Connect with us


MedTech industry poised for a giant leap

Medical devices companies lagged relative to IVD makers in 2021, but are poised for outsized growth in 2022 and beyond.

Global healthcare spending will rise by 4.1 percent, year-on-year, in 2022 as countries rise to the diverse challenges of coronavirus and non-coronavirus care. This will be a slowdown from the 9-percent growth seen in 2021, when many countries were spending heavily on vaccines. However, it will still be among the fastest growth rates for a decade. Moreover, as a share of global GDP, healthcare spending will remain at 10.5 percent, up from 10.2 percent in 2019, and only marginally lower than in 2020, when the economy contracted.

Despite the cost of vaccination programs, from 2022 onwards expect growth in healthcare spending to slow as governments seek to reduce budget deficits and pay down foreign debt. Some may be forced into austerity budgets as creditor patience wears thin. Nevertheless, the underlying trend in terms of global healthcare spending is still upwards, driven by economic recovery as well as population aging, advances in treatments, and the expansion of public healthcare systems.

Although the pandemic has challenged the healthcare and life sciences industries in many ways, the disruption has also created some lasting innovations – managing patient care during the pandemic spurred the uptake of telehealth as a consumer-centric treatment modality and recognition of how value-based care elevates patient outcomes. And the response to the virus accelerated advances in science, e.g., mRNA vaccines and monoclonal antibody treatments that have set new expectations for how quickly new molecules and biologics can go from lab to patient use.

The industry has seen a massive wave of investment, innovation, and new entrants from the technology, telecom, and consumer industries. In 2021 alone, USD 44 billion was raised globally in health innovation – twice as much as 2020 – and the acquisition of health and health tech companies rose 50 percent.

Diagnostic labs have proven to be reliable long-term investments, and in 2021 investors showed great interest in lab consolidators as well as companies that specialize in earlier disease detection. Covid-19 testing has provided significant cash flows; while testing volumes fluctuated as vaccinations rose, waves of Covid-19 variants are likely to require further interventions from these operators.

While Covid-19 disruptions could continue for months, experts believe strong fundamentals and robust innovation will fuel growth across healthcare sectors in the year ahead.

Breakthrough innovation in the biopharma industry – particularly in oncology, immunology, and certain rare diseases – is generating a rich opportunity set for specialist investors. Key medical-technology companies are also facilitating significant drug development, and are benefiting from the increased spending and proliferation of new drug candidates. Finally, diagnostics companies are helping with widespread Covid-19 testing while also creating more convenient routine medical tests and, increasingly, enabling early cancer screening.

Importantly, the overall delivery of healthcare continues to evolve. The US, for example, is experiencing a decades-long transition toward a fee-for-value payment system from a fee-for-service approach. This shift encourages new business models and supports substantial growth potential for lower-cost care models.

These tailwinds across the various healthcare subsectors, coupled with strong valuation support, leave us with a more positive outlook for the sector than ever before.

Indian MedTech market
With the Covid-19 pandemic testing even the more developed healthcare systems globally, the foundations of India’s healthcare system have naturally also been shaken. From USD 10.36 billion in 2020, the Indian market for medical equipment is expected to reach USD 11.86 billion in 2022, and is expected to increase at a 37-percent compound annual growth rate (CAGR) to reach USD 50 billion in 2025.

From USD 10.36 billion in 2020, the Indian market for medical equipment is expected to reach USD 11.86 billion in 2022, and is expected to increase at a 37-percent compound annual growth rate (CAGR) to reach USD 50 billion in 2025.

Massive expansion of medical facilities factored in and introduction of the Medical Devices (Amendment) Rules 2020 is there to boost the demand for medical devices in the market. On the policy front, the Indian government is undertaking deep structural and sustained reforms to strengthen the healthcare sector. Recently, the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India, has presented an Approach Paper on Draft National Medical Devices Policy 2022 for consultation. In order to drive the growth of the sector, the paper has been prepared with the aim to facilitate an orderly growth and provide a clear direction to meet the underlying objectives of accessibility, safety, and quality, while ensuring focus on self-sustainability and innovation.

