Strategic partnerships are the new norm in the fields of MedTech and digital health. We take a look at how global disruption, regulation changes and digital transformation have all accelerated the MedTech industry over the past year.
By integrating medical devices into the Internet of Things (IoT), MedTech organisations, digital health companies, healthcare providers, and regulatory bodies are working more closely with each other to drive better patient outcomes at lower costs. In an increasingly complex health ecosystem, collaboration and multi-disciplinary knowledge-sharing are becoming hallmarks of the industry.
Businesses that were once wary to team up with competitors and embrace collaborative approaches of digital transformation, now see the long-term advantage in harnessing different expertise across geographies, sectors, and the entire value chain. Thanks to the total reconfiguring of the health landscape by COVID-19, uneasiness around collaboration is being replaced by a greater openness to the idea.
Global disruption caused long-term trends to accelerate
As touched upon in Deloitte’s 2019 Winning the future of MedTech report, long-term trends such as shifting business models, increasingly complex health demands, consumer-centricity, and technological advancement meant strategic partnerships in MedTech and digital health were already common prior to COVID. However, the global disruption caused by the coronavirus has expedited these trends.
For instance, the rush to get out new medical products quickly has triggered what EY calls a “revolution” in medical device regulation. Meanwhile, social distancing measures forced businesses to adapt to new working environments, including the widespread formation and/or adoption of remote engineering teams across the MedTech sector. Finally, the stark reality of travel restrictions and BREXIT, has compelled companies to find ways to build more resilient supply chains.
By seeking to reinforce and strengthen the healthcare ecosystem, the collective efforts of those in the MedTech and digital health spaces have caused a surge in collaborative activity.
Reducing barriers to market
Throughout the pandemic, regulators, and MedTech organisations have been cooperating more than ever before, coming together to meet the urgent demand for vital equipment (including in vitro diagnostics and other tests, as well as PPE and ventilators).
Indeed, the relative leniency of regulators in reducing barriers to market entry has facilitated convergence between medical device suppliers, especially after the U.S. Department of Justice and the Federal Trade Commission confirmed that suppliers can do so without risking violation of antitrust laws, sharing capacity, and expertise as needed. In Europe, the implementation of the EU Medical Device Regulation (EU MDR) was deferred by a year — giving breathing space to manufacturers that were not yet compliant.
However, the post-COVID business landscape will not simply retreat to pre-COVID conditions. Beyond COVID, this sense of collaboration is set to flourish further.
According to EY’s 2020 Pulse report, “the crisis appears to have fostered an attitude of collaboration and cooperation within the MedTech sector, and between the industry and its stakeholders.” This trend demonstrates a widespread acceptance of digital transformation as a strategic imperative and acknowledges the importance of collaboration in achieving this business goal.
As MedTech and digital health embrace Industry 4.0, digital transformation is increasingly a case of when rather than if. Of course, different companies are at different stages of the digital transformation process, but companies lacking access to platforms that enable precision and real-time insights will fall behind. Health technology such as remote monitoring was commonplace in healthcare pathways prior to the pandemic. Now, it’s ubiquitous.
New opportunities for partnership
In today’s always-on, 24/7 world, customers have ever-complex health needs. As personalised and preventative care becomes more accessible to more people, MedTech companies will have to meet these needs while also taking precautions to drive costs down and remain competitive. Digital transformation through collaboration represents the best way to achieve this.
As instances like global organisations like GSK and Sanofi coming together to work on a COVID-19 vaccine show, being in direct competition is no impediment to partnership. According to EY, “ecosystem partnerships and collaboration with regulators that once seemed impossible are now within reach as governments scramble for solutions.”
Despite the initial shock of COVID sweeping a wave of uncertainty across the industry, this agile new way of thinking (combined with the receptive attitude of regulators) has demonstrated the ways in which data-driven digital transformation can steer the industry into a prosperous future.
Greater collaboration — with customers, consumer technology companies, research institutions, and even competitors — can open future growth opportunities for MedTech companies. Instead of being seen as an add-on, partnership models are fast becoming the go-to solution for MedTech and digital health companies alike.
Both MedTech and digital health enter the post-COVID landscape in a healthy position. While the MedTech sector saw a downturn in merger and acquisitions (M&A) due to procedures getting postponed, MedTech valuations performed more strongly than most life sciences sectors throughout 2020. As a result, more investors are returning to the MedTech space — with top targets including sub-sectors like diagnostics and remote patient monitoring.
Digital health has been even more favoured by investors (the Rock Health Digital Health Public Index, for example, rose 65% between January 2019 and August 2020). Indeed, 2020 witnessed the largest M&A investment yet made in the digital health space. In October 2020, the multinational telehealth company Teladoc Health finalised its $18.5bn (£13.25bn) merger with the digital health start-up Livongo — a deal described by Forbes as an “unprecedented event in digital health history.”
Driving digital transformation to build a better, more effective healthcare ecosystem
The digital-first future of healthcare is already very much afoot. To facilitate an industry better placed to exploit opportunities and improve life for the end-user, the business world, academia, and supportive government programmes are increasingly converging and collaborating. Internally, organisations are turning to collaborative technologies to connect business units and forge closer ties with stakeholders.
With more and more business transactions being conducted online, collaborative technologies improve the way in which MedTech companies can take products to market. By investing in and embracing the appropriate tech, medical device manufacturers and digital health providers give their teams the necessary digital support to navigate through these critical times.
This blog was created in collaboration with Lorien, a global technology recruitment solutions specialist, with over 40 years’ industry experience. Lorien and SRG are part of Impellam Group, a Global Talent Acquisition and Managed Workforce Solutions provider, bringing a wealth of expertise through 13 market-leading brands, across 76 locations.
Interested in more MedTech insights and articles?
Why VCs are rushing to invest in MedTech innovation
Growth amid disruption: The long-term impact of COVID-19 on the UK MedTech sector
What new EU MDR legislation means for the medical devices market