2018 will definitely be an exciting year as major transformations and new entrants unfold!
Medical device industry trends for 2018 are reflective of the breakneck pace of discovery and innovation that has arisen in the life sciences industry over the past few years. In order to keep pace with their competitors, MedTech manufacturers around the world are increasingly fast-tracking their products to market, juggling the highest possible quality with reasonable design and manufacturing costs. As manufacturers begin to actualize the benefits of big data and analytics, artificial intelligence (AI), and new digital tools, the medical device industry faces a new wave of unprecedented opportunities for increased growth and market share. Some of the most poignant and relevant trends impacting strategy and operations for medical device businesses particularly this year and also, for years to come are compiled.
Trends that Will Influence the Direction of the MedTech Markets
Indian MedTech Market Continues to Record Robust Growth
The Indian MedTech market will continue to record healthy growth despite a hardened stance on pricing for essential devices. Currently valued at Rs. 27,736 crore, the market is expected to grow to Rs. 39,262 crore in 2021, predicts BMI research. Market growth will moderate over the next 6 years, reflecting an increasingly competitive operating environment and expanding market share for lower cost domestically produced products in some sectors.
The market will benefit from sustained economic growth and strong healthcare drivers. It will continue to reduce its dependence on imports, as local manufacturing expands under the Make in India initiative. The expanding private sector will remain the main growth driver.
Diagnostic imaging weakness will continue to hinder import growth, but growth rates in US dollar terms will improve due to a stabilization of the rupee against the US dollar. In the 12 months to January 2017, imports grew by 7.7 percent in local currency terms and by 3.5 percent in US dollar terms, taking the running annual total to Rs. 18,130 crore.
Despite an improved performance in 2016, headwinds to exports persist with a weak external demand outlook in key markets. In the 12 months to January 2017, exports grew by 8.7 percent in local currency terms and by 4.4 percent in US dollar terms, taking the running annual total to Rs. 7510 crore.
Proposals by the national regulator to introduce price caps on distributor and retail margins will alleviate pricing pressures for medical devices. This will help to negate industry concerns over the prospect of hardline pricing controls on a broad range of devices similar to those introduced for cardiac stents and artificial knee joints, which risk undermining investor confidence, impeding innovation, and provoking retaliation by India’s major trading partners.
2018 is expected to be an eventful year for the Indian MedTech sector, as manufacturers await key policy announcements. Finalization of the Draft Pharmaceutical Policy 2017 will be important for the pharmaceuticals sector. The introduction of the Medical Devices Rules 2017 will be a determining guideline. The year could also see healthcare services deepening its wings into regional markets as big hospital chains look to consolidate and technology-driven firms help break barriers to penetrate areas beyond the metros.
Streamlining Medical Device Manufacturing
These recent trends in healthcare emphasize the efficiency and convenience of embedding controllers, sensors, firmware, wireless connectivity, and remote monitoring into new devices. The demand for medical devices is not just about the delivery of care anymore. There are now health tech products that allow consumers to monitor their health, which can improve preventative medicine. By focusing more on prevention, costs can be reduced, which creates even greater incentive for getting advanced devices on the market faster. In order to fully harness the newest technologies, manufacturers need strategies to access in-house or contracted resources, to produce technologically advanced products with precision, speed, and regulatory compliance. This means the next generation of successful medical devices should focus on incorporating these leading-edge innovations: wireless network connectivity (Internet of Things, or IoT) and adoption of additive manufacturing methods, such as 3D printing.
Disruption from Outsiders
New medical device trends allow for healthcare startups to enter the once exclusive market. Rather than a members-only club, the medical device market opens its doors to small and startup companies, allowing them to compete. Even established players are beginning to develop innovative technologies and some partner with the smaller companies who already have them. The FDA is responding by announcing a pilot pre-certification program that reduces the wait time and cost of market entry for MedTech devices. The FDA skips analyzing the product and instead focuses on the developing company. If the FDA approves the company, they can build safe, reliable, and high-quality devices without needing approval on each individual product the company develops.
