Health Economics

Health Economics

Responding to change: an interview with Boston Scientific’s Pierre Chauvineau


Boston Scientific, startups and keeping up with the speed of change – an interview with Pierre Chauvineau.

We speak to Pierre Chauvineau, President of this year’s HealthTech Innovation Summit in Lausanne, and VP Executive Advisor at Boston Scientific in Europe, to hear his perspectives on priorities for medtech companies today. 

Boston Scientific

MTE: Tell us a bit about your role at Boston Scientific?

PC: In 2012 I was running the commercial operations for Cameron Health, a medtech startup that developed cardiac devices most known for the S-ICD, a subcutaneous defibrillator. We were quite well developed at that stage and we learnt that Boston Scientific were interested in acquiring us. They’d previously invested in us and had already agreed the terms to possibly acquire us, pending FDA approval. We were surprised.  Since they first invested in 2004, they’d never seemed that interested, although with Mike Mahoney at the helm, then newly appointed as CEO, we thought there might be a small chance they’d buy us, but not likely. We were actually getting ready to go on a roadshow, to present to all the big players, when Boston confirmed they’d buy Cameron.

I was sceptical at first but I soon met the Boston Scientific people and they really impressed me. particularly Mike Mahoney, as well as Joe Fitzgerald (President Rhythm Management Business Unit) and Michael Onuscheck (President Europe). Boston had been struggling recently but I believed they could turn it around. A few months after the deal Michael told me they wanted to put the S-ICD within an existing business unit, and that they wanted me to run the Heart Rhythm Division.

At first I said ‘no’. I had 20 years of Medtronic experience, I knew the corporate world, and I preferred to be back at a startup. But as we kept talking, Michael convinced me about the quality of the Heart Rhythm Division team, and so we decided to embark on this change management journey together.

I’ve run the division for five years now and it’s completely turned around, along with the rest of Boston. Over the last 12 quarters we’ve been winning against the market. But the problem is it’s all-consuming doing this kind of role within a large organisation – I travelled constantly, but wanted to spend more time with my family. So a few months ago I decided that it was too much, and so I talked to Boston, and since April, I’ve been working one week a month for them. I coach several of their high potential staff and do some advising on M&A.

What are you doing with the rest of your time outside of the Boston Scientific work?

Spending as much time as possible with my children and my family, to start with!  Aside from that, I’m involved in a variety of projects, including advising an associate and a startup CEO in animal health diagnostics. I also run workshops with IESE Business School in Barcelona. I’m also in the process of integrating the board of a charity organisation.

What, for you, are the biggest challenges and changes happening in the medical device landscape at the moment?

In my opinion, the drivers of change remain the same within the industry, but the key difference is they’re now rolling out faster in the market. That’s the first change.

Secondly there’s a big trend in purchasing – GPO’s (Group Purchasing Organisations) have made a successful business model in consolidating purchases. Think about Helios, Germany’s largest GPO, which has just acquired Quiron Salud, the Spain’s largest private hospital operator. Look at the NHS who are trying to streamline procurement at a national level. They’ve tried to do it before and it failed because it’s very complex. This time they’re going hard at the situation, and it’s completely disrupted both the market and large companies. Medtronic have reported that their sales three quarters ago had been significantly impacted by changes in the NHS procurement. It’s the same for all the big companies. One initiative like that can be incredibly disruptive.

Thirdly, the new medtech code is coming into play in 2018: an industry initiative where everything should become more transparent – but it’s also very disruptive, both for industry and healthcare suppliers, because it requires so many internal processes to be changed.

Lastly, there’s the changing clinical regulatory environment – bringing us closer to the FDA system – which means from 2020 our regulations for EU approval are likely to take much longer. Whilst at the same time you see the FDA trying to be much more nimble. This could be very damaging for Europe– why would you launch in Europe’s highly complex environment, with its different country regulations and languages, when you have access in a similar timeframe to 350 million people in the US?

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How is Boston Scientific responding to this increased speed?

It’s responding. Traditionally companies like ours have always been technology companies. However, if you’re just a technology company you won’t survive in the new world, unless you’re a startup. The new world asks for solutions and that’s exactly what Boston Scientific is working on.

We want to be category leader in each of our technologies – but you can’t survive by just being a technology leader, so at Boston Scientific we have developed a solution piece called Advantics. Advantics creates solutions that sit over and above our product lines. We still want to sell technology products, but we want to do it in a way that meets the needs of the CEOs of the hospitals, of the health care systems, of the insurers. So overall it’s a much broader way to address the challenges they’re facing. We are hiring people that can add more value than the set of values that you find in pure product teams.

Another big challenge is the pressure on healthcare systems to reduce costs (An aging population, plus the current cost of healthcare means that many Western countries cannot afford healthcare anymore). Political systems everywhere are trying to reduce the cost burden – but historically healthcare systems reimburse based on activities – so the more you do, the more money you make. The future will be about measuring outcomes, otherwise known as value-based healthcare – how do you measure the quality of what you’re doing rather than the quantity. It’s already happening, which is really great to see. The best examples are in Scandinavia and the Netherlands. If it’s successful, this will change completely the way we practise medicine in the western world. Because at this point we will have to measure the quality of care, rather than quantity.  An aging population combined with the current cost of healthcare means that many developed countries cannot afford healthcare anymore.

How would you advise startups to address such challenges and the need for solutions over simple products?

Boston Scientific

Pierre Chauvineau

First off, startups are vital to the medtech industry, because large companies struggle when it comes to innovation. Just look at Boston Scientific. What has turned the company around is acquiring the right technology – Cameron Health, Watchman, Rhythmia and Lotus, and that’s only in the cardiac sector. There are a lot of technologies that we have acquired that we could not have developed within Boston Scientific in time. There are also a lot of early stage companies where Boston will invest, just to be able to have a view into the technology.

My advice to startups is to focus on what you’re really good at and not spread yourself too thin. Become really good at something, say a technology or a solution. However, as I said before, technology companies cannot just go on being technology companies forever. It’s getting more and more difficult to find revolutionary technology, especially in highly-developed fields like cardiology. If you go into neurology though, there’s still a lot of ways of developing disruptive technology. We have huge potential to grow in this segment and to develop new technologies that can really help patients.

In digital health – many IT specialists came into the industry and thinking they were just going to “solve” the healthcare problem. Clearly, it’s much more complex than this – at some point every sector will need more than just technology.  So I’d encourage digital health teams to focus on partnering – and to really understand what the needs are for all stakeholders – from large companies who might acquire them through to patients, physicians and beyond.

When I started with Medtronic in 1991, the company’s revenue was around $1 billion, today it’s $29 billion. When you look at the market now, and companies like Medtronic, Abbott, and Boston, you can see how massive it’s become on the back of technology, so we can’t say that technology hasn’t worked. However, if companies still want to succeed they need to reinvent themselves and connect with the solution piece over and above the product.

About the author

MedTech Engine’s Digital Content Editor, Chris previously wrote for several national newspapers, as well as some of the world’s largest brands. He also has a Master’s Degree in Philosophy and Political Science from Trinity College Dublin.

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