Interview
Managing Partner, Innovation in Medtech LLC
David Cassak is an expert in the medical device industry, with more than 30 years of experience in the healthcare sector. He has also written extensively on medical devices. Formerly VP of Content for Elsevier Business Intelligence (EBI), publishers for the medical device and pharma industries, Cassak launched a new company two years ago with partner Steve Levin called Innovation in Medtech LLC, which publishes The MedTech Strategist, a publication focused on the global medical device industry.
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One of the main conclusions of the Forum of the BioRegion was the undeniable impact technology has on our relationship with healthcare, where the biopharma, medtech and digital health sectors have a great deal to say about, being the key sectors that we need to face. David Cassak, speaker at the Forum of the BioRegion and one of of the keynote speakers about the current state of medtech, shares with us inspiring points of view on the main trends and challenges on medical technologies. Spoiler alert: the days of volume over value are long gone.
I'd say the industry is in good shape but it is struggling with some critical issues right now. Mostly, there's a fairly recent effort to redefine the value of medical technology, due to healthcare reforms in the US and cost pressures. One of the key mantras in the industry today is "from volume to value". Companies will be successful in the future not by selling more products but by addressing the whole issue of value in healthcare. That means impacting the healthcare process in a longitudinal way, which is to say, placing the devices in the context of a broader episode of care and also trying to find truly meaningful breakthrough capabilities.
The main driving force is cost pressure. Take the US as an example: the original intent of the healthcare reforms under the Obama administration was to expand coverage. The problem you have is that if you're not going to bust the budget on that, you've got more patients but the same amount of money. The whole notion of going from volume to value is that we have to get better because simply delivering more care doesn't really help.
The flip side of that is the ability of medical device companies to find new technology that can help. If you want to shift the perspective from volume to value, you have to look at new technology horizons. The most notable one is the digital horizon, but the question for the device companies is: Can you use some new technology so that they're really delivering better care for the same cost?
The model for medical devices over the past 20 years has clearly been an M&A driven industry. The collaboration we'll see is big tech companies getting to work with medical device companies to infuse them with some digital tradition. The best example of that is the Johnson & Johnson and Google joint venture Verb Surgical, which is truly creating a next generation. There's not a whole lot of evidence today that high-tech companies like Google and Microsoft are really interested in buying medtech companies. Those are sufficiently different skill sets and very different business models.
It's hard to predict but if I were to pinpoint maybe two or three segments with high potential, one would be neuromodulation and neurostimulation because it has the capability to help patients with chronic conditions like epilepsy or depression who are not responsive to drug therapy.
Digital is another key segment. I'm mostly thinking about all the capabilities that sensor implementation can have in, for instance, remotely tracking the success of a therapy for heart failure.
I'm more guarded about robotics or 3D printing. Robotics clearly looks like a very futuristic technology, although it's been around for a long time. It's catching on. The key is whether the next generation of surgeons will want to use them, as they are currently really conservative. They like the feeling of working with their hands.
Reading the landscape and understanding the role that medical devices will play. Thinking about where your device fits into a larger context of care is really important. Everyone is paying attention to long-term disease states, but what's the role for a technology that should be used for a short period of time in an operating room or an ICU?
Besides, there's something really worth noting: there's not enough venture capital around the world. Some of that's because venture capital is going to other sectors like digital, IT software and biotech. Some is because the model for developing medical technology has become more challenging. If you're a small company, of course the big challenge is where you're going to get the capital from.
I'd highlight RefleXion Medical, which is using scanning as a therapeutic tool for metastatic cancer. If it's successful, it'll have a huge impact on cancer therapeutics. There's another company called BackBeat Medical, which uses novel pacing algorithms to treat hypertension, that has just won the Innovation Award of the TCT Conference in Washington DC. There're so many interesting projects that it’s difficult to highlight just two but I'd certainly recommend these.
