Innovations in 2021 and beyond

While the far-reaching effects of COVID-19 have introduced the world to a new normal, the greatest impact has been in healthcare. In the long term, it has forever shaped the future of healthcare delivery, while its immediate effect has been on MedTech.

The calendar signal a new year but the MedTech industry in 2021 continue to feel the lingering effects, both positive and negative, from the global coronavirus pandemic.

The COVID-19 pandemic dominated every aspect of the medical devices industry in 2020. While the drop in economic activity has dampened revenue streams, demand for products, such as ventilators, oxygen concentrators, masks, and personal protective equipment soared, buffering the financial impact.

The pandemic has accelerated technological advancements that allow the treatment of care with limited physical contact, and the use of wearables that enable users to better track their own healthcare indicators and needs.

Home-based treatments, supported by remote healthcare professionals, have also risen in popularity as patients look to decrease their exposure to COVID-19, and seek alternative ways to access medical support.

This new way of working – reflected by so many industries affected by the COVID-19 pandemic – will likely shift patients’ expectations and preferences, leading to new norms in the healthcare sector, and in turn the provision of medical devices.

Overall, revenue for the medical, surgical, and scientific devices industry is expected to fall through 2020-21 as a result of the pandemic, despite the boost provided by higher demand for specialist equipment needed to combat the virus. It is then expected to recover slowly through the second half of 2021.

Globally, the medical devices industry has faced severe headwinds, with an intense focus on producing equipment, such as ventilators and PPE, and a fall in the demand for other equipment. Major production lines have been disrupted, and a mass deferral of elective surgeries has upended anticipated demand and associated supply chains. Some specific areas, which are non-essential and elective – such as orthopedics, for example – have seen a significant drop-off in demand.

The impact of the pandemic is likely to reverberate for years to come, with production unlikely to recover any time in the near future.

The global medical devices market in 2020 was valued at USD 456.9 billion, which is an increase at a compounded annual growth rate (CAGR) of 4.4 percent since 2015. Despite an expected decline of -3.2 percent in 2020, it is expected to rebound in 2021, with a 6.1 percent CAGR, and reach USD 603.5 billion in 2023. Private expenditure is expected to help boost financials, along with public injections of cash.

Technological advances are revolutionizing the medical devices industry, not only increasing the number of connected medical devices available to market, but also strengthening their role in healthcare.

Developments in wireless technology, smaller devices, and computing power are changing the landscape of the interconnectedness of devices. The data collected, analyzed, and shared from medical devices with healthcare organizations is allowing for better patient outcomes, lowering of costs, and presenting an additional revenue source. Properly integrating and disseminating patient information will only strengthen future growth in MedTech.

Some major trends attributed to technological advances, presenting new opportunities as well as challenges for medical devices companies: IoMT (Internet of Medical Things) to modernize healthcare. Significant innovations in new technologies, such as smart sensors, smart devices, and other lightweight communication devices, are driving medical devices that generate data into care pathways, creating alliances with IoMT systems. These advancements that help aid in the monitoring of biomedical signals and the diagnoses of diseases without human intervention are aiding healthcare organizations to improve patient outcomes, lower costs, and improve efficiency.

The role of MedTech is now even more important, serving as a value-based partner rather than just a developer and supplier of devices. The IoMT market is expected to grow to USD 285.5 billion by 2029, which is a compound CAGR of 28 percent.

Medical devices companies are looking at their business models and identifying ways to integrate IoMT in order to serve as partners for payors, healthcare providers, and patients. By harnessing the data and making it meaningful to healthcare providers, a new value-based program can be monetized.

According to Deliotte’s Reserach2Guidance, medical devices companies are starting to utilize the IoMT-connected infrastructure: 31 percent are offering data distribution channels as a service; 39 percent are incorporating data as an added value to justify pricing; and 43 percent are using data to drive business decisions.

For IoMT to successfully integrate into MedTech, proper integration between all parties across the IoMT ecosystem should be in place. Medical devices need to generate, analyze, and send accurate data to reveal the condition of patients and the effectiveness of the treatments in order to show true value.

Creating integrated platforms will allow for the information to be collected, shared, and accessed in an efficient and secure way. The key for successful IoMT is the accuracy and fluid transfer of the data providing an analysis of health conditions for healthcare systems and patients. The goal is to improve patient outcomes while reducing costs. These service-based solutions offer valued-based care, making medical devices companies a partner in healthcare rather than just a manufacturer or supplier.

