When a global medical device company initiated the development of a new, lower-cost surgical robot technology, the market seemed primed for more opportunity. However, after six years of investment and still more needed, market growth had started to plateau before launch. The company’s leadership was determined to understand this unexpected dynamic and define strategic solutions, especially as multiple competitors announced plans to launch surgical robots as well.
Since surgical robots were developed in the early 2000s, one company has dominated the U.S. and global markets, and initially experienced significant growth year over year. No clinical evidence existed to explain why the robotic market experienced such high growth in its early stages, or why it tapered off. Anecdotally, many believed because robots enabled surgeons to sit — rather than stand — during the long procedures, increased comfort drove adoption. Others pointed to surgical time savings and improved patient results.
Navigant Consulting, Inc. conducted market analysis and research to determine the robotics market’s current dynamics and future potential. Of the 450,000 robotics procedures being done in the United States annually, more than 70% were for specific, complex procedures in urology and gynecology.
By 2015, more than 60% of large U.S. hospitals had robotic systems. The penetration in the select group of targeted procedures was high, and sales of new systems were slowing. Furthermore, no evidence supported the global company’s belief that a lower-priced option would find market preference. Rather, research showed that lack of an identified clinical value proposition — not price — had delayed expansion into new procedures.
While clinical studies showed slight time savings and improvements in patient recovery, these were not significant enough to explain or sustain early market growth. Neither was surgeon comfort, because robots only were used in certain complex, long, urological and gynecological procedures, and had not exhibited adoption in lengthy, complex procedures within other specialties. In fact, research showed that robots were used specifically in surgeries that experienced high intraoperative conversion rates, and subsequently observed historically low rates of manual laparoscopic adoption. In these types of procedures, surgeons who used robots saw significantly lower conversion rates.
The global company aimed to expand the market by creating a clinical rationale and economic justification for using surgical robots in other procedures. While this investment would expand the market for all players, it made the competitive dynamics more manageable. Navigant created a road map of investment strategies and a predictive forecasting model to support the company’s expansion initiative.