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Commercialization models in pharma are undergoing a profound transformation. As Spinnaker partner Harris Kaplan detailed in his recent Commercialization 3.0 series (Part 1, Part 2), the shift to the “value era” is upending traditional go-to-market strategies. However, pharma and biotech companies are not alone in facing this reckoning. Medical device companies are navigating a similar evolution, fueled by shifting customer dynamics, regulatory upheavals, and rising economic pressures.
Consider this: private equity investment in and overall consolidation of single-specialty practices—such as orthopedics, dermatology, and cardiology—has surged dramatically, with PE ownership of physician practices quadrupling between 2010 and 2020 (Scheffler et al., 2021). Compounding this trend is the rapid growth of ambulatory surgical centers (ASCs) and office-based labs (OBLs), which are emerging as new epicenters for care delivery. These shifts are forcing medical device companies to recalibrate their commercialization strategies—or risk being left behind.
The medical device sector, historically known for its high-touch, rep-driven sales models, now faces a critical question: How do we adapt to this new reality without sacrificing the customer relationships and innovation that define our industry?
Tides of Change: What’s Driving the Shift?
Consolidation Creates New Challenges Private equity firms and hospital systems are reshaping the buyer landscape, consolidating decision-making into fewer, more powerful entities. At the same time, ASCs and OBLs—low-infection-risk, high-margin care environments—are becoming increasingly prominent. Together, these changes demand a shift in how med device companies engage with and support their customers.
Regulatory Winds are Blowing CMS continues to expand reimbursement flexibility, allowing more procedures to migrate out of the hospital. For instance, CMS recently expanded the ASC-covered procedure list to include cardiac catheterizations and joint replacements, incentivizing a shift in care settings. This creates opportunities for med device companies to target these emerging care settings—but also requires agility in adapting their offerings to fit the financial and operational needs of these lower-cost environments.
Harnessing Digital Innovation Digital innovation is becoming a cornerstone of med device commercialization. From virtual training for physicians to integrated platforms that streamline device adoption, med device companies are increasingly leveraging technology to reduce friction and create value for providers and patients alike.
The View from the Crow’s Nest: The Horizon Ahead
These evolving dynamics echo the themes we’ve seen in pharma’s Commercialization 3.0 journey. Med device companies, like their pharma counterparts, must embrace this shift by rethinking how they deliver value—not just to physicians, but to an increasingly diverse and price-sensitive customer base.
So, what’s next? Stay tuned for our upcoming white paper, The Next Frontier: Transforming Med Device Commercialization, where we’ll explore actionable strategies to thrive in this complex environment. From hybrid sales models to tailored value propositions, we’ll outline how med device leaders can chart a course toward sustainable success.
The companies that adapt quickly will be best positioned to meet today’s challenges and tomorrow’s demands.