The OneMed forum conference was launched in January of 2008, when economy was showing all signs of progressing to new heights, with an objective to showcase innovation in medtech. The conference aimed to bring together the companies and investors, during the large influx of healthcare investors and executives, during the JP Morgan Healthcare Conference, in San Franciso. Fast forward to 2014 and we are perhaps just emerging from one of the worst recessions; a downturn that hit the medtech sector more than any other industry segment.
This year, the location of OneMed Forum was changed and the venue was moved further away from the JP Morgan Conference. Since the weather in SF was gorgeous, it was not a problem; but if the venue continues to be further away in future, and in the event of cold and rainy weather, it can have an impact and lower the attendance at future OneMed events. This year also OneMed event seemed to be sparsely attended, although that appearance might also be enhanced because the meeting rooms were spread out on two different floors and there wasn’t a single spill out location for the participants to meet and network – another problem with the venue.
There was also a palpable difference between the JP Morgan conference and the OneMed Forum, this year, in terms of optimism. While biotech and pharma sector is returning to pre-recession levels with a large number of IPOs and higher numbers of dollars raised, medical technology companies have yet to see significant investment dollars. On talking with the participants, I heard a note of disappointment regarding low attendance from VCs and other investors, just like in the last few years.
However, despite slow pickup and staggering growth in the medtech sector, it is transforming and the companies are learning to operate more efficiently. It is also recognized that healthcare is at a critical point and medical innovation will have to address some key challenges. Various panels and speakers at the OneMed Forum, addressed the changing healthcare landscape and how the future of health and medicine will need to be shaped, in the coming years to address the key issues.
Personalized Medicine Panel discussed the promise offered by customized diagnosis and treatments, in lowering the cost and increasing effectiveness. Panel sessions addressing the JOBS Act and the Affordable Care Act, explored the impact of the legislation on cost of care and access to care. Companies and solutions that may be poised to offer effective healthcare solutions and may also present interesting investment opportunities were highlighted. In somewhat grim medtech landscape, digital health is emerging as the hottest new trend, with much potential. The Digital Health panel discussed the impact of Affordable Care Act in increasing information transparency and empowered consumers taking greater control of their health information. The changing role of the patients/ consumers will require change in the healthcare delivery and transformation in the business model.
A panel addressing “reimbursement strategy after the affordable care act”, discussed impact of medicare payment rules on medtech and hospital markets. The panel also discussed trends in coverage and payment for newly emerging molecular diagnostic tests. One key advice from the panel was that thinking upfront about the reimbursement strategy will be increasingly more important for companies with new, innovative products. A panelist also suggested that during clinical trials, companies can also think about reimbursement and instead of doing only what may be required by the FDA, if they can also collect reimbursement data then they would come out ahead. During innovation, the companies should relentlessly focus on disease management, and that would lead to them to appropriate and effective reimbursement strategy, advised the panel.
Financing and IPO issues were addressed in various panels. One interesting panel on Crowdfunding discussed a handful of portals that are beginning to raise some capital for emerging growth companies. One investor who was attending the panel, later told me, that it is too early to give an opinion on what kind of success this strategy would yield, but he had some grave concerns. AdvaMed CEO’s Unplugged Panel featured some of top leaders of the MedTech industry, who shared their insights on key challenges facing the industry. Stuart Randle, CEO of GI Dynamics advised startups to focus on crucial healthcare issues including obesity. He also advise companies to pursue capital intensive strategy, and at least initially sell products outside the US. Scott Brooks, CEO of Regenesis Biomedical, advised startups to get good legal and regulatory counsel early on. Patrick Daly, CEO of Cohera Medical was optimistic about the future of MedTech. “IPOs are coming back, M&A is picking up, and dollars are rolling in, big companies have record levels of cash, and I feel positive”, he said.
One of the most prolific financiers, Bill Hambrecht gave a keynote address. Hambrecht has over 500 IPO’s to his credit that include seed level funding in nascent industries. Although I did not attend the keynote, I heard some highly positive comments from an attendee. Steven Burrill, who has been at the helm of innovation in healthcare and shares and who regularly shares his insights through his annual reports, gave a second keynote. Again, I missed the address but both keynotes were major highlights of the event. Throughout the conference, over 800 emerging companies gave presentations. Following the presentations, partnering and breakout sessions gave the opportunity for conference delegates to meet the CEO’s of these companies.
Although it may seem hard to believe, it appears that now the MedTech sector has nowhere to go but up. The industry has learned some hard lessons, the companies are lean, operating with greater efficiency, spending cash wisely, and instead of hawking next new technology, they are focused on key problems facing the healthcare industry, and on providing effective solutions. If the healthcare providers are not eager to incorporate some of the solutions, then it will happen out of necessity. It will become incumbent upon the healthcare industry to implement solutions offering greater ROI in terms of improved health and lower cost. Healthcare providers will be looking for solutions that provide digital and point of care diagnosis and health monitoring and treatment options and solutions from personalized medicine and genomic health. Let us stay tuned for some cool innovations from the MedTech sector in 2014. Senior Analyst at Wells Fargo, Larry Biegelsen has also observed that not only acceleration in healthcare spending is expected in 2014 but there are number of other tailwinds including, “emerging technologies and emerging markets contributing more to growth and a more industry-friendly FDA, which should lead to faster approval times for medical devices”.