The great shuffling of the medtech / healthtech deck will require a new level of agility by the Top 10 medtech players in the industry:
-Centers of care shifting from in-hospital procedures to ambulatory surgical centers. New distribution mechanisms such as telehealth will shift the advantage of the massive sales forces in place and potentially transfer market share by 3 to 5 points by new engagement channels alone. Bundling arrangements will be compromised by the decentralization. I also expect bundling arrangements to make their way to being challenged in courts of law.
– Off balance sheet R&D initiatives being pursued by specially designed partner companies who have specific core competencies in emerging areas of healthtech by larger medtech instead of leaving technologies on the shelf. Resulting in revenue sharing rather than straight up buyouts.
– Private equity firms actively entering the much earlier phase of medtech R&D and rolling up groups of core competencies in regulatory, clinical, reimbursement and product development in the pursuit of product platforms or technologies where the big medtech players lack the internal expertise and PE can get a first move on the emerging high tech / low regulatory lift that they have avoided in the past.
– Partnerships between high tech, non-medtech companies with core competencies in AI, ML, digital technologies that have not been native to medtech but are now digitally scalable and represent quick-to-market opportunities in relative terms of medtech products of the past. The large medtech players who historically have had draconian behaviors, turf defense and classic pathways to market will be at a massive disadvantage and lose market share or be playing catchup which in digital markets if you are not #1, you are not in play. Digital domination This is a different mindset than selling heart valve solutions where there is room for 3 to 4 at the table.
This is a great opportunity for medtech. The concept of legitimacy that has been historically owned by the big players will be challenged by the new tech platforms.
Cutting away dead wood.