As digital solutions and decentralized care models race to meet patient demand for greater choice, convenience and control over their health care, and as payment and reimbursement structures trend increasingly value-based, medtech companies must work to center themselves in the patient journey.
Medtech must be defined as a core part of health care services, pharma services, and emerging technology, panelists agreed at the McDermott Will & Emery Europe Health Private Equity Conference in a 19 September session, “What’s Next for Medtech?”
“If you redefine in that light, I think we are in a phenomenally exciting period of time for medical technology,” said Paul Tomasic, managing director at Houlihan Lokey.
He continued, “If you think about the way the reimbursement systems are designed, and where value-added health care is going, it’s ultimately to the delivery of care to patients.“ If a medtech company’s sole function and role is to provide the device, but it does not play a larger part in the patient continuum, it stands to be left behind.
McDermott Will & Emery partner Jamie Ravitz, who moderated the panel, was of a similar mind. “It’s health care delivery, [it’s] not just the product anymore,” he said. “You kind of want to own that patient, and you want to own them from the beginning and be able to continue on with that patient right through their journey,” he said.
Electronic health records, the Internet of Things, and growing connections with consumer devices and wearables have opened such possibilities.
“I don’t think there’s going to be a top-30 pharmaceutical company that doesn’t have a direct-to-consumer model.”
Ryan Sysko
Meanwhile, social media’s pervasive cultural and economic influence can no longer be ignored, and as medtechs’ focus expands from providers to patients, notably under the threat of new consumer-facing players like Apple and Amazon, direct-to-consumer marketing is on the rise. TV spots in recent years include Boston Scientific for its Watchman implant to reduce risk of stroke in non-valvular atrial fibrillation patients and Dexcom for its G6 and G7 continuous glucose monitoring solutions, which ran during NFL Super Bowl games in 2021 and 2023.
Panelists pointed to what’s happening in the pharma space. While mainstream DTC advertising is nothing new for pharmas, Ryan Sysko, CEO of SaaS-enabled solutions provider Amalgam Rx, said that “Historically, pharma has not built relationships with patients. One of the major shifts in the US is towards direct-to-consumer models. It started with LillyDirect, then Pfizer.”
Introduced in January 2024, Eli Lilly and Company’s LillyDirect is an online pharmacy and virtual care service for Lilly medicines that delivers prescriptions to patients' homes. PfizerForAll launched in August by Pfizer, aimed at patients with COVID-19, flu, or migraines seeking treatment or vaccination through a digital portal.
“I don’t think there’s going to be a top-30 pharmaceutical company that doesn’t have a direct-to-consumer model. They’re not just going to build massive call centers or use telemedicine, they’re going to have to use technology to help support patients,” said Sysko.
‘Big Tech Will Change The Industry Forever’
The importance of software to medtech in 2024 cannot be understated, driven in large part by Big Tech’s entrance in health care. “Big Tech will change the industry forever,” said Sysko.
“Ultimately the value proposition has shifted more towards software,” observed Giulia Poletti de Chaurand, a tech investor at Hg Capital, adding that AI is only accelerating the trend.
Ravitz noted that patients today have increased expectations for the quality and usability of technology provided by the medtech industry. “Medtech companies are constantly updating their technology offerings to match user expectations,” she said.
Equipped with a growing number of apps and wearables to provide insight into their health, “Users are expecting data,” she said.
Sysko reflected, “Around 10 to 20 years ago, it was almost okay for medical devices to have sub-optimal usage experience. It’s just not allowed anymore. Consumer expectations have filtered into our business. We understand we can’t put a product on the market unless patients like it, want to use it, and it meets their expectations.”
Traditional medtech industry leaders saw the way the wind was blowing.
“Around 15 years ago,” Tomasic recounted, “I sat on a panel with the head of research and development from a large medtech company, and I asked him what is next for the company. I expected him to talk about stents or some new innovation.” Instead, he said, “the future of medtech is, would they become a healthcare services company?”