MedTech Barometer 2018: The Industry Is Taking Note of New Business Models

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A recent study by Simon-Kucher & Partners shows that while the overall outlook in the medtech industry is bright, companies still need to adapt their business models to customers' changing needs.

March 20, 2018 – Forecasts for the medtech industry are optimistic overall with 60 percent of companies in the sector expecting business to improve in 2018. Other medtech firms are more cautious: around a third believe they will see little improvement on last year, although only seven percent predict the market environment will actually worsen in 2018. These were some of the findings of the MedTech Barometer 2018 conducted by the global strategy and marketing consultancy Simon-Kucher & Partners. The positive view held by the majority of industry players is a clear improvement on previous years and marks a steady trend of increasing optimism in the medtech industry.

“This positive expectation is mainly due to demographically-driven demand and the high number of new product launches”, explains Joerg Kruetten, Senior Partner, Member of the Board, and Head of the Global Life Sciences Division at Simon-Kucher & Partners. “Furthermore, we are seeing considerable traction in emerging markets.” The compound annual growth rate of the medtech industry in these countries was almost 40 percent between 2012 and 2017. “In recent years, companies have laid solid foundations, such as by getting their products approved, ensuring market access, and establishing their presence in key channels. Now they are reaping the rewards of commercialization in these new markets.”

The outlook on profit is positive. The industry expects profit to increase by seven percent in 2018 (in comparison, profit rose by around four percent in 2017). On the other hand, companies believe price erosion will slightly rise. Moreover, the topic of price pressure remains a challenge for 77 percent of medtech companies. According to Kruetten, “The top three reasons for this are increasing price transparency for customers, greater customer negotiation power, and price-aggressive competition.”

The “new business model” success story
Medtech companies now understand that in order to overcome the challenges of the market and meet customers’ needs, they need to rethink their business models. The MedTech Barometer reveals that four out of five companies have either changed their business model in the past three years or are currently considering changing it. “And their success shows them that they are on the right track. Firms that have changed their business model in the past three years report an incremental topline impact of 5.3 percent on average”, says Kruetten.

In particular, medtech companies understand that digitalization offers great possibilities for changing their business models. Over 80 percent of the companies surveyed see digitalization as an opportunity and have already incorporated a strong digital component into their new business models, e.g. by providing their customers with digital solutions.

Industry conference: MedTech Strategy Forum
The results of the MedTech Barometer were presented on March 14th at Simon-Kucher’s 10th European Medical Technology Strategy Forum in Brussels, Belgium. The event’s theme was “MedTech 2.0 – Securing Profitable Growth Through New Business Models”. During several breakout sessions, keynotes, and discussions experts from Simon-Kucher as well as a guest speaker shared best practices and insights into how medtech companies can leverage digitalization opportunities and innovative contracting to build winning business models. Key topics and speakers at the forum were:

  • Daniel Fallscheer (guest speaker), Senior Business Manager, Head Integrated Health Solutions Germany Medtronic GmbH: Keynote speech “Business models in practice – A case example”
  • Joerg Kruetten, Senior Partner, Member of the Board, and Head of the Global Life Sciences Division: Welcome and introduction; “Market trends and challenges”
  • Gerald Schnell, Senior Partner, Head of the Medical Technology Competence Center: Closing remarks
  • Omar Ahmad, Managing Partner: moderated the round table discussion “MedTech Business models 2.0 – Moving from concept to implementation”
  • Raf Onclin, Partner: breakout session “Business models & Architecture – Responding to market and competitive dynamics”
  • Andreas Silber, Senior Director: breakout session “Business Models & Monetization – Optimizing contracts and capturing additional budgets”
  • Jan Bordon, Senior Director: breakout session “Business Models & Digitalization – Utilizing digitalization as facilitator and core component of new business models”


*About the MedTech Barometer:
The MedTech Barometer is an annual medtech-specific online survey on business expectations conducted by Simon-Kucher & Partners among C-level executives and board members, functional heads and managers, and private equity investors in Europe. With approximately 60 top-level participants in 2018, the study reveals current commercial trends and challenges in the medtech industry and shows how players are addressing specific trending topics. This year’s focus was on innovative business models.

The study as well as the forum presentations are available on request.

Simon-Kucher & Partners, Strategy & Marketing Consultants:

Simon-Kucher & Partners is a global consulting firm with more than 1,100 professionals in 34 offices worldwide focusing on TopLine Power®. Founded in 1985, the company has more than 30 years of experience providing strategy and marketing consulting and is regarded as the world’s leading pricing advisor.