Digital acceleration. The healthcare sector has long been a laggard in digital adoption, but the pandemic has delivered a massive jolt of urgency to embrace new tools and technologies. Providers rapidly scaled offerings and were seeing 50 to 175 times the number of patients via telehealth a few months into the pandemic compared with what they did before. Providers have also more broadly embraced digital engagement with patients and communities, such as proactively messaging about COVID-19-related protocols. Meanwhile, pharmaceutical and MedTech companies have expanded their investments in digitally enabled clinical trials and customer-engagement models.

Device connectivity as another source of revenue. MedTech is discovering an opportunity to create another revenue stream with data. Software-as-a-medical-device (SaMD) is transforming healthcare, empowering patients to be better informed and involved in their own health conditions. Patients with chronic conditions that require monitoring can obtain the data and share it with other healthcare professionals, allowing them to better manage their health. Those that are willing to share data can help improve their treatments and help medical devices companies enhance their products.

Currently, 40 percent of patients are willing to share personal data for medical research, while 35 percent are willing to share it with medical devices manufacturers according to a survey. This presents an opportunity for medical devices companies to monetize the sharing of data, where patients own the data, and proprietary tools are then used to distribute it to interested parties.

According to a survey by Deloitte Center for Health Solutions and AvaMed, all the medical devices companies questioned are investing in medical devices connectivity. Out of the group, 68 percent are creating payment structures to include SaMD. The portfolio of products, supporting services, and software technology surrounding patient data will produce better patient outcomes, lower costs, and aid in efficient patient treatments. As SaMD technology becomes less costly, more accessible, and sophisticated, it will influence healthcare delivery, research, and allow for more personalized treatment.

There are, however, some obstacles that need to be considered. Of all the medical devices companies surveyed, 77 percent stated combining data with new technology will be challenging. Medical devices companies will also need to source a workforce with skills set to innovate the development of medical devices software solutions. Additionally, regulation will be pressed into being agile and ready to address privacy concerns at all levels of information dissemination.

A trend experts expect to see in 2021 is tougher governmental regulations aimed to protect the privacy of patient information.

Workplace of the future. Many parts of healthcare require in-person care, but the pandemic has highlighted the extent to which healthcare can be delivered remotely, such as virtual care and remote patient monitoring, and virtual collaboration for professionals in the pharmaceutical and MedTech industries. This model supports greater flexibility and has enabled organizations to draw from a more diverse talent pool. One can now attract anyone, anywhere. Healthcare leaders are also reevaluating old workplace norms and introducing new measures, such as offering assistance to help combat videoconferencing fatigue. COVID-19 has led healthcare players to reassess work conditions and extend greater flexibility to employees.

Adapting to these shifts, along with myriad others, will require many healthcare organizations to transform their operations – and their mindsets. Prioritizing innovation during crises can help unlock growth in the recovery, provided leaders approach it with commitment and establish key capabilities and processes.

Robotics. The advancements in robotic surgery have led to a huge demand for minimally invasive robotic surgery (MIRS), both from physicians and patients, creating a double-digit growth rate within the last five years. The surgical robot market is expected to grow from USD 5.5 billion to over USD 24 billion by 2025, doubling the current one million MIRS procedures worldwide.

Physicians are increasingly recommending robotic surgeries to their patients due to the quality precision, better ergonomics, and the ability to have better control. On the patient side, their growing preference for minimally invasive procedures with the use of robotics is fueled by their desire to experience smaller incisions, less blood loss, decreased hospital stay, and a quicker recovery time. Overall, minimizing post-operative trauma and decreasing complications is a win-win for both sides.

This demand for MIRS is pushing the industry to create more technologically advanced surgical robots with increased accuracy, dependability, and ease of use. This will also allow various segments to grow and allow other procedures to offer MIRS.

Increasing telehealth adoption. Telehealth is forecasted to be an essential part of the health landscape. In a recent study by Deloitte, they anticipate the virtual health market in the United States to grow more than 23 percent annually over the next 5 years, reaching close to USD 100 billion by 2025.

Research shows that the future of health will likely include growth in virtual healthcare and telehealth. In many cases, it has already started to emerge that telehealth will better enable clinical care for people in remote or rural locations and people with limited mobility or a lack of transport.

The COVID-19 pandemic has been a significant catalyst for telehealth adoption. The success with telehealth has led to an active conversation of health professionals towards continuing telehealth consultations for many clients after the first major lockdown.

