The recent EY Pulse of the Industry Report made the case that the commoditization of many medtech product segments is transforming the medical device sector. The report stated that for medtech developers, “competition is no longer based on historical value drivers—brand, quality and design—but on a single element, price.”
The report’s findings were primarily based on customer feedback in four major medtech markets: the US, the UK, Germany and Spain. The result was advice for medtech companies to create strategies to differentiate their products in an increasingly difficult healthcare market.
Most importantly, the report found that the old ways of differentiating products “appear less valuable to customers.” EY recommended that medtechs differentiate differently by emphasizing those mechanisms that make them stand out in terms of value and outcomes. Specifically, they recommended medtech companies adjust their business models to include multiple differentiation strategies.
E&Y outline four broad tactics toward differentiation:
- Achieve superior outcomes via technological advances;
- Increase scope through services and solutions;
- Increase scope by adding product offerings (within a disease area or across multiple disease areas);
- Take costs out of the healthcare system.
Taken as a whole, successful medtech companies will brand their products and services and create loyalty among healthcare providers by empowering them to do their jobs better, cheaper, more competitively.
One market to watch is the Japanese medtech industry. Japan is a leader in designing innovative healthcare products and medical devices, which means the availability of collaboration opportunities for medtech decision makers and investors. As a leader in technological advances, they are on the cutting edge of differentiation, and are ripe for collaborations that can increase their product and service offerings and develop their commercialization strategies.
The Japanese medical device market remains the second largest in the world, behind only the USA and is set to expand by a compound annual growth rate of 2.9% in US dollar terms to 2018.
According to Espicom Business Intelligence, Japan is the world’s third largest importer of medical devices, behind only the USA and Germany. In US dollar terms, due to exchange rate differences, imports fell by 6.9% to USD 12 million in 2013, compared with USD 12.9 million reported in 2012. In local currency terms, imports actually rose, by 13.8% over the previous year to reach JPY 1.2 billion in 2013, compared with JPY 1 billion reported in 2012. Based on the latest collated monthly data, imports to the year ending October 2014 had near flat growth with USD 12.1 million.
Japan is also among the world’s top 10 largest medical device exporters and is the largest market for medical devices in Asia. Though Japan has less than one-tenth (1/10) the population of China, the Japanese spend more on healthcare. An aging population and high per-capita spending make it an attractive and potentially lucrative market for medical device manufacturers.
As well, Japanese Prime Minister Abe has made this sector one of the primary growth areas for the
country. The government aims to “develop the medical sector, pharmaceutical products, and medical devices and equipment as strategic industries that will form a key pillar for Japan’s economic revitalization,” said Japan’s Chief Cabinet Secretary, Yoshihide Suga.
Interested in entering this market? Medtech Partnering Forum 2015, a new partnering event for the innovative medical technology industry, is set to take place May 28–29 in Tokyo. It will be the first dedicated medtech partnering conference in Japan.
Innovative medtech companies, organizations and researchers interested in partnering their technologies or products, initiating strategic alliances, or tapping into the financing network should submit an application to present by March 20, 2015.
Attendees who register before March 27, 2015 will save USD 200 off the regular registration fee. There is also a reduced registration fee for Japan-based organizations.