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Medtech 3.0: Paradigm Shifts in the MedTech Business Model

MedTech 3.0 – Paradigm Shifts in the MedTech Business Model 

By Tricia Rodewald 

Innovation is alive and well at this year’s AdvaMed conference. While it’s clear that medical device innovation in the U.S. has taken a hit, there’s important advancement happening around the development of new business models.

The next evolution of the medical technology industry—MedTech 3.0—focuses on collaborative, non-traditional partnerships and a changing customer base.

In a panel discussion with top industry leaders from Pharma (J. Alan Butcher, Endo Pharmaceuticals), Medical Device (Darrell Johnson, Medtronic), Healthcare (Arnaud Bernaert, Philips), and Private Equity (Ali Satvat, Apax Partners) it was emphasized that the ways of doing business in the medical technology space are quickly changing.

One example given is that more and more MedTech companies are partnering with Pharma and IT to enhance their service offerings—versus the MedTech 1.0 and 2.0 models of focusing predominantly on products.

There’s also a significant power shift in the sales model. Selling directly to consumers is the new direction of the MedTech industry.

The MedTech 1.0 and 2.0 business models have focused on selling to hospitals, nurses, doctors, and administrators. But technical, medical-type clinician personalities are unlikely to be the best information deliverers in a MedTech 3.0 world.

How this shift (selling directly to payors) will be implemented is uncertain, but as those in Pharma know, it can be done. Non-traditional strategic partnerships and collaborative business models will play a significant role in navigating MedTech through the murky waters of implementing these business model changes effectively and compliantly.

For everyone in MedTech, the 3.0 business model development is definitely about hedging bets and taking a leap of faith. But in order to stay competitive, viable, and valuable, it’s a critical leap to take.