The sector requires special coordination and communication among industry and stakeholders because of its diversified nature, continuous innovation, and variation. The Department of Pharmaceuticals (DoP), Ministry of Chemicals and Fertilizers, through various programmatic and schematic interventions, such as the PLI scheme for promoting domestic manufacturing of medical devices and the promotion of medical devices parks, intends to encourage the domestic manufacturing of medical devices. Realizing that the sector demands a high level of coordination between the regulators who have a specific legal function but are spread over various departments, such as DoHFW, Consumer Affairs, Atomic Energy Regulation Board, National Institute of Biologicals, MoEF&CC, the DoP attempts to resolve many of the issues through institutional arrangements, viz., standing forums and regulatory round tables.

The proposed policy strives to put in place a comprehensive set of measures for ensuring sustained growth and development of the MedTech sector and address the further challenges of the sector, such as regulatory streamlining, skilling of human resources, lack of technology for high-end equipment, and lack of appropriate infrastructure, through a coherent policy framework.

In addition, the marketing practices of the medical devices sector are currently being voluntarily regulated by the Uniform Code for Pharmaceuticals Marketing Practices (UCPMP). Based on the request of the MedTech industry to have a separate uniform code and having realized such needs, the Department of Pharmaceuticals (DoP) has prepared a separate Uniform Code for Medical Devices Marketing Practices (UCMDMP) in consultation with the industry.

A parliamentary panel has also recommended framing a new price-control regime, specific for medicines and medical devices for Covid-19 management, and putting them under price control with no annual increase in prices allowed till the pandemic is entirely over in the country.

The Parliamentary Standing Committee on Chemicals and Fertilizers recommended covering medical devices for Covid-19 treatment under the National List of Essential Medicines for effective price control, while also suggesting exemption of basic customs duty and GST on medicines and medical devices for fighting the pandemic. The Committee, therefore, recommends that all medical devices critical to Covid-19 treatment, like ventilators and oxygen concentrators, should be covered under the National List of Essential Medicines for effective price control.

Arguing that the price range of oxygen concentrators is still on the higher side even after trade margin rationalization (TMR), the panel recommended that the DoP and the National Pharmaceutical Pricing Authority (NPPA) should consider capping of the prices of various types of oxygen concentrators so as to make them affordable to common man.

In the year 2020, in an effort to boost local manufacturing, the government took a policy decision to stipulate no global tender enquiry (GTR) will be invited for tenders up to ₹200 crore. Accordingly, an amendment was made in General Financial Rules (GFR). However, it was also said that relaxation can be given in special cases. The government has also announced conducive policies for encouraging foreign direct investment (FDI). In fact, India’s FDI regime has been liberalized extensively. Currently, FDI is permitted up to 100 percent under the automatic route (i.e., a non-resident investor or an Indian company does not require approval from the Government of India for the investment) in the hospital sector and in the manufacture of medical devices. In the pharmaceutical sector, FDI is permitted up to 100 percent in greenfield projects and 74 percent in brownfield projects under the automatic route. In the AYUSH sector as well, 100-percent FDI is permitted for the wellness and medical tourism segment.

In March 2021, the government also announced a new PLI 2.0 scheme for promotion of the in-vitro diagnostics market.

In September 2021, the union government notified a scheme to promote medical devices parks at a financial outlay of ₹400 crore till financial year 2024-25. The financial assistance for a selected medical devices park would be 90 percent of the project cost of common infrastructure facilities for the northeastern and hilly states. For the rest, it would be 70 percent. However, maximum assistance under the scheme for one such park will be ₹100 crore.

To sum up, Indian MedTech industry has been growing at double-digit rates and has evolved significantly in the last decade. However, a number of challenges need to be addressed in providing access to quality, affordable healthcare, and making this sector self-sustainable.

Indian MedTech industry has been growing at double-digit rates and has evolved significantly in the last decade. However, a number of challenges need to be addressed in providing access to quality, affordable healthcare, and making this sector self-sustainable.

India is finally poised to take giant leaps in the medical devices sector.

