Value Added Tracks
In a month where a Government minister got shot down by the nation’s media for claiming that the “green shoots of economic recovery” were beginning to show, it would be naïve to suggest that the medical device sector starts 2009 in a buoyant mood. The world is in the grip of an economic crisis, and no industry will be immune from the turbulence that will cause. But despite the gloom, the medtech industry does start the year in comparatively good shape and with plenty of reasons for optimism. The green shoots of recovery, however, these are not. Medtech’s innovative seeds for success were planted years ago. The hope is that they will bear fruit in the next twelve months.
And so, as we embark upon the New Year sales, we face some crucial questions. How are the UK’s medical technologies going to tackle the challenges the current climate brings, help improve health outcomes and, from a business perspective, drive shareholder growth? The successful companies will be those whose products can demonstrate and deliver true value. This month, On Target examines what this truly means.
Lord Darzi’s NHS review last summer demonstrated that, for the Department of Health, value was the central driver for procurement rather than cost. As ABHI’s new Chief Executive, Peter Ellingworth, says in an exclusive interview with On Target , companies are now being urged to ensure that their business plans make provision for clearly identifiable health, economic and patient benefits. Such data will be the key to demonstrating value.
The rapid onset of Health Technology Assessment (HTA) for medical devices is forcing the industry to adopt a new sales and marketing methodology. Until recently, HTA has largely been considered an issue for pharmaceuticals – but across Europe, medical technologies are increasingly finding themselves under the microscope. The key to success is to develop robust value propositions that appeal to the new, influential healthcare stakeholders who hold the purse strings – with the emphasis not necessarily on unit cost, but more importantly on health outcomes. Our article ‘It could be EU’ shows how the European industry is preparing itself for HTA. Recession or no recession, HTA is here to stay.
Finally, we take a look at the fundamentals of marketing and assess what needs to change in these challenging times. Marketing’s chief purpose is to identify and meet customer needs. In such a turbulent economic climate, the customer’s priority is to find a product that is not only safe and clinically effective, but also cost-effective. Developing marketing messages that demonstrate this is central to successful market access. ‘It’s time to plant a tree’ shows that, in an age where “the voice for value is getting louder and louder”, it is imperative for innovations to be customer-focused.
So your New Year sales are well under way. It’s a tough life out there on the medtech High Street – but if you can identify your customers’ needs and work out how they define ‘value’, your prospects for 2009 will be good.
I wish you all the very best.