“Global Medtech industry needs to better differentiate products or face commoditization.” That is the conclusion of MedDevice Online in reference to Ernst & Young’s 2014 report on the industry.
The ramifications are significant for medical device design. Indeed, in a commoditized market, design is one of the few things that can be used to differentiate a product and keep it from having to compete on price.
The driver of this apparent change in the market is the system-wide pressure for lowering health care costs. The E&Y report indicates that physicians are becoming less influential in device purchasing decisions, while hospital administrators and managers are becoming more influential. Per Glen Giovanetti, E&Y’s Global Life Science Leader, “To achieve meaningful differentiation for their offerings, firms will need to design and market their products in ways that demonstrably improve patient outcomes while also lowering costs.”
According to the report, price is the top factor in medical technology purchasing decisions. However, the real movement in the future is going to focus on outcomes and value. Devices that deliver better patient outcomes will be able to gain significant competitive advantage.