Fogarty Innovation’s policy partner, Medical Device Manufacturers Association (MDMA), recently held its annual Medical Technology Executive Forum, featuring the industry’s leading CEOs and senior executives to discuss the critical issues and insights affecting the industry today.
The speakers represented an impressive “who’s who” in the field, including Leslie Trigg, chair and CEO of Outset Medical; Kwame Ulmer, founder of MedTech Color; Nada Hanafi, MSc., MPH, founder, MedTech Color and SVP Regulatory Strategy, Veranex; Jon Norris, managing director, healthcare practice, Silicon Valley Bank; Josh Makower, MD, director and co-founder of Stanford Byers Center for Biodesign; Fogarty Innovation’s Denise Zarins, chief operating officer and Andrew Cleeland, CEO; and MDMA’s Mark Leahey, president, CEO and Fogarty board member, among others.
Leslie and Mark kicked off the event with welcoming remarks, which were followed by a presentation on medtech investment and exit trends from Jon. Other engaging topics included diversity in medtech; updates from the FDA’s Center for Devices and Radiology Health (CDRH), the Centers for Medicare & Medicaid Services and Medical Device Regulation (MDR); and insights on the upcoming elections and the future of medtech innovation.
“Fortune favors the bold”
While presenters shared a variety of topical overviews, this theme that Leslie and Mark introduced provided an apt summary for the event. Each segment of the industry is making great strides by itself, but collectively acting even more boldly to create better outcomes for patients and their families. The medtech industry has made tremendous progress over the past decade as it has embraced innovative advancements in new areas like digital health, wearables, artificial intelligence and virtual reality—all thanks to creative industry partnerships.
Below are highlights of several panel sessions.
Financing landscape: Cautious
Jon Norris discussed investment trends he’s seeing in the market, based on the bank’s bi-annual report on the state of the healthcare industry. Funding was very active between 2019 and 2021, with the latter year being the strongest on record for fundraising and investment. Despite entering what currently looks like a downturn in the economy, fundraising remained solid for the first half of 2022, with $4.5 billion in medtech investment concentrated in later-stage companies. Currently the bank is seeing a slowdown in Q3 as investors are primarily looking to maintain their existing portfolio and set valuations so they can get a good return on investment given what’s currently happening in the public market.
The bank predicts venture fundraising won’t be as active in the second half of the year and investment in companies will decrease. While there are a lot of worthy later-stage medtech companies, the current state of the market will make IPOs difficult. The key takeaway: There’s still capital going into medtech, but investors are worried given the state of the market. However, while it’s a tougher market, there are still bright spots, most likely into 2023.
More diversity in the industry will improve outcomes
Kwame Ulmer and Nada Hanafi led this discussion on what companies are and can be doing to ensure the ecosystem reflects today’s diverse society. Both work with MedTech Color, which aims to advance much-needed representation of persons of color in the medtech industry.
A diversified workforce will help attract talent from other industries and ultimately improve outcomes, provide more patient access and drive corporate returns. A key component is creating the structure to retain the talent, which requires commitment from the C-suite level, along with persistence and a willingness to invest resources. Diversity at all levels of the industry will lead to broader perspectives and better address the needs of disparate patient populations. To that end, companies need to incorporate inclusivity at all stages of the product development and clinical testing processes and ensure their actions and commitments are measurable.
The current election cycle is a tumultuous one, with 24% of Americans believing we’re headed in the right direction, compared with 69.3% who disagree. Panelists Josh Holmes, Andrew Rosenberg and Alanna Temme, who represent both parties, shared their thoughts. The Democratic side voiced cautious optimism that situations have improved over the past month as they look to limit the number of losses so they will still have good representation even if the Republicans take control of the House of Representatives.
Of course, a lot can still happen right up until Election Day, with economic factors expected to influence many close races. In addition, there is uncertainty over how groups like working-class Hispanics and other “swing” groups will vote, given all the competing concerns. It will be an interesting election to follow, but regardless, MDMA works in a bipartisan fashion, focusing on improving patient care.
The future of medtech innovation
Three leaders at the forefront of innovation—Josh Makower of Stanford Byers Center and Fogarty’s Denise Zarins and Andrew Cleeland—led a panel discussing the greatest clinical needs and how medtech is positioned to address them, focusing on ways to advance new technologies to market and improve patient care.
Josh still sees tremendous inefficiencies and waste in the healthcare system, with opportunity to improve care and reduce costs. While digital health represents a growing field, there’s a need for structural changes in the healthcare delivery and payment systems to reach more people more effectively. He outlined three core areas that will continue to need focus: “classic” diseases, such as cardiovascular disease, diabetes, hypertension and obesity, which all are predicted to rise precipitously; mental health, where we are beginning to see technology that is more proactive to treat depression and anxiety; and the reality of an aging population, which will require care that exceeds the current infrastructure. The healthcare delivery system is pivoting to move from the acute care setting into venues outside the hospital, with more focus on preventing rather than treating late-stage chronic disease.
“Anything we can do to improve efficiency via point of care devices and diagnostics for home healthcare and telehealth will greatly improve access to care, which is critical with an aging population and the need to reach patients who live in rural areas,” added Denise. She also thinks robotics, with the ability to perform surgery anywhere, will play a critical role in helping those in less urban settings.
Artificial intelligence will play a larger role in early detection and prevention, which will help mitigate problems presented by an aging population. There’s also a need to broaden the focus of innovation from end-stage diseases to preventative strategies starting earlier in life. Without new solutions, the healthcare system won’t have the capacity or labor force to manage the disease burden of the aging population. This prevention technology will require ample financing, especially for the early-stage, unproven entrepreneurs who help drive innovation. So far, that’s been challenging to get, even for companies with a proven team and technology. “The capital is out there, but we’re seeing a ‘wait and see’ approach as VC firms focus on their current portfolios,” said Andrew.
However, organizations like Biodesign and Fogarty continue to focus on educating innovators in this space since these needs continue growing. Both are aiming to create an ecosystem that accelerates innovation to address large unmet needs and improves quality of life for patients and their families, while also generating opportunity for job creation.
As Mark closed the meeting, he reiterated that it’s critical to have the support of MDMA’s members, working groups and sponsors to address the many challenges the industry faces. The result will be the opportunity to make a big impact on advancing patient care.