Indian hospital industry
India’s hospital industry has shown remarkable growth in the recent past, and the momentum will certainly continue in FY’23 with improvement in occupancy, better case mix, and sustainability of current ARPOB. Beyond FY’23, the Indian hospital industry will be more focused on growth as they are adding new capacities, largely through brownfield expansion for faster operationalization of beds and lower startup costs and scaling up other ancillary businesses to tap further opportunities.

Overall health spends are expected to grow at 16–18 percent CAGR, driven by improving affordability and increasing incidence of non-communicable diseases. Private hospital players are expected to be the largest beneficiaries with 65–70 percent share of healthcare spends with incremental gains from standalone hospitals/nursery centers to even large corporate hospitals during Covid-19.

Large corporate hospitals like Apollo Hospitals Enterprise, Narayana Hrudayalaya, Healthcare Global Enterprises, and Aster DM had an aggressive investment phase over FY 2016–18. The benefits of that were visible in FY’20 onwards. Most players are in a consolidating phase till FY’22. As hospitals reach their optimal level of utilization, a fresh level of CapEx is expected. However, this time, hospitals are in a better position to fund new CapEx, and will be aided by internal accruals. Further, hospitals are looking to add additional capacities through brownfield expansion for faster operationalization of beds and relatively lower costs.

Hospital companies are scaling up ancillary business like third-party diagnostics, retail pharmacy, and digital business for future growth. Scaling up of ancillary businesses and potential spin-offs could be a value-unlocking opportunity. Apollo Hospitals Enterprise, Fortis Healthcare, and Max Healthcare are best players in this theme, with ancillary business contributing ~5–27 percent to total EBIDTA in FY’24E.

Leading hospitals have reduced leverage over last 2 years, given low CapEx intensity and scale up in profitability. Hence, expect them to continue generating strong FCF annually after factoring annual brownfield CapEx streamlined over next 2–3 years. 48+ percent EBITDA CAGR over FY 2021–24E and 18-percent EBITDA CAGR over FY 2022–24E are expected. Overall RoEs are also likely to sustain at 15+ percent for Apollo Hospitals Enterprise, Aster DM Healthcare, Krishna Institute of Medical Sciences, Max Healthcare, and Narayana Hrudayalaya despite CapEx intensity going up.

Expansion plans across leading hospitals
Apollo Hospitals Enterprise. The company has pursued aggressive expansion (25–30% capacity expansion) in past few years and created a strong growth platform. The company’s digital foray (2021) makes it a strong omni-channel player whereas strong presence in offline format makes it a formidable player than pure-play online companies.

Leading hospitals – Operating dynamics

(Q3 FY’22)
Apollo Hospitals    Aster DM Healthcare    Fortis Healthcare  HCG      KIMS    Max Healthcare   Narayana Hrudayalaya  
No. of
44 14 24 25 9 16 20
7,860 2,907 3,881 1,702 2,590 3271 6,181
Avg revenue
per occupied
bed (₹/day)
46,062 33,600 50,959 38,317 23,189 61,000 32,055
Avg length
of stay (days)
4.3 3.4 NA 2.1 4.8 4.3 4.6
Gross block
per bed (₹ in mn)
10 17 13 7 3.5 11 4.5
Q3 FY’22
occupancy (%)
66 65 65 55 61 77 NA
9M FY’22
hospital OPM (%)
for India operations –
post IND AS
23.0 16.6 16.0 16.9 31.0 26.0 11.0
Company, PL

Apollo is expected to generate ~28 percent of EBITDA from non-hospital segment in FY’24, i.e., pharmacy and retail health. It is looking to partially stake sale in pharmacy/24×7 digital business for funding growth and creating one of India’s largest omni-channel platform. Further, Apollo is also scaling up its third-party B2C diagnostics segment, which will create significant value, going forward.

The company will continue to explore bolt-on acquisitions in markets like NCR and Mumbai, where it has limited presence and can also add 1000–2000 beds through brownfield expansion in hospital segment. On pharmacy side, it will continue to add 300–400 net stores annually.

Aster DM Healthcare. The company has a unique business model with presence in India’s growing healthcare industry and an established business with strong returns in GCC. 26 percent EBITDA CAGR over FY 2021–24E is expected as margin in its India business gradually improve and new hospitals ramp-up in the GCC.

