It’s time for medical technology companies to face the hard reality of the United States market. As the largest medtech arena in the world, the U.S. served for decades as the land of opportunity for innovation, where investors chased “billion-dollar” markets with sincere expectations of achieving them. But, with healthcare spending growing to all-time highs, years of slowing growth rates, and an increasingly crowded, risk-averse marketplace, the U.S. medtech market has shifted from a “let’s try it” frontier to a “prove it” mentality. And we must all embrace it.
In today’s high-stakes trade-off game, only hard evidence – not marketing – propels adoption. That means, to be widely adopted, an advance must conclusively improve or extend human life while being cost-justified over the existing standard of care.
Scientific Data Sways Saturated Medical Markets
Times have changed significantly for medical manufacturers. In the mid- to late 20th century, a crescendo of innovations hit the market, exponentially increasing the medical industry’s ability to care for the spectrum of human need. And clinicians eagerly accepted them – organically driving market adoption for first-time technologies.
These days, an abundance of tried-and-true therapies exist, thanks to advances that eliminated the most basic medical issues and improved life for the majority of humankind. Thus, the margin for improving clinical outcomes is getting ever thinner, and clinicians are reluctant to try something new just for the sake of its promise. This means medtech companies can no longer rely on mere novelty to compel adoption.
Still, many manufacturers elect to get their advanced technologies to early adopters and hope their individual successes will spur marketwide adoption. Others try to use aggressive marketing programs touting the technology’s features and benefits to move the market, sometimes targeting patients themselves in hopes patient demand will sway the informed decision-making of clinical experts.
These methods rarely work, even when companies have seasoned leadership and adequate funding to support their development and marketing strategy.
Even when these methods work, they rarely generate a significant return on investment. Consider, for example, when Medtronic reportedly sank $100 million into a direct-to-consumer “sudden cardiac arrest” awareness campaign in hopes of jumpstarting slumping sales for its implantable cardiac defibrillator treatment. Or, think about how many seemingly promising technologies for treating benign prostatic hyperplasia (BPH) never really took off. These BPH technologies presented less invasive options, with presumably faster recovery than the current standard of care (transurethral resection of the prostate surgery), but they lacked evidence of a clear benefit and costed substantially more, rendering clinicians unimpressed and unmoved.
Failures like these are largely the result of economics, as well as the sheer breadth and depth of available successful technology options.