Posts Tagged business pitch
Aligning value proposition: From Preclinical to Market for Medical Devices
Posted by Darshana V. Nadkarni, Ph.D. in Biotech - Medical Device - Life Science - Healthcare on December 22, 2014
Tim Pelura, CEO, Surpass Preclinical CRO talked on how medical device companies can align their strategy, from preclinical to market, with a focus on the value proposition, at www.bio2devicegroup.org event.
We are operating under a new reality now where power has shifted to the payers and the providers, said Pelura. Medical device companies are evaluated based on safety and procedural efficacy as well as cost and value. Increasingly heightened regulatory scrutiny and tightening FDA regulations have led to increase in audits (which were up 40% in the last year) and warning letters are (which were up 24% over the last 2 years). Due to regulatory and reimbursement challenges, medical device companies are focusing their R&D efforts on improving already approved devices, rather than developing innovative new products. Meanwhile startups are finding the landscape challenging due to funding challenges and increasing costs of bringing new products to market.
Inkeeping with the reality of pressures on payers that are transmitted down, new healthcare delivery models are emerging, and therefore, patient pathways are being modified to obtain to obtain better outcomes, with less cost. Medical device companies will need to work with new business models, that solve significant problems and reduce overall costs. Companies seeking growth will need to expand their offerings to target underserved populations and lower socioeconomic classes.
In essence, it is about the value proposition offered by the new product or service, “what benefit you provide for who and how you do it uniquely well”, said Pelura. He advised, these “must-haves” in a business pitch, “describe your target buyer, the problem you are seeking to solve, and why you do it better than the alternative”.
Pelura walked the audience through the process of arriving at the value proposition. First, companies must define the problem they are seeking to solve and identify correctly the need to solve the problem. Next, they should try to go after obvious problems, rather than aspirational or “good to solve” problems. And finally, they should try to address acute or critical problems.
In defining a solution, they should try to generate many ideas and then measure the viability of customer adoption of each idea using gain/pain ratio; what the customer stands to gain versus the cost of adoption of the new solution. The best solutions are those that offer game-changing benefits, with minimal modifications to the existing process or environments, said Pelura. Go for “Disruptive Innovations, that are Non-Disruptive to Adopt”, advised Pelura. Medical device companies must visualize the entire process or patient pathway to ensure that the new solution would cause minimal disruptions, in the whole process.
While new technologies often emerge with a focus on engineering and progress to bench testing and then plan preclinical, and clinical strategies and only then consider navigating regulatory, market, and reimbursement challenges; in actuality, they should invert the process. They should begin with considering reimbursement challenges, analyze the competitive landscape, study the market opportunity, give thoughtful consideration to the regulatory challenges, then consider clinical and preclinical strategy, before embarking on prototype and bench testing. Because if the value proposition is wrong then a company can end up with a product that no one wants or needs, resulting in considerable waste of precious innovation dollars and time, said Pelura.
Speaking of Surpass, Pelura shared that preclinical Contract Research Organization, Surpass is doing things differently. While having deep expertise as a preclinical CRO in helping medical device companies with their preclinical in vivo and human cadaveric studies, Surpass also seeks to impact the system, by probing and assisting their clients with questions that go to the value proposition. Surpass assists the clients in designing the most translatable preclinical study by understanding issues of clinical end points, product’s desired features and characteristics, all the while keeping in mind who would be operating the device, studies and activities that might need to be completed to demonstrate the products, performance, safety, and efficacy, as well as data that would be required to drive reimbursement and more. This novel process ensures that any preclinical testing performed is aligned to the new product’s value proposition, hence helping save valuable healthcare innovation dollars.
The session was followed by Q&A.