Aster is looking to add 145 beds in Oman by end of FY’22. In India. 276 beds are planned through brownfield expansion in its Whitefield hospital (Bangalore) by H1 FY’23-end. Further, the company will continue with O&M opportunities. It will also look to expand clinics under Aster Lab business.

Fortis Healthcare. Fortis had legacy issues, wherein they had inefficient capital structure. Post IHH entry in FY’19, FORH witnessed strong recovery across segments. Margins across segments is expected to improve, given increasing volume in diagnostics business and improving product mix in hospital segment along with cost rationalization initiatives. 58 percent EBITDA CAGR (16% over FY 2022–24E) over FY’ 2021–24E is expected.

The company has re-initiated its investment plans for bed expansion in select existing facilities, such as Noida, BG Road, Anandapur, Mulund, Shalimar Bagh, FMRI, Mohali, and Arcot Road, which will see a cumulative addition of ~1300 beds over FY 2022-25E

Fortis owns 57 percent stake in SRL – one of the top three diagnostic chains in India. The company has been expanding aggressively with collection centers to increase its B2C share. Over last few quarters, the company growth recovery has been in line with peers.

HealthCare Global Enterprises. HCG’s asset-light approach, with focus on partnering, has made its business model capital-efficient and scalable. The company operates most of its comprehensive cancer centers (CCC) on lease/rental basis, with HCG investing only in equipment. HCG is in a consolidation mode, and given reducing CapEx intensity, profitability is expected to improve from FY’22. A 62-percent EBITDA CAGR over FY 2021–24E (23% CAGR over FY 2022–24E) is expected after adjusting for IND AS.

HCG has no major CapEx; in phase of consolidation.

Max Healthcare Institute plans to expand 2300 beds (70% of current capacity) over next 5 years at existing locations, such as Saket complex (Delhi), Nanavati (Mumbai), and Shalimar Bagh (Delhi). These are brownfield expansion at locations, which are already running at optimal occupancy, and capacity enhancement will be EBIDTA-accretive. Further, the company has recently added 300 beds in NCR market (Dwarka location) on O&M model, which will get commercialized in FY’24.

The company’s operational efficiency (EBITDA/bed at 4.5× vs. 0.9–2.5× of peers) has been commendable in competitive markets like NCR. Company’s EBIDTA growth (61% CAGR over FY 2020–22) has been phenomenal in past two years. The company’s expansion plan (2× bed addition over next 5 years), improving payor mix (reducing low-margin institutional mix, which is at 31%), and scale up in labs business will aid growth momentum in medium term.

Max Healthcare’s non-captive business Max Labs and Max Homecare witnessed strong traction during Covid-19. The company is expected to generate ₹100 crore of EBITDA over next 2–3 years from current level of ₹30 crore.

Narayana Hrudayalaya intends to step up investments to upgrade some of its existing facilities post Covid environment. The company will be exploring bolt-on acquisitions/greenfield in markets like Kolkata, Bangalore, and MMR.

The company’s India business got most impacted from Covid due to higher reliance on elective surgeries, international patients, and company ethos of not charging much for vaccine and other Covid-related revenues. Expect EBITDA CAGR of 20 percent (21% over FY 2020–24E) over FY 2022–24E, driven by good performance in Cayman, consistent growth in mature India hospitals, and ramp-up at new facilities. This also would lead to superior return ratios at 25 percent by FY’24E.

Krishna Institute of Medical Sciences. KIMS will be adding 650 beds through brownfield expansion across its Kondapur, Vizag, and Anantpur units for total CapEx of ₹380 crore over FY 2021–25E. Further, the company is looking to add additional 1000–1200 beds through greenfield across Chennai, Bangalore, and Maharashtra regions.

KIMS’ robust cost control, low capital-intensive set-up, value-accretive acquisitions have ensured good profitability. EBITDA has grown at 40 percent CAGR over FY 2018–22. The recent acquisition of Sunshine is value accretive. This coupled with brownfield and greenfield expansion of 1500+ beds over next 3–4 years will enhance capacity by 65+ percent.

