Maetrics is a global, full service life sciences consultancy firm that has worked with 4 of the top 5 medical device companies, 8 of the 10 top pharmaceutical companies and 6 of the top 10 biomanufacturing companies.
Given Maetrics’ breadth of experience and expertise, I wanted to sit down with Edward Tomlinson, Managing Director of Maetrics, to hear his opinions on the challenges that medical device manufacturers and the industry as a whole will face in the years ahead.
So Edward, how would you say the medical device industry is progressing as a whole?
By any financial method of analysis the industry is doing very well. It is growing faster than pharmaceuticals, there continues to be a robust series of mergers/acquisitions and as the global population both grows and ages there is an ongoing upturn in the addressable market for their products. Adoption of technologies such as mobile or e-Health and 3, or 4-D printing promises many new avenues of treatment.
However not everything is all roses. The regulatory agencies around the world are increasing their level of oversight in all areas from product development and approval through manufacturing, sales and marketing practices and post launch patient safety monitoring. Further, the revenue and margin from product sales is increasingly dependent on patient outcomes. In order to protect their market position companies need to not only improve their financial performance to avoid becoming a takeover target but must also up their game in product development, compliance and safety to avoid any quality related liabilities.
What factors could potentially effect industry growth in this sector?
If post-merger companies fall victim to some of the same problems we have seen in the pharmaceutical and biotech sector then we will see a downturn in the productivity of the development groups and difficulty achieving the promised synergies by any means other than significant headcount reductions.
There is also the risk of disruptive technologies – for example, if someone invents a polio vaccine, there is no longer a market for iron lungs, or if bariatric surgery does, indeed, cure type II diabetes then the market for blood sugar testing, insulin pumps and all the devices that go along with cardiac and circulatory issues will also go away. As electronic technologies such as cell phones, remote monitoring etc., become more established we may see many more unexpected disruptions to traditional diagnostic and treatment models.
What do you feel are the most pressing challenges that medical device manufacturers are facing today?
Complexity and proliferation.
What we mean by that is the complexity of the products with a wide variety of materials, sophisticated design, on board electronics etc., is extremely difficult to manage from a design and change control perspective, not to mention field service! This is compounded by the sheer number of SKU’s that large companies must manage. As more and more of this information enters the public domain, e.g. via the FDA’s UDI ruling the ability of firms to stay on top of product configuration information over the life cycle of the product is critical. Post merger companies need to be able to adopt a “standard model” approach to capturing and maintaining product related information. These companies have well defined post merger integration plans and spend a lot of effort to consolidate financial reporting systems but rarely invest in areas quality and compliance related areas such as supplier, product definition or complaints management.
What are some of the challenges that manufacturers face when it comes to managing supplier and CMO relationships?
The end to end process of determining first to outsource some (or all!) manufacturing through supplier/contractor selection and approval and forward though multiple batches of product has many competing perspectives. Procurement and SCM want low cost, on time highly flexible supplies, QA wants product that meets specs and maintains long term stability studies and Compliance wants minimal risk.
Negotiating a Supplier Agreement that embodies and addresses all of these competing priorities is a challenge, but when all is said and done the agreement is only “words”. The real test is how well the supplier complies with both the intent and spirit of the agreement. There is a great deal to be said for the “trust but verify” model. Multi-day CMO site visits are expensive and time consuming. Companies who use multiple CMO’s need to develop highly sensitive Risk Assessment methodologies to inform decisions regarding survey or desk audits vs. ion site and in person audits.
To find out more about overcoming the current and emerging challenges, and to hear more from Maetric’s Managing Director, Edward Tomlinson, check out the American Medical Device Summit taking place in Chicago on September 21st-22nd, 2015.