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GfK HealthCare | April 2011 | |
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How the Reality of Medical Device Testing Has Changed Over the Years  By Dominic Meyer, Director International Projects and Bob Rava, Senior Vice PresidentAs global medical device markets have evolved over the past 25 years, so has the need to recognize shifts in the who, what and where of our marketing research value. In this article about the evolving medical device and diagnostics markets, we will explore the changing influence of the stakeholders in the United States and Europe, as well as the value chain of medical devices. From the 80s to today Back in the “old days” of the 1980s, Ronald Reagan was president of the United States, and fashion included shoulder pads, leggings, MC Hammer pants and hair scrunchies. “Cops,” a true-life TV show about the miscreants who broke the law and the cops who arrested them, riveted audiences. Television was on the brink of reality TV. Viewers demanded more and they got it by the early 90s, when television was changed forever by MTV’s “The Real World.” The reality for surgeons in hospitals 25 years ago was no different. In the 80s, doctors received what doctors wanted. Marketing and market research companies simply had to ask physicians, “Do you like the product?” “Will you use the product?” and “Can we price it at 20 percent more than your current product?” There were no committees to approve or refuse, no hoops to jump through, no gatekeepers. Surgeons demanded more and they got it, without regard for cost or profit to the hospital. Today’s reality is quite different. The medical device and diagnostics industry has been undergoing continuous changes over the past 25 years with shifts in stakeholder influence, hospital internal approval and adoption processes, technological improvements, requirements for significant clinical and/or economic value propositions, and reimbursement implications. New information technology has brought us many ways to gather and analyze data, and we have evolved significantly from simply asking surgeons what they want in a market that has more data, more knowledge and more influencers. The process of bringing new products to market has progressed from the old days, when device manufacturers promoted almost exclusively to surgeons and the surgeons integrated the new device without any involvement from purchasing managers, to a new, tightly defined process involving a value analysis committee of various disciplines and stakeholders in the hospital setting.  With this evolution, product manufacturers now must consider many more factors as they create a forecast model for their new technologies. With added pressure to provide proof of ease of use (human factors), the need for value-added devices (with no added costs) and a shift in stakeholder influence, a critical need exists for focused and diligent marketing research. In addition, each manufacturer needs to develop internal capabilities in order to understand what information is needed for believable and reliable value propositions that resonate with each of the stakeholders on the value analysis committee. The marketing research needs have therefore shifted from simply gathering surgeon interest, to the understanding, collating and consulting on the entire value proposition of a product’s clinical and economic advantage. These are very exciting times for marketing research as numerous stakeholders need to be interviewed, with their input juxtaposed and analyzed to create a more holistic and comprehensive view of the opportunities. Evaluating a new or improved medical device The factors to consider when evaluating a medical device and its success in a market seem to be increasing annually. In the following chart, note the clinical inputs, the economic needs, the outside influences, business factors and constant requirement of proof of value.  Surgeons and other health care professionals It will always be necessary to solicit input from surgeons into the clinical value proposition of new devices. All users of the products and those who touch the products/devices (i.e., nurses, surgical assistants and technicians) are critical to confirm or explore device needs, improvements and value. The research needs for the users of the products vary in scope and include dimensions such as packaging improvements, human factors engineering, incremental product improvements, ease of use, understanding of how to use and willingness to champion a new product, just to name a few. When analyzing the new device, market researchers need to consider if the clinician is willing to submit an internal request for a review of the product, and to coordinate on clinical evaluation points if a new product is brought in for trial. In addition, the added layer of surgical specialty will always need to be considered. With cardiovascular and orthopedics at the head of the pecking order because of revenue generation to the hospital, the research conducted will need to be particularly cognizant of other specialties’ data when considering the impact on adoption modeling. Role of purchasing directors/supply chain managers The purchasing/supply chain executives have the knowledge of current contracting and what products can and cannot be brought into a site of care, depending on factors such as buying group contract (to include contract length and rebate tiers within contract), inventory implications, physician preference, other hospital stakeholders (i.e., infection control), company image and sales representative knowledge, etc. Role of finance/administration Health care reform, the continuing need to cut costs and reduced reimbursement trends have all contributed to hospital finance taking on a larger role when working with purchasing/supply chain to determine the economic value of new products (reimbursement/total cost of procedure, etc.). Finance also needs to be as knowledgeable as the manufacturers with regard to its hospital’s number of procedures conducted annually by surgeons, cost of procedures by surgeon and with that, the profit. These data are becoming more and more critical to understand the economic impact of a new product within the purview of the entire value proposition. Implications to medical device marketing research So, what are the implications to the current status of medical device marketing? There is now and will continue to be a need to move away from the traditional market researcher toward a strategic business consultant who can leverage the scale and scope of tools available to gather requisite data and turn that data into valuable knowledge and insights. This new consultant needs to understand the implications of the device (especially FDA in the United States) approval process, the data needed (both clinical and economic) for a product to have a successful launch, the constantly evolving needs of the value analysis committee, and the coding, reimbursement and payment process.  With all the increased data needs and influencers in the medical device market, manufacturers still need to be able to make quick, diligent and intelligent decisions on the long-term value of new products on a consistent basis in order to remain competitive. This has become the real world of medical device market assessments. Partnering with a research and consulting agency that understands the intricacies of the market will help medical device manufacturers maximize their potential for success in this highly demanding market. |
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