There’s ample evidence to suggest that the tip of the medical device industry’s spear is losing its point.
MassDevice.com, along with our channel partners at the Endovascular Forum, recently conducted a poll of endovascular specialists about the influence of medical device company sales reps on their decisions to use a specific device. The results were a bit stark, if you’re in medical device sales.
Of 56 respondents, only 14% said sales reps "had a strong influence" on their decision to use a medical device. More than 85% said that it either depends on the sales rep or that sales reps had a "minimal impact" on their decision.
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That’s surprising, given the traditional strength of sales reps in the adoption of innovative medical technologies. But it also shows that a paradigm shift in the medical device industry is well under way.
Novation CEO Jody Hatcher told MassDevice.com about the declining influence of medical device sales reps in a recent interview.
"I don’t know if it’s good or bad, but I think it’s indicative of the market shifting. And, I guess in terms of the positive, my view is that I think it’s going to force us to think differently about ways of attaining value for both buyers and sellers," Hatcher told us. "Manufacturers are interested in selling their products and attaining market share. Buyers are interested in reducing their costs and, if we eliminate a lot of the sales influence and activity, I think buyers and sellers (with the help of GPOs) can have more sophisticated discussions around what are the most effective products around patient care."
How does Hatcher propose to have more "sophisticated dicussions?" Via the truly astounding amount of data the GPO is collecting. In fact, almost all GPOs collect pricing data through their provider networks, but Hatcher told us that Novation is collecting much more than that.
"Ultimately, we’re moving down the path towards utilization data, market share data, and then ultimately outcome data," he told us. "I think it’s very important and I think there’s value for both suppliers and the buyers. And that’s why I think a lot of the noise around ‘transparency’ is just noise. Transparency is 1 element of driving a much more efficient supply chain. But I think suppliers, for example, benefit from utilization data. So if I’m able to provide suppliers with data on how their product is being used, and if I can provide them with outcome data about their product, to me that is exceedingly helpful for them. It allows them to do a lot of different things that today I think they struggle with."
Putting all that data in the hands of the med-tech industry’s biggest customers is quite an interesting paradigm shift. Utilization data in big pharma is readily available, but medical device companies don’t have anything like it. Put yourself in the place of the medical device sales rep who has to go into a potential customer knowing that the person on the other end of the negotiating table has the pricing and market share data for any given period and you start to see how the playing field is changing in a big way.
The question is, will the medical device industry adapt in time?
