While the medtech sector seems to be stabilising, increasing competitive market dynamics and price pressure are putting a strain on companies in the sector, a new study finds
The Medtech Barometer 2016, conducted by the global strategy and marketing consultancy Simon-Kucher & Partners, asked European, top-level decision makers from leading medical technology companies in all key sub-sectors about their business outlook for 2016, their major commercial challenges, and current industry trends.
This year’s survey focuses on appropriate channel management.
"Overall the market has stabilised, that’s the good news", says Joerg Kruetten, executive vice president and head of Simon-Kucher’s global life sciences practice.
"But medtech companies definitely need to handle their direct and indirect channel management more effectively if they want to avoid price erosion and ensure they can get the right products to the right customer and patient groups."
The vast majority of respondents reportedly expect the overall market situation to be better than or at least remain the same as in 2015. More than half of respondents are also somewhat optimistic that market prices will remain overall stable in Europe – a clear improvement to the previous year, when they expected prices to drop.
However, the industry representatives also acknowledge that the fewer players in the sector now fight more aggressively for their market shares. On top of this, there is still a certain quantity of new entrants that regularly shake up the market. The result: increased price and commercial aggression.
Some respondents point out that certain market players do not to compete on quality or performance. Instead they strongly decrease their prices. Furthermore, companies seem to be directly attacking competitor accounts in order to gain market share.
Some of the companies are even trying to offset the foregone profits with hidden fees and costs to the customer. In the long term, however, these trends can lead to price wars – if no appropriate counter measures are taken.