As performance slows, a new report explores how companies in the medtech industry can create value for patients and stakeholders over the next decade.
After a decade of strong performance up to 2019, the Medtech industry is now facing what has been described as ‘unprecedented disruption’, in a new report.
The current economic climate has seen companies forced to confront challenges such as high inflation, uncertain supply and constrained capital markets as investment has declined and performance slowed.
The Medtech Pulse report, published by McKinsey, explores these challenges and how companies in the sector can create value, for both patients and shareholders, over the next decade.
The medtech industry has saved lives and improved quality of life for millions of patients around the world, with a long history of patient-centered innovation and more than $42 billion invested in R&D in 2022 alone.
But according to the authors, leaders in the space are ‘refreshing their strategies’ and the industry as a whole will need to ‘reinvent itself across multiple dimensions’ in order to unlock the next wave of innovation and growth.
The report explores a number of specific areas including: software innovation, bringing hardware and software together in digital health ecosystems, building a next-generation medtech commercial model, reimagining operations for the challenges of the next decade, environmental, social, and governance considerations, updating the post-COVID-19 playbook for M&A, and competing in China.
Other insights include the state of AI in 2023, the importance of sustainability for investors and the need to reimagine the approach R&D in order to drive sustainable growth.
The report states: “R&D excellence is foundational for business growth in medtech. Accordingly, the industry invests substantially in innovation relative to other industries. R&D excellence—its effectiveness, efficiency, and ROI—is a top priority for medtech leaders, but it is not achieved through spending alone. Medtech leaders excel at developing and managing an R&D portfolio, which serves as a compelling road map to growth and commercial performance.”
The authors add: “At its core, medtech is an industry in which companies can do well by doing good. With a clear vision, a passion for innovation and excellence, and a steady guiding hand, medtech leaders can chart their next path of value creation for the benefit of patients and stakeholders.”
You can access the full report here.