What used to be viewed as a last-resort alternative to in-person consultation is now a cost-effective first line of treatment for non-urgent illnesses and follow-up appointments. One can expect to see healthcare insurance companies work with their healthcare providers to broaden access to telehealth.

AR, VR, and increased collaboration. In medical devices development, it is critical to have constant communication between OEMs, partners, and suppliers. The COVID-19 pandemic has led many companies to step up collaboration to drive innovation and get products to market more quickly. Tools, such as augmented and virtual reality (AR/VR), emerged to help these efforts, and they will likely be part of the product development process in 2021 and beyond.

A trend that will have a dramatic impact on the future development of medical technology is the cross collaboration of multiple companies to create new product offerings. The lines are blurring between hardware and software vendors as customers are looking for multiple vendors to come together to provide the best solution for their clinicians and patients.

Large medical devices manufacturers are global companies and have employees based around the world. Augmented and virtual reality technologies can help them collaborate in real time as they develop the next generation of medical technology.

Some collaboration has benefitted everyone as devices companies and healthcare developers have focused on core competencies, allowing new solutions to advance quickly. These synergies will develop further as companies continue to explore new technologies in 2021. But after a period of high growth and close alliances, market will see consolidation in the industry as companies cement their collaborative partnerships.

Biosensors and wearables. Biosensors have emerged as a key technology because of their potential analytical tools used for the detection of an analytic with the assistance of a physiochemical detector, both in wearables and POC diagnostics. According to a report by Market Research Engines, although traditional laboratory techniques yield correct measurements, these area units are extraordinarily time-consuming, complex, expensive, and need pre-treatment of the biological sample. By contrast, biosensor-based devices give speedy, on-site and time period watching, while not the requirement for sample preparation.

In wearables, these biosensors will see increased use in continuous health monitoring, with the wireless sensors enclosed in bandages or patches or in a body-worn form factor. Biosensors predict the possibility of a patient’s worsening clinical condition and also monitor the impact of needed clinical interventions. Sweat, blood, and other biological agents are common analytes that are analyzed.

Strengthen cybersecurity. The threat of cybersecurity is now at the forefront for medical devices, with numerous exchanges of information and accessibility between healthcare providers, manufacturers, and suppliers. As technology advances, so does the sophistication of cyberattacks. Medical devices security can be implemented not only during the conceptual and developmental stages, but also extended throughout the product’s lifecycle in order to prevent cyberattacks. Though larger companies claim they are better prepared to handle cybersecurity issues, smaller companies need to react quickly and work together to minimize any harm to the flow of information.

The FDA recognizes that medical devices share the responsibility of cybersecurity threat across the ecosystem but specifically holds manufacturers primarily responsible for managing cybersecurity risks within their products. A security playbookwas created last year to assist healthcare delivery organizations to respond to threats of cybersecurity. There have not been any cases to date on attacks on medical devices. FDA commissioner Scott Gottlieb stated in October 2018, The FDA is not aware of any reports of an unauthorized user exploiting cybersecurity vulnerability in a medical device that is in use by a patient, but the risk of such an attack persists. Medical devices companies should be prepared to provide documentation of processes implemented to the FDA showing that cybersecurity risks are being managed.

In the EU, an agreement was made to the Cybersecurity Act in December of 2018, reinforcing the directive of the European Union Agency for Network and Information and Security. The purpose was to aid member states in fighting cybersecurity threats and attacks. It also addressed certification for certain information technologies regarding those that included medical devices.

Advancement in technology and the growth of information-sharing through medical devices are reshaping the landscape of healthcare. The world needs to be prepared to not only utilize the data to enhance patient outcomes, but also to safeguard their privacy. It will take regulatory agencies and medical devices companies to work together to create an infrastructure with defined expectations. Medical devices companies that are already investing in the technology, infrastructure, and partnerships amongst healthcare organizations have the potential for further exponential growth.

For medical devices manufacturers connected to the COVID-19 pandemic response, 2020 has been a year of growth. However, more broadly the industry has faced the same challenges as other manufacturing sectors.

Whether 2021 will see a return to previous growth trends, depends partly on global conditions – vaccine rollouts, and supply chain stability, for example – and also on how medical devices manufacturers navigate other challenges specific to their sector.

Here are three key medical devices manufacturing challenges that will affect the industry in 2021. Regulations and medical devices manufacturing in 2021. Historically, regulation of medical devices has lagged the more tightly controlled pharmaceuticals industry. This has been recognized and corrected for, however, with several major regulatory updates rolling out recently – or set to come into effect in the near future.

