Author: David Clancy, general manager, Netcare Wellness Ltd The Irish Medical Device Association’s (IMDA’s) Innovation, Research, Development and Commercialisation (IRDC) Working Group has explored the increased use of information communication technology (ICT) by medical technology companies, to meet some key emerging trends in national and international procurement models. Worsening national health profiles and the current economic reality has resulted in significant price pressures on the provision of medical technology products. At the same time, both healthcare providers and their patients have become increasingly expectant with regard to health outcomes and return on investment. These demographic factors are driving new procurement models, which are in turn being facilitated by the increased acceptance of ICT that better enables the capture, sharing and use of patient data. The IMDA’s Deloitte Business Foresight Strategy, launched in May of last year, identifies medical apps and convergence as a positive macro global trend. The report also establishes the need for the sector to develop cost effective products supported by outcomes data. The IMDA’s Statement of Strategy 2012-2015 has identified the unique potential at the intersection of ICT and medical technologies. The IRDC Working Group explored the use of ICT by medical technology companies to meet some of the key emerging business trends and international procurement models. The following are some findings from a workshop that was undertaken by the group. Trend 1: The clinical focus is widening, seeking support from pre-treatment right through to rehabilitation The medtech community continually strides for product development that delivers efficiencies in the clinical setting, as well as the efficacy of the products used. The trend is moving more towards solution provision in addition to innovative technologies. Solutions that enable better clinical service design and on-going patient support is the way forward” Examples of ICT-enabled interventions include:

• A training programme made available to doctors and nurses with regard to the correct use of a product;
• Enabling biometric monitoring data to be delivered by the patient when he/she goes home, thus enabling earlier discharge from the clinical setting;
• Helping to prevent avoidable re-admissions by providing and online rehabilitation monitoring and support programme in conjunction with the core product.

In these instances, medtech companies have to consider both the adaption of their core products, and/or the provision of additional ICT-enabled services to support the clinician and their patients along the care pathway. Trend 2: Reimbursement is becoming increasingly linked to proof of compliance Payers now require more evidence to support compliance. To date, this has been particularly true for products that are primarily used by the patients themselves outside of the clinical settings. Inhalers, for example, are now being deployed that record time and date of usage, monitor correct technique, and provide other relevant data both to the clinic and the patient. Other examples include sleep apnoea monitors, drug delivery products such as sub-cutaneous syringes, and home pathology kits. Regulatory bodies have become increasingly interested in this area, as the trend towards greater use of medical technologies in the home setting will need to be matched with the provision training. Remote supervision and proof that patients can safely use the product as intended is demanded by regulators. Trend 3: Payment of outcomes will become a reality in many sectors Commercial models will continue to evolve, and could ultimately put at least part of the risk of reimbursement against the health outcomes of the patients in question. This will be driven by national and regional policy (e.g. the Affordable Care Act in the US), and be enabled by the greater adoption of ICT in the product development strategies. A relatively simple example of this is in the area of diabetes management. The traditional model of reimbursement based on the supply of needles, blood glucose meters, syringes, insulin etc could be replaced by payment to a service that gets reimbursed for maintaining their cohort of patients within pre-defined blood glucose targets. In this situation, it is the data that is of key importance, and other components are reduced to commodities. This leads key strategic consideration for the medical technology company with regard to where they want to be positioned in the value chain. At the more complex end of the spectrum, drugs, devices, diagnostics and data communication will combine and be integrated to enable reimbursement to be based on outcomes in individual patients. Information will be used to manage medication, monitor patient compliance, modify treatments in response to real-time diagnostics and trigger reimbursement. Trend 4: Lack of data is becoming an increasing barrier to market entry The appetite for ‘proof’ that a product or service will deliver the clinical and (sometimes) business case benefits is increasing, and may become a barrier to entry if not addressed as part of new product development strategy. At the more complex end of the spectrum, drugs, devices, diagnostics and data communication will combine and be integrated to enable reimbursement to be based on outcomes in individual patients. Strategic considerations that have arisen out of IRDC Working Group research: The IMDA’s membership is diverse, both in terms of clinical focus and in their adoption of ICT as part of their product development and deployment strategy. This is not necessarily related to the size of the organisation. Indeed, more established/international companies may find that it is difficult to ‘disrupt’ themselves, while younger organisations may be driven by the need to prove that their products can be disruptive.

• What is potential impact of ‘do-nothing’ for my organisation?

That is, are these emerging trends relevant to my business, and if so, when will they likely impact? It is more likely that the need to consider additional data for proof of benefits and compliance is a near-term commitment, while payment by outcomes is something that will be enforced in the longer term.

• What action can be taken?

Strategy houses talk about the need to understand the drivers for change in the sector (as outlined) and initially segment the product offering accordingly. For example, the result a company evaluation with regard to the emerging trends and ICT may be that;

1. A single product needs moderate redevelopment to take account of the need for additional benefits or compliance data;
2. There is a need for greater integration with other medical device products;
3. A wraparound service that supports the clinician and/or patient in maximising the benefits from the products are required, or
4. The potential impact of these trends is such that the company requires an updated strategy and business plan.

• What are our objectives and likely outcomes?

For some companies, investing in this potentially value-adding area may lead to a competitive advantage and/or open new markets and revenues. However, it may also be as part of a price stabilisation strategy, protecting companies from lower cost production in cheaper markets (especially for consumables and those product categories that are more easily replicated). In the longer term it might be expected the type of services that this enables will become the norm, and thus this becomes a cost of sale. If you are interested in joining the IMDA R&D Working Group, please email: info@ibec.ie.