Other than pharmaceutical and technology companies, no other industry invests a greater percentage of revenue into R&D than medical device (holding steady at an average of 6.7%). The returns on these investments in innovation are, however, under stress. According to a Deloitte study published in 2016, pharmaceutical company returns on R&D have fallen from 10.1% in 2010 to 3.7% in 2016. Similar concerns are arising in med device, and companies are exploring new methodologies to not only improve efficiencies, but to improve efficacy at launch as well.
One approach designed to improve and accelerate development and innovation seeks to pull strategic thinking and methodologies earlier into the design and development process. The use of analytical methodologies, such as Health Technology Assessments, is an example.
The term Health Technology Assessment (HTA) first appeared in the literature in the mid 1990s. At the time, HTAs were an early form of healthcare economics analysis being used to determine the financial viability of targeted, pharmacological therapies. It would be another ten years before the concept made its way into the medical device arena. Even today, the application of disciplined, multi-faceted, strategic assessments, early in the device development process, is relatively rare in med device.
Health Technology Assessments are still a rather eclectic assemblage of various forecasting and risk assessment techniques. No standard HTA actually exists. Yet the original objectives remain the same; the use of analytical methodologies, at the outset of development, to improve outcomes in the form of greater efficiencies, enhanced efficacy at launch (both clinical and economic), and improvements in patient and clinician experiences with the technology.
Here at REV1 Engineering, our proprietary approach triangulates technology intelligence, market intelligence and business intelligence to guide early decision-making in the design and development process. This approach is designed to capture the strategic elements of the entire ecosystem.
Technology Intelligence includes assessing capabilities, constraints, technological risk, opportunities for innovation, integration opportunities, disruptive developments and manufacturability.
Market Intelligence includes assessing standards of care, healthcare economics, government policy, delivery system objectives and trends, patient flow, the consumption of constrained, skilled nursing bandwidth, and the competitive landscape.
Business Intelligence includes assessing global regulatory pathways, dynamics of reimbursement – current and future, distribution and channel alignment, financial risk, return on investment (accelerated time to market), sustainable strategic advantage and forecasted profitability.
The integration of this strategic approach greatly improves and accelerates medical device companies’ ability to deliver the right product, to the right market, at the right time and with the right pricing and clinical value proposition.
Over the past ten years, REV1 has developed 137 devices for 67 medical device companies, contributing more than $1 billion in client company valuation growth. To learn more about how REV1 Engineering can contribute to your strategic success, please contact Terry Murray at terry@rev1engineering.com or call (951) 696-3933.