The key regulatory standards now at play in the medical devices industry include:

• ISO 13485:2016 – The International Organization for Standardization’s requirements for medical devices quality management systems. This was reviewed in 2020 and has been adopted by many countries globally.
• 21 CFR 820 – Overseen by the United States Food & Drug Administration, this Code of Federal Regulations sets out quality system regulations and good manufacturing practices for medical devices made or sold in the United States. It roughly aligns with ISO 13485, without being equivalent.
• The European Union’s Medical Devices Regulation (MDR) – formally known as Regulation (EU) 2017/745 – sets out rules for medical devices sold in the EU. Full compliance was due to be in force by May 2020 but has been delayed until May 2021 to avoid impacting the rapid rollout of a COVID-19 response, in particular the many new respirators needed worldwide.
• The Unique Device Identification System (UDI) final rule – US legislation requiring medical devices to be uniquely trackable in line with new UDI rules set out in the EU MDR regulations above. As of June 2020, enforcement of UDI legislation has been delayed for some classes of medical devices until 2022 due to COVID-19 disruptions.

Two key themes emerge from these new and updated regulations. Medical devices manufacturers and distributors – whether they are selling tongue depressors or sophisticated diagnostic machinery – need robust and well-documented quality management systems in place.

They also need the ability to identify and track individual products – and sometimes components – through the entire manufacturing processes, and beyond into post-sales and servicing.

Serial number tracking of medical devices – and the ability to easily report on serial numbers from within medical manufacturing software – will therefore be a key ability for all medical devices manufacturers in 2021 and beyond.

Combating counterfeiting in the medical devices industry. One in 10 medical products is substandard or falsified in low- and middle-income countries according to World Health Organization (WHO) estimates.

That presents a serious challenge to medical manufacturers from a risk perspective – buyer trust is eroded when less effective or outright fraudulent products are presented under their branding. There is also a significant impact on manufacturers in terms of complying with regulatory attempts to combat counterfeiting.

The WHO classifies counterfeit products as ‘SF’, which designates them as either:

Substandard. These are authorized medical products that fail to meet either their quality standards or specifications, or both; or

Falsified. These are medical products that deliberately/fraudulently misrepresent their identity, composition, or source.

Both are of concern to legitimate manufacturers. The existence of compromised componentry or ingredients in the supply chain in particular can lead to faulty end products and leave a business legally vulnerable, for example, to a class action suit against a product that causes harm or fails in its intended use.

Studies by WHO members on countermeasures against SF medical devices have assessed the multiple solutions at play, including

Batch tracking of medical products. A means of identifying bulk items as they are produced, distributed, and received.

Serial number tracking for medical products. The gold standard, whereby products and even medicines are identifiable down to the individual unit.

Bar code identification. A simple means of recording unique identifiers using inexpensive handheld scanners.

Data matrix codes (also known as Q-codes). These allow the storage of a large amount of information in a small space that are readable by mobile devices.

RFID tags. Very large amounts of data can be stored, and reading can be passive, for example, through sensors at warehouse entrances. However costs are higher making broad compliance more difficult.

To date, WHO research has pointed to serial number tracking as the best means of protection for end users of health products, with simpler scanning technologies as the most realistic and cost-effective way to authenticate serial numbers, given the scale and complexity of the problem, and the connected nature of the medical supply chain.

Meanwhile other technologies available to manufacturers of high-value medical devices include programmable DNA that can be incorporated into materials as well as packaging so that they carry a data signature – plus etched nanoparticles of silicon dioxide that can also carry invisible authentication data.

High medical devices distribution costs. A third major issue impacting medical devices manufacturers into 2021 and beyond is the high cost of accessing the market. According to Canadian medical devices design service provider StarFish Medical, distribution costs routinely account for more than 50 percent of all margin for medical manufacturers.

This expensive model also affects procurement, with the task of sourcing reliable, compliant, and traceable medical materials and components typically soaking up a further 25 percent of margin.

With such slim margins remaining to drive profitability, it ultimately falls to CFOs and financial advisors to continuously monitor margins and track the performance of individual SKUs across different markets. And as disrupted supply chains and distribution networks bleed into 2021, these key financial decision makers will require much more responsive, real-time margin reporting from their medical manufacturing software.

