The latest Medical Technology Innovation Scorecard Report from PwC reveals that the future of medical technology focuses on less—lower costs, smaller medical devices, less complicated products and services—all resulting in more ROI. The report predicts that emerging countries may be more poised to deliver on such a philosophy than the traditional Big Guns such as the US and UK.
Last month, PwC released its “Medical Technology Innovation Scorecard” report, which PwC says “explores the changing nature of healthcare innovation.” The report takes a look at nine countries with strong medical technology market potential, giving each a score of 1 through 9, which represents each country’s current and future ability and potential to keep up in the med tech market, relative to the changes in the industry and relative to one another.
Those nine countries—Brazil, China, France, Germany, India, Israel, Japan, the UK, and the US—are being “scored” on five pillars that PwC says “have supported US medical technology innovation for the past several decades”: powerful financial incentives, leading resources for innovation, supportive regulatory system, demanding and price-insensitive patients, and supportive investment community. The scorecard reflects not only the position of each of these countries now, but aims to predict which of them will be leading innovation in the future, through 2020.
Perhaps the most shocking claim the report makes is that, while the US tops the charts in terms of capacity for innovation now—with a score of 7.1—the score gap between the US and other countries will likely shrink in the next decade. Part of the reason, according to PwC, may be that “the way we assess value in medical technology is changing radically.” Increasingly, the best ROI comes from med tech products that can do more with less—more function, less money. PwC likens this phenomenon to the consumer electronics industry, where “faster, better, smaller, cheaper,” is the mantra. Government, private insurers, and self-pay consumers “refuse to pay for incremental innovations that add bells and whistles but do not significantly improve health or reduce cost,” according to the report.
Emerging countries such as China, India, and Brazil are in a better position to take the lead and supply the innovation that fits this type of demand, says PwC. In fact, the innovation scorecard marks for each of these three countries has gone up in the past five years, while every other country’s marks have gone down, with the exception of France, which has remained steady at 5.0 from 2005 to 2010. Noting how these countries skipped the use of telephone landlines almost completely and jumped right into mobile technology in a relatively short period of time, the report predicts that creating simpler, more mobile medical devices will “enable these nations to leapfrog developed countries in innovative healthcare delivery.”
The report goes on to make the following related key points:
- The medical technology innovation ecosystem, long centered in the United States, is moving offshore. Innovators are going outside the United States to seek clinical data, new-product registration, and first revenue.
- US consumers aren’t always the first to benefit from medical technology and could eventually be last. Innovators already are going first to market in Europe and, by 2020, likely will move into emerging countries next.
- The nature of innovation is changing as developing nations become the leading markets for smaller, faster, more affordable devices that enable delivery of care anywhere at lower cost.
“It seems somewhat inevitable that as China, India, Brazil, and other countries become wealthier and have the ability to pay for more sophisticated forms of healthcare, that on a comparative basis, the United States will not have as significant a lead in innovation as they have had in the past,” says Chris Wasden, managing director of PwC and author of the Medical Technology Innovation Scorecard report in a Webcast statement. “The gap between the US and the other countries is shrinking, not so much because of the deterioration of the United States, but because of the advancement of these other countries.”