Over the past couple of years, FDA-regulated industries such as the medical devices industry have witnessed a myriad of changes. The advent of value-based reimbursement models and accountable care has resulted in a seismic shift in the way top medical device companies operate. In the wake of this new era, focusing on data and the value of medical devices will not be enough to boost ROI. This has forced medical device companies to look for new avenues to boost revenues and profitability. Today, buyers expect medical device companies to offer solutions that bundle device, data, and analytics for improved decision making. And with the shift towards value-based care, medical device companies must offer solutions that can deliver actionable insights for use in existing electronic medical record systems. Our analysis of the global market landscape shows that the medical device companies are facing challenges in terms of-
- Adapting to the shift towards value-based models
- Maintaining profit margins with products that elude commoditization
Meeting such challenges can be made simple if medical companies leverage an interoperability platform to devise solutions with excellent data integration and aggregation capabilities. Apart from the challenges mentioned above, here are some of the other challenges faced by top medical device companies.
Increasing standards and overheads
Recently, there has been a drastic increase in the number of medical devices that are being manufactured and sent for approvals to the FDA. Studies indicate that the time taken for processing has increased by more than 55% in a span of five years. This poses a major challenge for medical device companies who are looking to outperform their competitors by launching more innovative products in the market.
Complexity of new medical devices
To stay on top of the competition, top medical device companies have started manufacturing products that are more complex and integrated when compared to their predecessors. This increase in the complexity results in a rise in the cost of field service and repair processes. Another point to note here is the fact that due to the increasing complexity of devices, the cost of training field service specialists and engineers has doubled.
Meeting customers’ expectations
Today, people all around the globe have access to the Internet and smartphones. Customers, therefore, have numerous choices and demand more from medical device companies, especially in terms of implementing more aggressive SLAs. The end-users of medical devices are also demanding more from their reduced capital and are now asking for better incentives.
Shift towards home-based care
With the growing popularity of home health care services and POC tests, medical device companies have had to migrate towards the production of home-based health kits. This threatens to reduce the spend on capital programs for developing new lab equipment.
Reimbursement reductions and rising competition
The implementation of new schemes to reduce reimbursements for medical assays by insurers is reducing manufacturers’ ability to fund capital for their new devices. In addition, high competition from emerging companies, such as start-ups, will reduce the profit margins of top medical device companies and erode customer loyalty.