AI to go Mainstream for Imaging Diagnostics Segment
AI is expected to play a major role in the future of medical imaging by automating processes, improving workflow productivity, and increasing diagnostic accuracy. It is expected that operationalizing AI platforms across medical imaging workflows that leverage advanced or deep learning capabilities would result in 10–15 percent gain in productivity by augmenting the work of radiologists and improve screening outcomes in 2–3 years.
Blockchain Move from Hype to Real as Initial Established Use Case Generates ROI
Blockchain in healthcare, while still relatively immature, early enterprise B2B focused initiatives will provide meaningful demonstrations of the potential from this technology. For example, during 2018, the initial implementation of blockchain solutions will start to have early implication across insurance claim management, clearing houses, and revenue cycle management (RCM) outsourced vendor ecosystem. Furthermore, it will be an exciting year for the initial coin offering (ICO) or token sale activity with grand aspirations of disruption and consumer empowerment in the healthcare space.
New medical device trends for 2018 will see the fusion between pharmaceuticals and MedTech, two industries which used to operate within their own borders. But now, as more medical devices enter the market, more medical device manufacturers need to conduct clinical trials on their devices and are enlisting the help of pharmaceutical companies. MedTech companies, especially startups, leverage the expertise of drug companies to compete in the lucrative pharmaceuticals-device product market. Expect to see a rise in these combination products in 2018 and beyond. This medical device trend will reveal a revolutionary new level of value for healthcare providers and their patients. This partnership will foster innovative treatment options and continue to motivate MedTech development.
Big Tech Companies will see High Rewards from their Investments
Frost & Sullivan anticipates that during 2018, the FDA program designed to fast track digital therapeutics and health apps is expected to provide significant impetus for nontraditional participants such as Apple, Verily (Google), Samsung, and Fitbit to enter the medical-grade arena. Furthermore, there will be fundamental convergence of healthcare with IT and retail industries to leverage tech and business models related best practices to excel on the patient-centricity and innovation front.
Robotics Attains High Penetration
The need to enhance performance and rehabilitation of elderly patients and looming shortage of care workers is expected to propel the demand for global care assistance. Automation robots market is expected to cross USD 1.6 billion by 2018. As competition is expected to increase, finding the right type of partner for the right type of robotic technology in any segment will be key to gain early leadership and traction in this market. By 2025, 80 percent of surgical procedures will be performed with robots.
Asia-Pacific Countries take the Lead on Smart Hospital Projects
Several digital advances and market trends, including the smart city concept, are pushing the need for hospitals to become smart. By 2018, South Korea, Australia, Singapore, and Malaysia will account for approximately 3200 smart hospital beds. However, interoperability and cybersecurity will continue as major hurdles for the implementation of smart hospital solutions.
Cyberattacks on Healthcare Industry are Expected to Double During 2018
As the healthcare industry continues digitizing all of its information, it continues to attract more attention from cybercriminals. Entailing this it is likely that cybersecurity hacking will result in major multi-million-dollar risk for a MedTech or consumer device player. This makes it essential for governments, health authorities, and medical device OEMs to work more collaboratively to release frequent guidelines and manufacturer disclosure statements for stronger awareness as well as developing risk management solutions.
Integrating Medical Devices into the IoT
Practically every type of sensor one can imagine will be used for diagnostic reasons, such as biosensors, pressure sensors, impact sensors, wearable electrodes, chemical sensors, and optical sensors. Wearables are also predicted to become more complex and combine multiple emerging technologies, such as intricate molding designs, textiles and materials, as well as 3D printing, miniaturization, battery capacity, flexible circuits, and wireless connectivity. Leading-edge wearable devices may be connected to the Internet so they transmit important health data directly to a doctor. Since patients are becoming more tech-savvy, they expect more advanced technology incorporated into their healthcare. Additionally, care settings are changing from hospital and clinical environments to extended care facilities or the home. As the population continues to age, the need for devices in these environments will continue to increase. More people will want to self-manage their care, so it is important to have wearables and other remote diagnostic equipment that can transmit information daily to ensure patients are following their care plans. This is especially important for those suffering from chronic conditions, like hypertension and diabetes. As the IoT plays an increasingly larger role in daily life, health tech OEMs are rushing to develop newer medical devices, which take advantage of wireless networking capabilities. Some examples of IoT-enabled devices are infusion pumps, glucometers, inhalers, heart monitors, and insulin pens. The key IoT components for these devices include: connectivity using the newest and emerging standards, such as RFID or Bluetooth technology; remote 3D printing, and developing solutions that can extend the lifespan of the device.