Major CapEx expansion through brownfield

Existing operational beds

Expansion plans
No. of beds


Apollo Hospitals 7860 2000 Management guiding for 2000 beds over next 3 years addition across NCR, Mumbai, and Bangalore region through brownfield and greenfield expansion
Aster DM Healthcare 3828 1860 GCC-295; India – 1565 bed expansion over next 3–4 years
Fortis Healthcare 3881 1500 Re-initiated investment plans for bed expansion in (brownfield) facilities, such as Shalimar Bagh, Noida, FMRI, Mulund, Mohali, and Anandpur over next 3–4 years
HCG 1702 No major CapEx; in phase of consolidation
KIMS 2590 2400 Sunhsine acquisition to add 600 beds from FY’23; 1100 bed addition across Chennai, Bangalore, Maharashtra through greenfield while 700 bed addition through brownfield across Kondapur, Anantpur over next 4 years
Max Healthcare 3271 3300 Out of 3300 beds, 2300 bed expansion though brownfield across Saket, Nanavati
Narayana Hrudayalaya 6181 200 150–200 beds brownfield expansion over next 2 years; Cayman new facility to add 50 beds from FY’24

Global MedTech market
The market is projected to grow from USD 455.34 billion in 2021 to USD 657.98 billion in 2028 at a CAGR of 5.4 percent in the 2021–28 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over. The global medical devices market size was USD 432.23 billion in 2020. The global impact of Covid-19 has been unprecedented and staggering, with medical devices witnessing a negative impact on the adoption rate across all regions amid the pandemic. Based on analysis, the global market exhibited a decline of 3.7 percent in 2020, as compared to the average year-on-year growth during 2017–2019.

Many life-science tools and diagnostics companies excelled during the pandemic. Companies involved in the development of diagnostic-testing equipment were in high demand as were those selling critical-care equipment to help hospitals cope with the surge in Covid-19 patients. Life-science tools companies, in particular, have strong fundamentals as they support both increased biopharma R&D and robust bioprocessing demand that helps bring advanced therapeutics to the market.

Importantly, many of these companies could exit the pandemic stronger than they entered, as a rise in their installed customer base should lead to increased recurring revenue in the years to come. Additionally, the pandemic has spurred governments globally to reassess their emergency preparedness. This should provide new sources of demand for many diagnostics companies, as well as increased government funding for life-science research.

Medical devices companies lagged relative to IVD makers in 2021, but are poised for outsized growth in 2022 and beyond. The pandemic caused a halt in elective procedures, brought on first by hospital cancellations and compounded later by patient skittishness to schedule elective care. However, this drop in demand did little to slow the prevalence of underlying diseases across patient populations. We Expect to see strong multi-year demand in categories, such as aortic-valve replacements, cataract surgeries, colonoscopies, and others that have been deferred since the pandemic.

Notably, lost in the short-term implications of Covid-19 is the fact that innovation pipelines across medical technology firms have never been stronger, with far more attractive medical-devices categories poised to accelerate in the 2020s compared to the 2010s. In the coming years, many firms will grow their addressable market through geographic expansion, new technologies, and the use of existing technologies to treat new patient populations.

MedTech trends worth watching in 2022 and beyond
Moving into the third year of the pandemic, healthcare professionals around the world continue to face unrelenting workloads and acute staff shortages. Over time, the continued rise of chronic diseases, increasing healthcare costs, widening inequalities, and climate change will only add to the strain if the industry does not urgently rethink how and where care is delivered. In the meantime, patient and consumer expectations of healthcare are changing. Future health systems will need to deliver care that is more accessible, scalable, and equitable, while helping to preserve the health of the planet.

Assuming the Covid-19 pandemic recedes in severity, if not cases, 2022 brings the potential to re-focus on the trends that benefit MedTech globally – an aging population that requires more healthcare and the increasing access to healthcare in emerging markets. However, global cost pressures will remain as fee-for-service payment models continue to decline, replaced by payment for outcomes and risk sharing. In addition, price pressures, like those created by China’s new national centralized tender program, will squeeze profits. Here are a few additional MedTech trends worth watching in 2022.

Assuming the Covid-19 pandemic recedes in severity, if not cases, 2022 brings the potential to re-focus on the trends that benefit MedTech globally – an aging population that requires more healthcare and the increasing access to healthcare in emerging markets.