Ideal solutions for the medical manufacturing sector should be able to draw insights directly from manufacturing and inventory management software. Modules such as Unleashed’s BI Vision, for example, are able to interrogate precise margin data across hundreds of SKUs in any location – and with accurate landed costs factored in – allowing users to spot costly spikes before they become serious problems.

Ultimately, if the medical manufacturing industry is able to navigate these unique regulatory and market challenges, it will continue to expand as world demand for quality medical products and technology grows.

The pandemic has raised the importance of healthcare organizations actively choosing, evolving, accelerating, and extending their innovation efforts, reveals a recent McKinsey survey.

Choose. In a world of dynamic change and heightened uncertainty, it is more important than ever to actively manage portfolios of innovation initiatives, consciously choosing to invest in innovation during a crisis. By regularly reviewing their innovation pipelines, organizations can identify initiatives that are less likely to succeed based on the latest data and assumptions, while strengthening investments in projects with high potential. Deprioritizing some initiatives will be particularly critical for organizations plagued by staff burnout and resource constraints.

As focus on areas such as infectious diseases and testing grows, incremental innovation likely will not be enough to stay abreast of competitors. Bold bets are necessary, and multiple executives in the survey cited the value of a startup approach and scrappy mindset in seizing opportunities. The respondents also reported a greater willingness to take risks and use agile decision making to determine how best to address new business segments. In fact, several companies have adapted their operating models to purposely select and test multiple ideas quickly rather than committing up front to a single path. One large healthcare provider, for example, has adopted a new decision-making process that includes key stakeholders from across their system, which has allowed the provider to speed up decisions across a broad portfolio of initiatives.

The organization has found that this model leads to decisions and outcomes that are as good or better than under the previous model, in which they analyzed reams of data and performed weeks of analysis.

Evolve. Another priority that healthcare executives cited was evolving their business models to address new delivery constraints and client expectations. This finding is in line with our recent analysis of profit pools in the sector, which suggests healthcare players that develop innovative business models will generate disproportionate value. Several digital health companies have embraced virtual healthcare delivery, while wearables players have adapted their offerings to include monitoring for COVID-19 symptoms.

Companies are also streamlining their customer support by introducing virtual assistants and using new technologies, such as augmented reality. One medical technology firm, recognizing that its customers want more flexibility, made its products available as a service, which led to a surge in demand.

Accelerate. From vaccines to new designs of PPE and ventilators, numerous recent examples demonstrate the healthcare sector’s ability to innovate at previously unimagined speeds. In the United States, the US Food and Drug Administration deployed a range of measures (such as issuing new guidance, establishing new industry engagement models, and issuing emergency use authorizations) designed to support the COVID-19 response across the range of products it regulates. In several instances, the FDA stipulated or requested that manufacturers gather data derived from the real-world use of products in order to better characterize performance, understand supply-chain vulnerability, and support additional development activity, both throughout and beyond the pandemic.

Rapid development and deployment of innovations will continue to be critical in the post pandemic world. One executive noted that healthcare has started to embrace the beta mindset and soft launch models of releasing test versions (where safety permits) that are improved based on user feedback. Another described his life-sciences company’s shift to a product-as-a-service model in just 6 months – a change that in the past would have taken up to 5 years.

Extend. The COVID-19 pandemic has highlighted the benefits of nontraditional and creative partnerships and collaborations in quickly finding creative solutions to urgent problems – from the health and auto industries teaming up to build ventilators, to pharmaceutical sector competitors collaborating to hasten the development of a COVID-19 vaccine, to healthcare providers partnering with technology companies to deliver COVID-19 apps and solutions. Experts expect such extensions of the healthcare ecosystem to be the way of the future, with more partnerships and consortia that pool capital, assets, and capabilities, both to bring operational synergies and drive innovation.

From the rise of the sharing economy in the wake of the financial crisis to airport security measures following the 9/11 attacks, deep crises tend to create shifts that stick. The COVID-19 crisis is likewise bringing changes to the healthcare sectors that are here to stay. As past downturns have shown, innovation is a critical part of any recovery and will be necessary for healthcare players to stay abreast of their industry. To succeed, leaders should place particular focus on four of the eight essentials of innovation – choose, evolve, accelerate, and extend – while ensuring that end-to-end fundamentals are in place.

COVID-19 and MedTech. COVID-19 significantly impacted the MedTech industry in 2020, and continues to reshape it in 2021.

Specifically, the pandemic boosted consumer adoption of many innovative technologies and highlighted the importance of adaptability in the medical space. Expect to see even more MedTech innovation in 2021 and beyond.