Prototyping Devices through 3D Printing
Additive manufacturing is beginning to make a significant impact on the manufacturing of medical instrumentation. Through 3D printing, manufacturers can better customize parts to build devices or improve existing designs. 3D printing gives manufacturers the flexibility to make fast and easy changes during product development and refinements. The main benefits of 3D printing in additive manufacturing are faster prototyping, reduced costs, and more robust production cycles. Custom medical products, from individualized shoe insoles to prosthetic limbs can be customized through 3D printing. Up until this point, injection molding has been the preferred method due to speed. While the actual practice of injection molding is faster, a project must have a lead time of at least a few weeks to acquire the right tooling.
Overall, the MedTech industry is moving forward at a staggering pace. The demands of patients drive the health tech industry, which further drives innovative design and manufacturing. It is expected that wearable devices will play a larger role as patients demand more control of their care. In turn, these demands will largely transform diagnostic medicine, as well as the maintenance of patient health. The increased use of wearables could drastically change patient care by reducing doctor visits and identifying serious conditions before they become potentially life threatening. Lifespans could be increased, the quality of life could be improved, and medical costs could be driven down to the point that the savings are passed on to patients.
Things MedTech Should be Prepared for in 2018
MedTech companies making a list of new year resolutions might want to take note of a new trends report published by the consulting firm, North Highland. According to the report, cybersecurity and compliance are still top concerns across the healthcare and life sciences sectors, but 86 percent of leaders surveyed by the firm indicated that transformation and adaptability are key to competitiveness.
Cybersecurity was the top strategic priority for the healthcare industry, yet only 25 percent of survey respondents said they felt very prepared to address it. The low level of confidence in addressing cybersecurity likely stems from nuances regarding personal health information and Internet-enabled medical devices. While cybersecurity must be an actively-managed risk, it need not be the primary business strategy.
Transforming to be more efficient was cited as a definite competitive advantage by 62 percent of respondents, and 41 percent said it was much more important for 2018, but only 31 percent said they are very prepared to address it. While less than a third of healthcare leaders feel prepared to address this challenge, every healthcare company in the world could transform for efficiency. One of the challenges for this complex sector is that it has not historically been proactive in this realm. A holistic strategy where centers of innovation are communicating effectively would engender a more cohesive execution of transformation.
Innovation, IoT, and AI
The survey found that healthcare leaders feel ready to tackle areas that could lead to competitive advantages, such as product enhancement innovation, IoT, and AI. Despite this readiness, however, respondents indicated that they are focused on other priorities for 2018. While leaders may be focused elsewhere, there is an urgency for healthcare companies to use these tools to communicate and engage with customers. Healthcare is cumbersome whether consumers are purchasing medicine or medical devices, scheduling appointments, or seeking care or advice. Today’s consumers are accustomed to fast and easy mobile shopping and banking served up with proactive customer engagement. Unless healthcare becomes more hassle-free, people will look for the path of least resistance in how, when, and what they choose for care.
Adapting to changing customer needs and customer centricity was another priority the report uncovered, yet only 21 percent of those surveyed said they feel very prepared for customer centricity. Respondents called out lack of knowledge or skills, and budget pressures as barriers to adaptability. Lack of knowledge and skills is a massive challenge in healthcare. One such challenge is a lack of broad or disruptive thinking. If healthcare leaders consider applying solutions that have made a disruptive impact in other industries, they will find the competitive advantage they are seeking.
Healthcare can close the gap on shrinking growth if they gain a new perspective on the modern-day consumer. What do patients and caregivers want? What will make them stay or leave? The answer lies in understanding consumer motivations, needs, and wants.
