Medical device industry: the changing business and talent landscape by Rodrigo Ara첫jo, Richard Arons, Jerome Bucher, Ulrika Hagle, Ling Li, and Robert Ruh
September 2011 Expansion in emerging markets in Asia and South America is critical to medical device manufacturers looking for top line growth. But finding the requisite talent and leadership is rife with difficulties, including hyper-local needs, state-run competitors, and high turnover.
Across the developed world, makers of medical devices face a perfect storm of increased regulatory scrutiny, more stringent reimbursement requirements, and aggressive new procurement practices. In search of new top line growth, manufacturers are all looking to a land some call OUS, for Outside the United States, and others call BRIC, for Brazil, Russia, India and China. But seeking salvation in emerging markets brings its own challenges, not least in talent acquisition, management, and retention. How did we get here? Not so long ago, medical devices were seen as the less risky alternative to biotech in the race to apply innovative technology to health care. Devices typically had lower regulatory hurdles, shorter time to market, and fewer outright failures than biopharmaceuticals. In addition, acquisition by big players often provided a quick exit strategy for founders and early-stage investors. But that has changed. Technological innovation is still prized, but it only gets a player a seat at the table. A series of high-profile recalls and other self-inflicted wounds have prompted politicians to view medical devices with a sharper eye and, in turn, prod the Food and Drug Administration to raise the bar on clinical trial outcomes. Health care reform in the United States and diminished government revenues across the European market have netted tougher reimbursement protocols. At the same time, providers have become savvier buyers, shifting major purchase decisions from surgeons to supply chain specialists schooled in the tough procurement protocols of heavy industry.