Ernst & Young’s recent report on the impact that data-driven platforms are having on traditional life-sciences companies shows that medtech – in common with other industries ranging from car manufacture to education to taxi services – is not immune to technological disruption. The power of data, combined with changing consumer expectations and ever more outsourcing of medical care from health institutions to self-managing patients, has opened enormous markets for tech innovators looking to deliver next generation medtech.
These potential markets in turn are driving a great deal of research and development. This is reflected in the sheer volume of patent applications, a form of intellectual property (IP) protection, in the medtech category. The most recent annual report from the European Patent Office (EPO) revealed that medtech remains the most popular category for patent filing globally. There were 12,263 medtech patents filed in 2017, a 6.2 per cent increase on the previous year. In Europe this trend was even more pronounced with medtech filings up 7.1 per cent and medtech now the most popular filing category in the UK.
This is good news for patients with a wide range of conditions ranging from diabetes to hypertension. The proliferation of medtech innovation also has a significant role to play in alleviating the burden on healthcare systems and tackling long-standing healthcare challenges such as antimicrobial resistance.
Whether this is good news for the companies that have traditionally dominated this market is another question. Patent filing numbers suggest that major tech companies such as Alphabet, Microsoft and Apple are investing in healthcare innovation, harnessing their in-depth understanding of the power of data, and how to use it, to deliver even more innovative medtech products.
This trend is confounded by the fact that older business models are beginning to struggle to keep up with innovative tech companies and the changing demands of ageing, and tech savvy consumers. The report shows that the number of new drugs achieving 50 per cent of analysts’ peak sales forecast is falling, from 87.5 per cent between 2002 and 2005, to just 53.7 per cent between 2009 – 2011, as reimbursement pressures increase.
The challenges posed by emerging, data-driven technologies and more sophisticated consumer demand are not unique to the medtech sector. It is part of a wider global trend that led The Economist to declare in 2017, that data is the new oil. The ubiquity of data and mobile telecoms means that consumers have unprecedented access to information, which drives demand for bespoke and responsive products. The other side of this equation is the ability of data and tech companies to harness consumer data to deliver products and services they have not previously been associated with, challenging the status quo in sectors including transport, energy and even legal and IP services!
There is a clear trend of tech companies expanding their activities into new business areas in which they can carve out lucrative niches despite their status as newcomer. While scandals such as the recent one involving Facebook means legislators will continue trying to find ways to curb the power tech companies have over people’s data, the trend towards the proliferation of powerful data based enterprises shows no sign of abating. To the contrary, the ubiquity of data and mobile communication, paired with increasing cost pressures in the healthcare field, is set to further encourage efforts to achieve data driven and outcome centric innovation in the field.
The size and expertise of the data companies making in-roads into the medtech sector means that competing with them on their own terms – utilising data to develop responsive apps and devices – would be difficult, especially from a standing start. That said, medtech companies will themselves have data repositories (and likely IP rights to that data), as well as having accumulated and valuable medical and technical knowledge.
The way forward for many then will be collaboration and there are already many successful examples of this. Collaboration is a great way to foster partnership between companies with differing specialisms. Due attention should, however, be given to the ownership of the results of such collaboration so that the collaboration creates new business opportunities as well as fully support the more traditional efforts of medtech innovators.
So, while emerging technologies will continue to disrupt healthcare markets, for those willing to embrace the change, the opportunities are many.
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