The European regulatory landscape will continue to be problematic in 2022, the first full calendar year of the EU MDR and featuring the introduction of the EU IVDR. Although IVDR certification timelines have recently been extended beyond the formal date of application in May 2022, problems remain. Prior to IVDR and its new concept of classifications, only ~20 percent of IVDs had to undergo an assessment of conformity by a notified body. Now as many as ~80 percent will need a notified body assessment. However, for a variety of reasons, there continues to be a shortage of notified bodies. Even if the notified body shortage begins to recede in the back half of 2022, clinical (performance evaluation) requirements and post-market requirements will present significant challenges for both MedTech and IVD manufacturers. Looking ahead to 2023, as manufacturers overcome these EU regulatory hurdles, they will need to prepare for the UK Conformity Standard, which will be required starting in June 2023 for all devices entering the UK market.

Fundamental shifts in medical devices sales and servicing, created by the combination of our increasingly digital world and the impact of the pandemic, are here to stay. Marketing, sales, training, and servicing are moving rapidly toward virtual channels, resulting in greater utility and convenience for clinicians and their institutions, and better efficiency for manufacturers. No doubt certain free services that hospitals and clinicians have come to depend on will likely remain (e.g., assistance with complex procedures and training on devices use). Numerous studies indicate that both clinicians and sales reps prefer virtual engagement, and this transition should lead to seamless customer data, which should in turn drive stronger relationships and higher satisfaction. However, virtual engagement will put pressure on MedTech manufacturers, who have traditionally not been at the forefront of digital innovation, to build customer-centric digital systems that address a broad range of customer needs across sales, training, servicing, inventory management, and beyond.

Using predictive analytics to proactively manage transitions of care. For hospital leaders faced with unexpected surges in patient demand, the ability to anticipate and adapt to rapidly changing circumstances has become more essential than ever. What if one could predict potential bottlenecks in patient flow in real time – and prevent them before they occured? Healthcare providers are increasingly sharing data in real time to visualize untapped capacity, to proactively facilitate transitions of care from one setting to the next, and to forecast and prepare for future demand. Using the power of AI and predictive analytics, experts can now extract relevant insights on patient flow and patient care needs from vast amounts of real-time and historical hospital data, to predict capacity needs in the next 24 to 48 hours. After initial validation, the resulting algorithms can be updated on a regular basis to take recent trends and circumstances into account – offering clinical and operational teams the real-time, actionable insights they need to make timely and effective decisions. By embedding these data-driven practices into everyday management of patient flow, healthcare systems will be able to get the most out of precious resources and manage transitions of care more effectively across the patient journey, from hospital admission to discharge and back into the home – ensuring that the patient gets the right care in the right place at the right time.

Even as the pandemic resolves, the market will continue to emphasize point-of-care testing as close to the patient as possible. This will include not just innovation around IVD diagnostics but also around traditional diagnostic tools. Point-of-care diagnostics will continue to innovate and expand, in part because the pandemic put massive pressure on IVD companies to develop rapid/point-of-care testing. Additionally, the full potential of telehealth is restricted by the limitations of virtual diagnostic capabilities. Consider visual assessments of eyes, ears, and throats, listening for fluid in the lungs, assessing temperature, skin pallor, or diaphoresis, closely examining a rash – these are a few examples of diagnostics that remain limited in a virtual environment. 2022 will see further development and expansion of clinically reliable, home-based tools that may ultimately become as ubiquitous as the thermometer.

Despite increasing acceptance of digital therapeutic (DTx) and digital care tools, they will continue to struggle for reimbursement in 2022. The overall body of clinical evidence on app effectiveness has grown with almost 1500 studies published in the past five years. Further, at least 25 DTx products have been granted market authorization through regulatory processes, and another 23 are commercially available. Yet only a select few have secured coverage and they tend to include an associated device component, like Propellor Health for asthma and COPD, and Livongo for diabetes. A few others, mostly addressing higher-cost disease categories like diabetes, obesity, and COPD, have secured employer benefit inclusion or qualify for FSA expense. But payer reluctance is likely to continue in part because digital tools are novel and provide care in ways that do not necessarily mesh with existing reimbursement structures. In addition, it is inherently challenging to prove a cost-benefit to a payer if your product is additive (e.g., does not replace an existing product/service). Finally, digital tools have not yet proven themselves, as a concept, to consistently deliver on cost and/or outcomes. All this combines to create obstacles for coverage and necessitates long pathways to pursue coverage and generate strong supporting evidence.

