No matter the therapeutic area, device companies agree: Creating cutting-edge products is expensive. From the R&D costs to the pricy FDA fees, the expense for innovation adds up quickly. As products become more technologically advanced, the cost for designing new devices has increased. At the same time, device companies are being hit with fees that are wiping out their R&D budgets, such as the new 2.3% medical device tax, which reportedly requires companies to collectively pay an estimated $194 million per month. How do the companies overcome this expense?
- The Wrong Goals
A recent article posted in MD+DI identified several traps that a device company may fall in that only serve to increase the cost of innovation. Innovation is critical for device companies – but they also don’t want new technology for technologies sake. According to the article, “Innovation has more to do with recognizing ‘what the real need is’ rather than deploying new sets of technologies.” Identifying real needs allows device companies to make smarter decisions about where to direct their R&D funds. Maybe an entirely new device isn’t needed, but rather a change to an existing device will allow it to meet the need of a different patient population.
- Using Traditional Market Research
Many device companies turn to Key Opinion Leaders (KOLs) for insight into new ideas or methods. The issue with relying on KOLs though is that their high level of experience and capability means they don’t run into the same issues as general practitioners. Working with general practitioners and the issues they encounter on a typical basis will lead to increased innovation that meets the needs of the general population.
- Losing Talent to the Consumer Space
Device companies rely on their entrepreneurial staff to lead the drive for new innovation. Keeping the staff in the device industry has proven tricky. To an innovator, the many barriers in the device industry are a turn-off. Why deal with clinical trial and regulatory issues when they can move to an industry with none of that? As noted in the article, “If I am an entrepreneur and I want to do something really creative, I could move over to the consumer space, where there are low hurdles and the changes for success are high.” This trend is likely to continue until the industry recognizes ways to reduce innovation obstacles. As the article questions, “How do we get the broader ecosystem to lower the barriers so it is equally enticing to save a life as it is to make a cool iPhone app?”
Creating new device technology is expensive enough. Identifying errors that companies make when innovating can help reduce the overall R&D cost, while bringing devices to the market that are both cutting-edge and needed for patient care. Are there any mistakes that you think medical device companies make in their creation of new products? Share in the comments below.
Photo Credit: RambergMediaImages