Owning the Disease: A New Business Model For Medical Technology Companies

Article preview from IN VIVO - December, 2011

The convergence of expanded access, lower reimbursement rates, higher velocity of innovation, diminished pools of venture capital, the advent of personalized care and a growing demand for improved patient outcomes has created ripples that already are altering the economics and operating dynamics of health care. To survive the coming storm, biomedical companies must build new models of innovation that are anchored in consumer-centric disease solutions rather than the traditional R&D department approaches.

Owning the Disease: A New Business Model For Medical Technology Companies

Article preview from IN VIVO - December, 2011

The convergence of expanded access, lower reimbursement rates, higher velocity of innovation, diminished pools of venture capital, the advent of personalized care and a growing demand for improved patient outcomes has created ripples that already are altering the economics and operating dynamics of health care. These undulations are the precursor to a hurricane that will batter unprepared companies and fundamentally change how health care is delivered and evaluated. To survive the coming storm, biomedical companies must build new models of innovation that are anchored in consumer-centric disease solutions rather than in the traditional R&D department approaches.

As discussed in a previous article, these factors already have altered the longtime drivers of medical technology innovation. However, what has been less widely observed is that this same confluence of factors is also forcing a broader transformation of the fundamental business models under which many medical technology companies operate.

Most notably, some of the most enterprising medical technology companies are preparing to weather the storm and thrive in the sunshine that follows. These early movers are attempting to secure their organizational and innovation efforts around the concept of “owning the disease” with products, services and solutions across the entire continuum of care. While the number of such companies attempting to own the disease is small and none has fully succeeded to date, their influence is growing. As their efforts advance, they serve as a harbinger of a potentially new business model for the industry.

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