2022 could bring the first serious competition to the twenty-year dominance of Intuitive’s surgical robot, da Vinci. In the last ten years, successful commercialization of surgical robots has been limited to areas where da Vinci is not dominant (e.g., orthopedics). However, in 2022, several surgical robots will compete in da Vinci’s core markets and are claiming advantages in cost, size, and haptic feedback. These products are taking approvals and experience from non-US markets and are now aiming at the US. The most notable might be Medtronic’s long-awaited soft-tissue robot HUGO, which garnered FDA investigational devices exemption in late 2021, to add to its CE mark and Health Canada license. CMR Surgical’s Versius raised another USD 600 million in 2021 and in November, Brazil became the 11th country to introduce it. In the US, the Versius system is currently under FDA review, but the company already has commercial teams ready to go. Asensus Surgical’s Senhance garnered a collection of FDA approvals in 2021 and J&J plans to start clinical trials of its Ottava robot in 2022. To add to Intuitive’s competitive pressures, ION, its new bronchoscopy robot faces significant competition in J&J’s Monarch. Finally, Intuitive has been facing a steady expiration of 20-year patents on Da Vinci since 2016, which will accelerate in 2022.

Devices and diagnostic companies can expect renewed federal scrutiny on cybersecurity and increasing pressure on data security capabilities. The MedTech industry continues to see an evolution in the collection, amalgamation, and analysis of healthcare/patient data to drive value and innovation. As software itself becomes a more common medium for medical devices (SaMD), and as AI/machine learning in medical devices expands, expect the FDA to press hard on how to best regulate this technology. The recent creation of the FDA Digital Health Center for Excellence is yielding results as policies are adapted to track closer to industry innovations, including the Digital Health Software Precertification Program. However, health data is sensitive, and privacy and security must be protected. Given that many MedTech manufacturers now collect, store, and analyze patient data as a service to their patients and clinicians, they are on the hook for ensuring its safety and security.

Expect to see increasing acceptance and utilization of Real World Evidence (RWE) in 2022. A plethora of new guidance/legislations around the globe demonstrates the commitment of regulators to use high-quality relevant and reliable RWE for regulatory decision making, including additional requirements for post-market surveillance like post-market clinical follow-up studies on safety and performance. In addition, manufacturers will also start to look at how RWE can be used to inform strategies to enhance study design, study planning, and patient enrolment that will allow them to effectively conduct their safety studies to meet the needs of regulators. Finally, regulators are opening to more innovative study designs using RWE with a focus on applying a targeted approach to answer the relevant research questions.

Despite all the fanfare of 2021 around telehealth, it appears that telehealth overall will remain under 10 percent of office visits in 2022, with primary use cases in mental health, rural patients without close access to a doctor, and those too infirm to travel. The shifts in telehealth regulation and reimbursement, put in place during the pandemic to make access easier, are expected to be made permanent in 2022. However, telehealth as a percent of all office claims dropped to ~8 percent by the end of 2021. While this represents a significant increase from the ~1-percent it claimed before the pandemic, it is quite a drop from the ~30 percent of visits conducted via telehealth during the height of the pandemic in 2020. Further, the number-one telehealth claim continues to be for mental health, just as it was before the pandemic. This indicates an ongoing preference among patients and clinicians for in-person visits, where diagnostic tools and tests, in addition to a clinician’s ability to see, touch, hear and feel, can be utilized.

In 2022 and beyond, MedTech manufacturing will need to look more aggressively into reducing its contribution to waste, and consider incorporating biodegradable materials, reducing packaging waste, and perhaps even innovating around sterilization technology to enable reusability. The MedTech industry is awash in disposable plastic packaging and products. While these products bring several important benefits like sterility, lower costs, and engineering advantages, they also contribute, some say significantly, to the overall waste stream. Historically, the focus of waste discussions has been on the hospital and the disposal of medical waste, given its potential to spread disease. But conversations are slowly turning to focus on the plastic waste hospitals are producing every day (e.g., hundreds of millions of IV bags and tons of plastic products and packaging). The MedTech industry has made strides toward improving the recyclability of its products, but given that recyclables often end up as trash, this may not be enough.

