areas, which in turn will see slower growth because of the increasing demand to demonstrate clinical outcome benefits and costs reduction. However, neurostimulation will grow faster as med tech moves into areas of therapeutic intervention where small molecule and biological approaches have been less successful, for example, neurodegenerative disease and smooth muscle control.

“As with other years, the key influences are regulatory and economic; however in 2013 we see these factors pulling a new stakeholder into the mix – the patient as the consumer. In segments where the patient has increasing influence on buying decision, companies that appropriately adapt to a patient-centric portfolio will see enhanced growth while others will experience steady state growth or even contraction,” according to Fleming.

With regard to influences on growth and contraction in 2013, Davies notes that, “Growth of medical products that utilize emerging technologies that bridge disciplines are being slowed by the uncertainty surrounding the regulatory pathway; even knowing which regulatory bodies to engage with is proving challenging. Throughout the course of 2013, we will see whether the FDA’s new rules surrounding 510k submission, introduced in 2012, will successfully address these challenges.”

Adding to that, “Economic pressure is slowing growth as customers become more cost-sensitive as a result of the Affordable Care Act,” Davies states. “There will be an increased focus on evidence-based medicine. Med tech companies will come under more financial pressure as a result of the U.S. medical device tax set to come into play – a tax that healthcare providers have made clear they will not accept being passed on to them. However, these cost pressures also drive opportunity – meaning new technologies that enable new types of products with demonstrable outcome benefits will grow, as well as the expansion into emerging markets.”

Fleming wraps up thoughts about 2013 with an honest statement, he says he feels it is very hard to gauge the overall recessionary effects on innovation. Traditionally, the medical sector has remained resilient to macroeconomic ebbs and flows; however, there is no doubt of the current influence the economy and regulatory changes are having on the sector.

“Healthcare in established markets is undergoing a metamorphosis, and like any metamorphosis the process can be abrupt and painful but that is required to survive in these new habitats. In the context of healthcare, the new habitat is one of a growing aging population suffering from costly chronic and lifestyle disease.

“There is no disputing that national healthcare spending is unsustainable, and so cost reductions are required if patients are to get the healthcare they demand. In recent years, this observation has cast a pessimistic cloud over med tech companies, but this year there has been significant observation of a change in the mood of those companies. A mood of opportunities ripe to seize acknowledging that disruptive innovation is required. The large multinational companies are beginning to look externally to new partners and new ways of doing business, whether it is innovative R&D processes, open innovation partnerships, market access, or business models. For small and large companies alike this presents great opportunities to those that can adapt, that can work across disciplines, and that learn to speak the language of a new set of stakeholders,” Fleming concludes.

Sagentia Inc.
Cambridge, MA
www.sagentia.com

Learn more about what this company brings to the medical device industry in this video – http://bit.ly/V5jIbM.