Summary

Small and mid-sized medtech companies face some unique challenges in the marketplace, but there are a number of strategies that will help level the playing field and even allow smaller players to thrive. It has rarely been tougher to be a small or midsize medtech in the U.S. market. Leaders in smaller medtech organizations face numerous challenges. These include

  • Reimbursement declines and shifts to bundled payments (e.g., BPCI, CJR) are putting economic pressure on providers to drive down costs, heightening price sensitivity for medical device purchases, and increasing emphasis on ‘value-based’ selling.
  • Consolidation of hospitals into larger health systems yields fewer unique customers with greater buying power, greater administrator influence in purchasing decisions, and greater interest in product standardization.
  • Consequently, providers are increasingly opting for clinically ‘good enough’ products (e.g., private label) and raising the bar for demonstrating clinical differentiation.
  • Large medtech competitors are getting larger (e.g., Medtronic/Covidien, BD/CareFusion, Zimmer/Biomet) and are becoming increasingly more difficult to compete with as they gain greater relevance with senior administrator call points, build ‘moats’ around their offerings with investments in ‘solutions’ tying together products, software, and services; and develop increasingly sophisticated HEOR selling capabilities.
  • FDA regulatory review continues to be slow and increasingly demanding, placing an onerous burden on innovators seeking to gain approval for commercialization.

This Executive Insights takes a look at strategies for smaller players in a market that is becoming increasingly challenging.

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