Trends Impacting IVD Market in 2018
The in vitro diagnostics (IVD) instruments, kits, reagents, and related supplies market is projected to grow to USD 74 billion by 2022. Diagnostics providers are actively expanding into markets in developing countries, where there is a rising demand for quality healthcare services. However, stable IVD market growth is also expected in developed countries.
Some of the key trends fueling global IVD market growth include:
A Market Holding its Own
The IVD industry has been the beneficiary of genomic research and unfortunately the march of obesity, diabetes, cancer, cardiac disease, and infectious diseases, worldwide. These situations have created demand for highly specific, sensitive, and sometimes expensive tests.
Growth through 2021
IVD is a growing industry expecting to see annual gains looking ahead to 2021. The forecasted multi-billion-dollar gains include all laboratory and hospital-based products, and OTC product sales.
IVD companies are casting their nets in developing countries, where rising incomes and standards of living have sparked a new health consciousness and growing demands for quality medical care.
Aging Global Population
Among the key world events that bode well for the future: an aging worldwide population. Increasing numbers of people between the ages of 45 and 75 years in the industrialized world consume more healthcare services such as heart and cancer tests.
Big names in information technology – IBM, Apple, Google, Dell, and others – are making their mark in transforming crude test results into actionable medical information.
Genes and Disease Risk
The link between genes and disease risk provides an ongoing market opportunity for in vitro diagnostic research and product development in cancer, autoimmune diseases, cardiac conditions, allergy, diabetes, psychiatric conditions, and other diseases.
The Goal: New but Affordable
Often technology is far ahead of healthcare regulations and reimbursement plans. The onus is therefore on manufacturers to prove their new intervention is not only effective but also supplies a cost-effective treatment alternative.
An Informed Public
Wide dissemination of medical information in the media and on the Internet has spawned a more informed population that is prepared to seek out new technologies. The value of the consumer lobby has not gone unnoticed by diagnostic test marketers and this has become another tool in the battle to gain acceptance of newer diagnostics by healthcare payer groups – private and government-based.
No more blood sampling: be prepared for an in vitro diagnostic market of breath tests for conditions that includes respiratory infections, gastrointestinal disorders, cancer, and even chronic diseases. Wearable patch sensors have been commercialized for glucose and vital signs monitoring; more and more applications are in development.
Changing Core Lab
Not 10–15 years ago, most microbiology and anatomic pathology labs were tucked away somewhere in the basement. The major test areas were similarly separated by impenetrable walls. Those days are long gone: imagine a centralized hospital lab where clinical chemistry, immunoassays, hematology, coagulation, urinalysis, some microbiology, some cytology tests are all performed in one room and often on instrumentation that are linked by an automated track line and all in the same room. More importantly tests are carried out by a lab information system that consolidates test results to an electronic patient record, or EMR.
Point of care (PoC) testing attractions include heavy venture capital and company interest. PoC testing blends clinical and traditional medical engineering with telecommunications, information, and computer science, opening niche markets for PoC testing and devices. Diagnostics and patient monitoring will play a larger role in POC testing. Newer technologies entering developing countries, such as smartphone-linked diagnostic devices, can make huge differences.
Major Demand from the Developing World
Developing world’s demand for clinical chemistry products will increase faster than developed world’s demand as countries upgrade and expand healthcare systems. These improvements will boost the volume of patient testing, especially in the large expanding economies of Brazil, China, India, and Russia. However, a large share of developing world’s demand for clinical chemistry products will remain concentrated in lower value-added reagents and instruments for basic health screening. This trend will reflect continuing limits on the availability of healthcare funding and the less advanced nature of medical delivery systems in most countries.
We foresee another year of big disruptions, transformations, and innovations as the healthcare industry continues to overhaul outmoded business models. Advances in areas ranging from cancer immunotherapy products to blood testing, as well as the convergence of cutting-edge technology such as AI, IoT, and blockchain, will help shape the healthcare industry into a much-anticipated, value-based care paradigm.
2018 will definitely be an exciting year as major transformations and new entrants unfold!