Posts Tagged Emerging Markets
Aroon Krishna and David Judelson, co-founders at VirtuMed talked about the challenging environment for current medical device manufacturers and VirtuMed’s Synapse Mobile cloud based, on-demand, customer engagement platform solution to address the challenges, at a recent www.bio2devicegroup.org event.
Enumerating examples of challenges impacting medical device marketplace, Judelson, said Boston Scientific neuro modulation business has declined due to reimbursement challenges, Medtronic agreed to settle and stop the sales of pain med pump due to link with patient deaths, and big promise and subsequent failure of renal denervation solution has cut the growth among other device manufacturers. There are challenges across the board from development to commercialization, said Judelson. Hospitals are faring no better. Nearly 40% of California hospitals received bad grade, constant M&A activity among hospitals, pressure from changing government initiatives, difficulties with privacy and security of EMR data has all led to medical device companies spending more money to get less and spending more in sales and marketing efforts is not the answer.
Five current headwinds are defining the existing environment. Increased regulation and declining reimbursement from fee for service to bundling and changes in how CMS pays, is putting a lot of pressure on providers who pass the burden on to device manufacturers. Second, there is a lot of variability in how different hospitals measure quality. Third, aging population with increasing co-morbidities is leading to variability in clinical trials and making it challenging to assess the effects of interventions. Four, challenges are increasing with decreasing hospital access for sales reps. Five, huge global volatility with large swings in foreign exchange rates, government uprisings etc. is making it hard to estimate earnings.
Hospitals are often burdened with internal challenges of system integration, promise and challenges of mobile technology, problems of achieving seamless inter-operability, thinning margins, vendor management issues, physicians getting overburdened with administrative tasks, HIPPA issues and more. All these challenges are compounded with sub par performance from medical device companies as they are delivering more failures in R&D, demonstrating lack of innovation with decreased ROI followed by decreasing investment in venture and M&A activity.
Currently, there are few solutions for comprehensive customer management, said Judelson. Some general solutions like Salesforce, Oracle, imshealth, freshdesk, Veeva and Zendesk have been applied. However, these require significant customization, often have complex pricing structure, are pricey for small to mid-sized enterprises, have complex IT integration and archaic mobile user interface, and are often based on limited knowledge of medical device econsyste. There are no existing CRM solutions specially designed for medical device industry, said Judelson.
VirtuMed’s cloud based remote connectivity solution specifically fills in this gap, where device manufacturers can establish direct line with the customer, provide better, more timely customer support as a value added service, develop apps, and leverage knowledge of product users globally with access to real time outcomes data. There are many gains from such timely information. Research indicates that with timely physician access to post surgery recovery process and real-time conversation with patients, recovery occurs faster and patients remain more engaged in their recovery. While there is a great deal of patient to patient interaction in social media, there are fewer tools for patient to provider engagement and that needs to change.
VirtuMed’s Synapse mobile solution helps build a connected ecosystem that combines commercial CRM, social networking, on demand communication, big data visualization, HIPPA compliant infrastructure, and enhances security with data changing hands while ensuring availability of data at the right time to the right people. This solution aims to unite all key stakeholders on a single platform with primary objective for positive patient impact, said Krishna. VirtuMed product is poised to offer support to companies of any size and its tech solutions can be applied at each stage in medical device life cycle, from early innovation to clinical stakeholder engagement, to customer engagement to CRM platform to enable growth in emerging markets; literally from ideation to discovery to clinical to commercialization, said Krishna.
The talk with followed with Q&A.
Posted by Darshana V. Nadkarni, Ph.D. in Biotech - Medical Device - Life Science - Healthcare on April 11, 2012
Emerging markets already represent huge growth opportunities for pharmaceutical companies. In may countries, lifespan has increased and as people live longer, they are more in need of traditional health enhancing drugs for common ailments like diabetes and cardiovascular diseases; in many countries such as India and China, as diet and lifestyle changes, there is also and increase of such diseases; and there is a huge and growing middle class that is able to spend the money, and is more conscious of health. One would presume that these same factors will also open growth opportunities for medical device companies. For instance, Medtronic expects India sales to grow 25% for the next five years and is considering setting up R&D and Manufacturing facility in India (I saw firsthand that emerging markets is a big priority for Medtronic, when I facilitated leadership and inclusion training for Medtronic team in India in 2010 – https://darshanavnadkarni.wordpress.com/category/musings/). At TiEcon 2012 (www.tiecon.org), a panel that includes Katie Szyman, President at Medtronic Diabetes, Tom Fogarty, Serial Entrepreneur, Renee Compton Ryan from J&J, and Dana Mead from Kleiner Perkins, will address trends, challenges, and opportunities presented by emerging markets, in this $350B industry. I am also looking forward to hear more about “reverse innovation”, a term coined by GE’s Jeffrey Immelt, where the innovation in new products and services is driven by cost conscious emerging markets, and is then reintroduced into the Western markets.
