The medical device industry is shifting, and startups and established medical device companies alike should prepare for key trends identified in a new report from Deloitte.
Deloitte’s Center for Health Solutions and MedTech Innovator worked together to analyze MTI’s database of approximately 1,000 applicants for MTI’s 2021 startup accelerator program.
The startups that applied had at least developed a prototype, but had not yet progressed beyond a series D round of funding. They come from 48 states in the U.S. and 43 countries.
Alva Health was named as the competition’s winner last week, but they’re not the only promising company. Of this year’s applicants, about three-quarters have raised equity funding, totaling a collective $3.9 billion. More than one-fifth of the applicants already have customers, and 9 percent have won regulatory approval.
As part of its analysis, Deloitte interviewed leaders from startups and medtech companies that could be strategic acquirers. The findings are relevant not only to startups, investors and strategic buyers, but also for established medical device companies planning for the future.
“Healthcare is transitioning away from the historic model of reactively treating illness. By 2040, Deloitte estimates that two-thirds of healthcare spending will be related to well-being and the early detection, prevention and curing of disease,” the report said. “This is good news for the medtech industry. Disease detection and prevention will likely rely on sensor-driven, regulated medical devices, which could create a substantial new medical technology market. We see a lot of focus among start-ups on precisely these areas. How and where heathcare is delivered is becoming just as important as the care itself. In the future, we expect connected ecosystems to transform where patients receive care, including through virtual and retail channels, and even at home. The transition from episodic care to improving and maintaining well-being will put pressure on the traditional medtech business model.”
Deloitte encouraged established medical device companies to embrace new business models (such as those with a consumer-centric focus), invest strategically and earlier with licensing deals, co-developments, joint ventures or equity stakes, revamp the product development process and focus on opportunities for reimbursement.
Here are six key trends identified in the Deloitte report, which you can read in full here (PDF download).