The medical tech industry has had a huge impact on the health and well-being of people around the world. Thanks to the innovations of medical companies, millions of lives have been saved and the quality of life of millions more has been greatly improved.
Medical companies have a long history of patient-centered innovation. Despite the recession caused by the COVID-19 pandemic, billions of dollars have been invested in research and development in 2022.
Recently, medical technology companies have faced unprecedented challenges. They now operate in a challenging macroeconomic climate characterized by high inflation, constrained capital markets, uncertain supply, and rising geopolitical tensions.
To overcome these challenges and usher in a new wave of innovation and growth, medical technology manufacturers need to update their market access strategies.
Market access in the medtech industry
Pharma market access in the context of the medtech industry is the process of bringing new medical technologies to market and making them available to patients. It involves a wide range of activities including:
- obtaining approval from regulatory authorities such as the US Food and Drug Administration (FDA) or the European Medicines Agency (EMA);
- securing reimbursement from payers such as insurance companies and government health care programs;
- acceptance among health care providers and patients.
Regulators, healthcare providers, and reimbursement systems play a key role in gaining market access. Regulators ensure that medtech products are safe and effective before they are marketed to patients. They also play a role in developing standards for product manufacturing.
Healthcare providers are the ones who will ultimately decide whether to accept and use new medtech products in their practices. Their decision is influenced by a variety of factors, including a product's clinical benefits, cost, and usability.
Reimbursement systems determine which medtech products are reimbursable and how much is paid for them, which has a significant impact on patient access to new technologies.
Market access is critical for medtech companies, as the development and commercialization of new medical technologies is a complex and expensive process. In addition, the medtech industry is highly competitive and new technologies are constantly being developed. As a result, medtech companies need to be proactive in managing their market access strategies to stay ahead of the competition and ensure that their products are available to patients.
Barriers to entry into the medical technology market
The major barriers to entry in the medical technology market are:
Regulatory complexity.
The regulatory framework for medical technology is complex and sophisticated, with requirements varying from country to country and region to region. Medical technology companies must comply with a wide range of regulations governing the design, development, manufacturing, testing, and marketing of their products. The regulatory environment can be especially difficult for new companies looking to enter the market. And it can be difficult to get the resources and expertise needed to comply with all applicable regulations.
Reimbursement challenges.
Payers, such as insurance companies and government health programs, have strict criteria for what products they will reimburse and how much they will pay for them. Healthcare companies must provide payers with a dossier of data to demonstrate the clinical and economic value of their products. This dossier may include clinical trial data, cost-effectiveness analyses, and patient surveys. But even if a healthcare company can demonstrate the value of its product, there is no guarantee that it will be reimbursed. Payers can make decisions based on factors such as their budget, population needs, and the availability of competing products.
Competitive Environment.
The medical technology industry is highly competitive, with a large number of companies vying for market share. Established medical technology companies typically have a number of advantages over new companies, including:
- brand recognition;
- market share;
- sales and marketing infrastructure.
To succeed, new medical technology companies must be able to differentiate their products from established competitors.
Clinical validation.
Clinical data and trials are essential for medical technologies. Payers generally do not reimburse for products whose safety and efficacy have not been proven in clinical trials.
Clinical trials can be costly and time-consuming, especially for new and complex technologies. And even if a healthcare company is able to conduct successful clinical trials, there is no guarantee that its product will be successful in the marketplace - patients and healthcare providers may be reluctant to adopt new technologies.
Strategies for achieving market access
An effective regulatory strategy is essential for medical technology companies that want to bring their products to market in a timely and efficient manner.
What will help in developing an effective regulatory strategy:
Understanding the regulatory environment
The first step is to understand the regulatory requirements for your product in your target markets. This includes understanding the pre-sale approval process, quality control requirements, and post-sale surveillance requirements.
Developing a value proposition
The value proposition should clearly articulate the benefits of the product to patients, healthcare providers, and payers.
When developing the value proposition, medical technology companies should consider the following:
- clinical benefits;
- economic benefits;
- patient-centered benefits.
Reimbursement planning
Developing a robust reimbursement strategy helps ensure that a healthcare provider is adequately compensated for the use of their product, which in turn drives adoption and successful market positioning. Here are a few key aspects of developing effective reimbursement strategies:
- understanding the healthcare ecosystem in the target market;
- clinical and economic evidence of the product's value;
- payer engagement;
- health technology assessment, which includes evaluating the clinical and economic value of a new medical technology;
- development of a pricing strategy that takes into account the cost-effectiveness of the product, competition in the market, and the willingness of payers to reimburse at a set price.
Market segmentation and targeting
It is important to identify and target the right market segments for your medical product. This will help you focus your marketing and sales efforts and increase your chances of success.
Collaboration and partnerships
Forming partnerships with reputable medical organizations can be a beneficial way for medical technology companies to gain access to resources and expertise, as well as accelerate market access.
Potential partners for medical technology companies include:
- hospitals and health systems - that can provide healthcare companies with access to patients and providers, and can help with clinical trials and reimbursement;
- payers - can provide healthcare companies with information about their reimbursement policies and decision-making processes and can help with market access initiatives;
- academic institutions - can provide medical technology companies with access to research and development expertise and can assist with clinical trials.
Consulting firms that specialize in this area can help develop and implement effective strategies for achieving market access.
Success story
An example of successfully overcoming market access barriers is the case of Dexcom, a medical technology company that develops and manufactures continuous glucose monitoring (CGM) systems. Dexcom's CGM system is a wearable device that measures glucose levels in the intercellular fluid and transmits the data to a receiver or smartphone.
CGM systems offer a number of advantages over traditional methods of blood glucose monitoring, including:
- continuous glucose monitoring, which can help patients identify trends and patterns in their glucose levels;
- CGM systems can send real-time alerts to patients when their glucose levels become too high or too low;
- proven effectiveness - CGM systems have been proven to improve patient outcomes, including reducing HbA1c levels and the risk of complications from diabetes.
- despite the benefits of CGM systems, they have faced a number of barriers to market, including:
- regulatory complexity - CGM systems require approval from regulatory agencies such as the FDA;
- reimbursement challenges - CGM systems are a new and expensive technology, and it was unclear whether payers would reimburse them;
- patient education - patients must be trained on how to use CGM systems and how to interpret the data;
- health care provider education - health care providers must be trained on the benefits of CGM systems and how to support patients who use them.
Dexcom overcame these barriers by employing the following strategies:
- Partnering with established companies. Dexcom teamed up with insurance companies and pharmacy benefit managers to negotiate favorable reimbursement rates for its CGM system.
- Investing in patient and provider education. Dexcom provides educational resources to patients and healthcare providers on how to use CGM systems and how to interpret data.
- Clinical Data Generation. Dexcom conducted a series of clinical trials to demonstrate the safety and efficacy of its CGM system. This data was required for regulatory approval and reimbursement.
As a result of these strategies, Dexcom was able to successfully launch its CGM system and make it available to patients. Dexcom's CGM system is now the leading CGM system on the market.
Conclusion.
Market access for healthcare companies is challenging. Companies face a number of barriers including:
- regulatory requirements;
- reimbursement challenges;
- the competitive environment.
Persistence, adaptability and developing a sound market access strategy are key success factors for medical technology companies.