2040 – Vision for the future of health
By 2040, healthcare as we know it today will no longer exist. There will be a fundamental shift from healthcare to health. And while disease will never be completely eliminated, through science, data, and technology, experts will be able to identify it earlier, intervene proactively, and better understand its progression to help consumers more effectively and actively sustain their well-being. The future will be focused on wellness, and managed by companies that assume new roles to drive value in the transformed health ecosystem.

Driven by greater data connectivity; interoperable and open, secure platforms; and increasing consumer engagement; 10 archetypes are likely to emerge and will replace and redefine today’s traditional life sciences and healthcare roles to power the future of health. The 10 archetypes will fall into three distinct, but interconnected, categories.

Data and platforms. These archetypes will be the foundational infrastructure that form the backbone of tomorrow’s health ecosystem. They will generate the insights for decision making. Everything else will build off the data and platforms that underpin consumer-driven health.

Data-gathering organizations will have an economic model, built around aggregating and storing individual, population, institutional, and environmental data. They will also promote interoperability and help ensure privacy/security. Data will be used to drive the future of health.

Some organizations will likely have an economic model driven by their ability to derive insights and define the algorithms that power the future of health. These organizations will conduct research, develop analytical tools, and generate data insights that go far beyond human capabilities in care delivery.

This new world of health will need infrastructure and platforms that can serve highly empowered and engaged individuals in real time. Someone will need to lay the pipes. Data and platform infrastructure builders will develop and manage site-less health infrastructure to link consumers and health stakeholders and set standards for platform components.

Well-being and care delivery. These archetypes will be the most health-focused of the three groupings, made up of care facilities and health communities – both virtual and physical, and will provide consumer-centric delivery of products, care, wellness, and well-being.

Health product developers will power the consumer health ecosystem by developing and manufacturing wellness and care products – from applications to drugs and devices. The economic models of these organizations are driven by their ability to enable well-being and care delivery. While there will continue to be organizations that develop products, those products would not be limited to pharmaceuticals and medical devices. They will also include software, applications, and wellness products.

Along with companies that develop health products, other organizations will provide the structure that supports virtual communities. Consumer-centric health players will provide virtual, personalized wellness, and care to consumers; leverage community to encourage behavior change; and drive consumer and caregiver education.

Two decades from now, we will still have disease, which means we will still need specialty care providers and highly specialized facilities where those patients can receive care. Specialty care operators will provide essential specialty care and interventions when in-home wellness and care efforts are insufficient.

While there will be some specialty care, most healthcare will likely be delivered in localized health hubs. Localized health hubs will serve as centers for education, prevention, and treatment in a retail setting. Additionally, local hubs will connect consumers to virtual, home, and auxiliary wellness providers.

Care enablement. These archetypes will be connectors, financers, and regulators that help make the industry’s engine run.

Connectors and intermediaries are the logistics providers that will run the just-in-time supply chain, facilitate devices and medication procurement operations, and get the product to the consumer.

Unlike the health insurers of today, individualized financier organizations will create the financial products that individuals will use to navigate their care. These organizations will offer tailored modular and catastrophic care coverage packages. They will drive reductions in care costs by leveraging advanced risk models, consumer incentives, and market power.

While the industry will still have regulators, market probably would not view them as governmental traffic cops. They will set the standards for how business is transacted. The regulators of the future will influence policy to catalyze the future of health and drive innovation while promoting consumer and public safety.

All three components need to be fully functioning and integrated for the future of health to come to life.

Whether it is just one or several of these archetypes, life sciences and healthcare organizations need to make choices now to decide which role(s) they want to play in the future. Critical to this decision is understanding how multiple archetypes could fit together into a cohesive strategy and new business models required for success in the future.

Copyright © 2024 Medical Buyer

error: Content is protected !!