Medical device companies predict partnerships, rather than in-house efforts, will drive the future of innovation and accelerate speed to market. Ongoing collaboration and innovation through partnerships in a highly competitive and specialized industry requires new business models for joint projects, new ways of making strategic investments, and new approaches to R&D that encompass a broader spectrum of partners and a more expansive mindset.
As medical device companies set their sights on growth through breakthrough innovation, the vast majority believe future innovations will increasingly come through partnerships, rather than in-house efforts (see below). In fact, medical device manufacturers see entering new partnerships to drive innovation as the top growth driver (second only to increasing R&D spend, as discussed earlier), and the majority are already adopting more collaborative business models with suppliers and customers.
Medical device companies say the top three reasons for collaborating on innovation are:
1. speed to market
2. reducing risk
3. lowering cost.
Viewed together, these three reasons suggest established medical device companies may be seeking partnerships with smaller, more agile companies that have more streamlined R&D processes and are thus able to bring new products to market more quickly.
The survey results show that the time horizon for product innovation for medical device manufacturers tends to be longer than other manufacturing companies, with about two-thirds of them targeting 3-5 years, compared to half of the other manufacturers surveyed. Less than 20 percent of medical device companies target a shorter, 1-3 year horizon.
Further, medical device companies name efficiency in R&D/product development as one of their biggest challenges, and a quarter of them also struggle with keeping their business models competitive. Innovation through collaboration can help address these challenges.
Moreover, decreasing costs while increasing innovation through collaboration creates a win for companies when a product merits a higher price in the market based on patient outcomes.
Companies that think less about the cost of the product and more about the cost of the solution will be better positioned in conversations with healthcare systems. Many medical device products come with a suite of services; by focusing on the value of the clinical expertise that is provided alongside a product, companies that focus on people and technology collaborations as part of their transformation are more likely to succeed in the evolving marketplace.
Medical device companies need to review their traditional approaches to innovation and take up new strategies.
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