Mobile health panel, at TiEcon, will discuss entrepreneurial opportunities in the fast growing field of Mobile Health. Increasing reach and easy access of mobile communication devices like mobile phones,Tablets, patient monitors etc. is making monitoring of health, dissemination of health information to patient and care providers, and providing healthcare in a timely and real-time manner, possible. A panel of experts including Aza Raskin from Massive Health, Ron Gutman, CEO of HealthTap, Jack Young from Qualcomm, and Alex De Winter from Mohr Davidow will share success stories and discuss the pitfalls to avoid, in the mobile health market. This is a fast growing market which has yet many unanswered questions like, who would own the data, what would be the regulatory impact, and more.
Panelists Randall Spratt from McKesson, John Mattison from Kaiser, Adrian Rawlinson from Brown & Toland Physicians, and Jim Murray from UC Irvine Health Information Services will discuss investment trends in health IT including demographic trends, technological enablers, cost pressures, regulatory mandates and where the VCs are looking to invest, given all the challenges.
With mHealth, cross-functional collaboration, and emerging markets as the drivers of innovation, the boundaries are increasingly more flexible and TiEcon is focusing on Life Sciences, and addressing the enormous entrepreneurship and innovation that will take place by those playing with the boundaries, rather than within them. Register at http://www.tiecon.org.
Posted by Darshana V. Nadkarni, Ph.D. in Biotech - Medical Device - Life Science - Healthcare on January 17, 2012
OneMedForumSF 2012 (onemedplace.com/forum), the Emerging Company Finance Conference took place in January. It began with the workshop on “Entering China” and ended with a panel discussing “India as a Market Opportunity”. Taking place concurrently while J.P. Morgan annual conference was taking place at the close by venue, the differences in some cases, could not be more stark. And the similarities in terms of focusing on emerging markets, were also evident. At J.P. Morgan conference, it was clear that the big pharma companies are flush with cash, dust is settled for most of them around coming to terms with patent expiration challenges and strategic realignment issues, and debt is cheap. All of this is leading to big biotech becoming active acquirers, with 2011 fundraising at $23.4 B, almost on par with the funds raised in the glory days of 2007. However, most funding was raised by public companies and the players were big syndicates. At OneMedForum, I saw a sharp contrast. I saw some cool technologies but less optimism and good news on the funding front, as the discussions in the hallway centered around “but where is the money” especially for early stage companies. Also all large pharma companies are focusing on almost guaranteed market growth among emerging markets and therefore are more attractive to individual investors as well. So what is the future for device innovation and early stage companies? The answers will have to be as creative with respect to funding, as their innovative offerings are.
The workshop on entering China, on day one, began by defining the opportunity for non-Chinese companies to commercialize medical products and services in china. The lessons shared included, a start with a well defined plan. Companies seeking to enter China must define their business model early on to avoid issues concerning repatriation of money earned in China, aggressive safeguarding of IP, and other issues like strategic clarity around the long-term objective whether the interest is for R&D or manufacturing or reverse innovation. A well defined plan should be followed with good understanding of culture and identifying right resources and forming strategic partnerships and relationships to make it happen. China is a diverse country and for doing business, it would be best to form relationship with key local person, on the ground. Additionally, understanding the culture, including little things like sharing a drink with a business partner, lowering the glass when toasting, not giving the clock as a gift, could make difference. And then there are other issues like being comfortable with lack of control, slowness and complexity of decision making, and sometimes slow execution of a decision that was achieved speedily, that can be challenging.
A panel on the last day discussed market opportunities in India. Yash Rana, Attorney at Goodwin, shared that allIndiasectors are open to foreign investment without much regulatory hurdles. Once the contract is signed, companies in India honor them, unlike in China, where it is often a starting point for further negotiation. Also IP is much more secure and the patent law is almost up to Western standards. Tom Moore, CEO of Advaxis shared that their company chose India for cervical cancer study trials, since there are many cases of cervical cancer, the cost is low, and they found medical community to be cooperative, helpful, and knowledgeable, and it was an overall positive experience. The challenges they faced were around good prior medical history and records because in some cases they were non-existent. Rana shared that a universal ID system is now being rolled out in India and it will make keeping track of patients enrolled in clinical trials, easier. While India has strong expertise in Chemistry and Pharmacology, historically it has not had strong expertise in Biology but collaboration and cross-fertilization makes it a win-win strategy, said Sri Mosur, CEO of Jubiliant. Biocon is the first pharma company out of India, said, Abhijit Zutshi, head of North American Operations for Biocon, India. While innovation was not big in India, that is quickly changing, added Zutshi.
Some of the other panels I only attended sporadically, while also spending my time at J.P. Morgan Conference. Other interesting panels focused on Mobile Health & Medical Devices and on Diagnostics & Personalized Medicine, both of which should be cranked up in high gear with innovation focus tied to affordability and reduction in healthcare costs. Other panels also explored investment trends in Biotechnology, and investment trends in Medical Devices and presumably explored trends in regenerative medicine, neurological disorders, vaccines, & infectious diseases on the biotech side and cardiology, neurology, orthopedics, and diabetes on the device side.
While the outlook remains somewhat bleak, with respect to funding, the company presentations were high quality, panels and workshops were insightful, and the conference presented ample opportunity for CEOs, corporate development executives, and some sprinkling of investors to build relationships and hopefully find creative solutions for funding dilemma.