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In poll year, MedTech sector stands at crossroads in UK, US

MedTech is a lucrative but complex industry for investors. It has significant potential to transform healthcare, from early diagnosis and risk profiling to more effective treatments and better care, dramatically improving both economies and quality of life for people worldwide.

Advancing these technologies is in everyone’s best interest, but what happens when the information polarization plaguing the digital age creeps into our investments? Though many investors may feel immune to this bias, it is important to stay alert and consider how our environment may unwittingly impact critical financial decisions.

With the UK and U.S. facing critical elections, the MedTech sector stands at a crossroads. Political winds could rapidly change the course of healthcare innovation and investment. Paying attention to the relationship between politics, societal shifts, and healthcare innovation can aid investors in keeping a clear head and making decisions that are unclouded by bias. This perspective helps one to identify more promising opportunities, better evaluate risks, and make balanced decisions in an increasingly interconnected world.

We need to look no further than social media algorithms, built to prolong watch time and increase engagement, to see how the digital world feeds confirmation bias. Exposure to selective information fundamentally intensifies opposing viewpoints, and communities form in the shape of ideological bubbles. Going against these firmly established bubbles and reaching an unbiased consensus becomes increasingly difficult. Whether we realize it or not, these trends begin to impact which technologies to invest in and which innovations to fund.

Nationalism can also hinder our collaborative efforts, slowing innovation and driving up the cost of manufacturing lifesaving devices and technologies. The race to the top has also fueled cybersecurity attacks that attempt to steal innovations from other nations. The outcome of this year’s elections has the potential to either increase these challenges or open new avenues for international collaboration and innovation.

If we want to make it through this convoluted landscape together, we must first consider the myriad influences that could be clouding our ability to make rational decisions that benefit all.

Political climate and policies
As the UK and U.S. elections get closer, the MedTech community must actively observe the political debates and policy proposals that could shape the sector’s future. Regulatory framework, market access, and technological feasibility are shaped by the political climate.

Major political events, such as the upcoming U.S. and UK elections, shape the regulatory environment, underscoring the importance of vigilance and adaptability among investors. The rapidly changing political environment makes it both particularly challenging and essential for investors to remain informed and maintain a balanced perspective.

For example, Trump’s election in 2016 brought significant uncertainties to the healthcare market resulting from policy changes surrounding the Affordable Care Act (ACA). This affected companies that aligned their innovation with ACA’s provisions, such as the value-based care model and the use of electronic health records (EHRs). A potential policy reversal forced investors to wait for clarity on healthcare policies and their implications for a regulatory framework.

Digital and social media platforms
According to DataReportal, nearly 60% of the world’s population uses social media platforms, including 82% in the U.S. On average, people spend two hours per day on social media, excluding time spent on other digital devices and platforms such as media outlets and rapidly growing large language model (LLM) tools such as ChatGPT.

Social media algorithms have the potential to impact investors’ decisions and consumer adaption of innovations. During the Covid-19 pandemic, rumors about a link between the 5G cellular network and the virus circulated on social platforms, causing public fear and even resistance to 5G adoption.

Cultural and ethical considerations
Cultural values and ethical considerations continue to affect widespread acceptance of new technologies. Technological intervention in healthcare is praised as advancement in some societies and scrutinized in others. The most common cultural and ethical concerns relate to data and privacy issues. The election narratives around healthcare access and data privacy will likely influence public opinion and regulatory stances on MedTech innovations as we move into 2025.

Lack of access to healthcare data is the primary barrier slowing the advancement of AI-enabled technologies. Blockchain and NFT have massive potential in securing patient data through new ownership models, but the volatility of cryptocurrencies and speculative investments has significantly impacted adoption in healthcare systems.

Economic policies and inequalities
The MedTech industry is prone to high investment risk due to demanding and complex R&D, a complicated regulatory landscape, and extended time to the market. Favorable policies can de-risk and attract more investments. These include subsidies for healthcare innovation, including R&D funds, tax benefits, and co-investing.

Similarly, economic inequalities impact the accessibility and distribution of MedTech innovations, resulting in significant variations in healthcare outcomes in different regions. Investors must pay close attention to these factors as they impact scalability, market access, and the regulatory landscape. Election outcomes could lead to policy shifts that either amplify MedTech innovation through supportive economic measures or impose barriers through restrictive trade policies and regulations.

One trend is investment into subscription or pay-per-use models for MedTech technologies. Although lucrative in developed countries, these models can be limited in developing countries with no infrastructure for such a payment system. Unfortunately, these nations may have the most significant need for these technologies.

Healthcare systems and policies
The debates surrounding healthcare systems and policies are at the forefront of the upcoming elections. National healthcare systems’ policies and structure are pivotal to MedTech investment and innovation. For instance, incentivizing innovation through reimbursement models and providing clear, simplified guidelines around regulatory requirements and streamlined processes will accelerate adoption.

However, the complexity of the varying structures and policies among different products, healthcare systems, states, and countries can make it difficult for investors to gauge risk. As a result, promising international technologies can be stunted due to lack of funding.

For instance, the value-based care model introduced through the Affordable Care Act (ACA) in the U.S. encourages MedTech innovation and integration with the target of better patient outcomes and cost efficiency. Though these are positive goals, if MedTech technology is developed based on this reimbursement model, its scalability will be questionable and its global adoption will be challenging.

Strategies for navigating information polarization
Making informed decisions requires an understanding of cultural, societal, and political dynamics that can make or break MedTech ventures. Navigating polarization and societal impacts on investment in MedTech is of critical importance because human lives are on the line. If investors don’t have a balanced and informed approach, they will miss genuinely promising opportunities.

Opinion polarization and society influence shape investment and innovation in many industries, but in MedTech, the landscape is particularly complex. It is crucial to have a strategic approach to evaluating investment decisions in this arena.

The DECADE framework is a proposed approach to equip investors with a strategy to navigate information polarization. It encompasses Diversity, Expertise, Climate (political), Awareness, Culture, and Education:

  1. Diversity: Gather information from various sources such as industry reports, specialized and mainstream news outlets, and academic research to ensure a more balanced view.
  2. Expertise: Build a network of founders, reputable industry executives, regulators, academics, healthcare professionals, and technologists who can provide insights that counterbalance the polarized public opinion.
  3. Climate (political): Stay informed of political events, geopolitical situations, policy changes and legislation development, and use these to perform political risk assessments to better evaluate investment opportunities.
  4. Awareness: Develop a clear understanding of the healthcare system structures, regulatory environment, and requirements for each investment and stay attuned to political and policy changes on ventures.

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