Value-to-serve Business Model Spurs Growth Opportunities for Neuromodulation OEMs

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MOUNTAIN VIEW, Calif., June 29, 2016 /PRNewswire/ -- To sustain profits in existing end-user markets, original equipment manufacturers (OEMs) of neuromodulation medical devices need to adopt a value-driven business model with growth strategy centred towards continuous differentiation and transferring cost efficiencies across the value stream. The increasing regulatory scrutiny on implantable devices and demand for more clinical evidence is further compelling OEMs to direct their channel growth initiatives toward improving sales of existing or new products in mature markets.

Transition towards patient-centric care demand OEMs to explore successful partnerships with new resources such as investors, consumer electronics firms, ambulance agencies and individual counselling psychologists. This will help OEMs to sustain channel growth and product premium in established markets. With these goals in mind, OEMs are striving to integrate social, mobile, analytics and networking applications towards offering therapies that can deliver connected and collaborative care.

New analysis from Frost & Sullivan, Neuromodulation Technologies - A Strategic Perspective (http://utm.io/256974), finds top OEMs focusing on single-source suppliers to help them improve operational efficiencies, and it is crucial to balance compliance on quality of care across the value chain. OEMs are enthusiastic about implementation of ecommerce and operational analytics, poised to demonstrate cost leadership while developing customer relationships.

For complimentary access to more information on this research, please visit: http://frost.ly/ig.

While most neuromodulation device OEMs have been focusing on reducing regulatory overheads while establishing safety and efficacy of existing and pipeline products for mature markets, many venture capital (VC) and private equity (PE) players in the medical device industry have been successful in exiting from promising start-ups. Accelerating the launch of competitive products and services for mature markets enable established OEMs to reinvest profits in acquiring innovative product portfolios, contributing to a healthy consolidation cycle in the industry.

"Industry consolidation in the form of acquisitions, joint investment with VCs, and bundling clinically-demonstrated drug-device combinations, inclusion of non-traditional channel partners will enable OEMs to position products appropriately," said Frost & Sullivan TechVision Industry Analyst Arjunvasan Ambigapathy. "Additionally, continued VC investments will lower the entry barriers for non-traditional participants with innovative therapies for refractory conditions, such as Crohn's disease, Parkinson's disease and rheumatoid arthritis."

The entry of players offering minimal or non-invasive technologies and having strong intellectual property, regulatory approvals and clinical data regarding therapies for chronic lifestyle disorders are more likely to fuel consolidation within the industry. Furthermore, the presence of reputed VCs and active involvement of late-stage PE firms are prompting OEMs to diversify their R&D investment risks by identifying early investment opportunities in innovative start-ups operating in commercially attractive markets.

Meanwhile, long entry timelines and unclear regulatory pathways in certain hi-potential markets are intensifying the need to develop new local culture-centric channels to drive the market growth of existing products, which might be approved by either U.S. Food and Drug Administration (FDA) or Conformité Européenne (CE).

"Greater regulatory scrutiny and need for speedy approvals fuel the development of effective clinical data management solutions, which are reliable tools to communicate safety and efficacy of the therapies," noted Ambigapathy. "Predictive analytics tapping patient data and supplier productivity can help reduce compliance overheads, design population-centric care programs, and directly engage physicians or patients in co-creation initiatives."

Neuromodulation Technologies - A Strategic Perspective, part of the TechVision (Medical Devices & Imaging) subscription, evaluates the role of technology in transforming the global neuromodulation industry. This research service analyzes the top technology trends influencing market growth from both technology and industry perspectives. It examines the scenarios within the industry and reviews the roles and strategies adopted by both existing and emerging participants to sustain channel growth and margins.

Frost & Sullivan's global TechVision practice is focused on innovation, disruption and convergence and provides a variety of technology based alerts, newsletters and research services as well as growth consulting services. Its premier offering, the TechVision program, identifies and evaluates the most valuable emerging and disruptive technologies enabling products with near-term potential. A unique feature of the TechVision program is an annual selection of 50 technologies that can generate convergence scenarios, possibly disrupt the innovation landscape, and drive transformational growth. View a summary of our TechVision program by clicking on the following link: http://ifrost.frost.com/TechVision_Demo.

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Neuromodulation Technologies - A Strategic Perspective
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