During our annual team bout of end-of-year nostalgia we recalled a conversation two years ago about how the lines between the medical device, the pharma and the digital health sectors were becoming softer.
String Connection
This is an interesting time for the medtech and the medical device sectors, and those supplying them. Technologies are converging and we are seeing an increased use of connected technology in many devices; the adhesives market is showing positive growth signs thanks to the growth in sensors and digital health technologies; Industry 4.0 is impacting on the way manufacturing facilities operate, while the competitive landscape means device technology is advancing to create products that help us track and monitor conditions and our day-to-day health. We are also seeing a movement from manufacturing-led products to those driven by the needs of the healthcare sector and patients. The medical device and digital health sectors no longer sit apart and we are also seeing more interaction between these two markets and the pharma sector. Not only are devices becoming more sophisticated to accommodate new drug formulations but there is huge interest in the value of data surrounding adherence and tracking that the merging of these three life science sectors can provide.
An EY report has highlighted some key medtech findings through its Pulse of the Industry 2017 report: “In 2017, the industry demonstrates resilience and agility even as the pace of change accelerates on technological, reimbursement and regulatory fronts and new digitally based operating models shift power to consumers”.
In the document, Klaus Schwab, founder and executive chairman of the World Economic Forum, describes how a “blurring [of] the lines between the physical, digital and biological spheres” is altering “business models, as decision-making power shifts away from manufacturers to other health care stakeholders.”
How these industries work in tandem will be interesting. The report pinpoints key findings of 2017 – the rise in net income for the medtech sector in the US and Europe was up by 17%, and that the year saw the three biggest medtech deals since EY began its reporting, one of which was an $800million round raised by Verily, the life science subsidiary of Alphabet, formerly Google. Given this and the fact that Verily has tied up with Sanofi for the creation of Onduo, a diabetes platform, as well as with Johnson & Johnson for robotics and visualization company Verb Surgical, the trend for collaboration on a large scale is evident.