Transcript InnAccel
Accelerating Pharma time-to-market, cost effectively Asia Europe Americas Open Innovation in Medical Devices (Emerging Market Perspective) D. A. Prasanna Sharing experience in Open Innovation This talk is based on my experience in the MedTech industry growing GE 100 fold in a decade in India through innovation as a Strategic Advisor to InnAccel, a MedTech Accelerator and In Ecron Acunova CRO bringing new devices to market faster Emerging Markets are attractive but need Affordable MedTech Affordability makes care accessible, expands market 50000 USA Per capita GDP (2012 $) 8000 4000 BRC 2000 INDIA 1000 2012 Key: PC: Per Capita HC: HealthCare BRC: Brazil, Russia China Pop: 313 mil PC GDP: $51K PC HC Spend: $8,895 BRC Pop: 1.7 bill PC GDP: $8,221 PC HC Spend: $822 INDIA Pop: 1.4 bill PC GDP: $3,183 PC HC Spend: $223 Pop: 1.7 bill PC GDP: $4,375 PC HC Spend: $459 Pop: 1.2 bill PC GDP: $1,535 PC HC Spend: $58 2025 Per Capita HC Spend estimated at 7% of GDP and 10% of GDP for India and BRC respectively in 2025 Affordability is largely unmet in medical technology Medical Devices: US$5.4b, >70% imports Domestic industry focused on commodities or low end equipment Pharma: US$11b, primarily domestic Strong domestic generic industry; with strong exports Hospital 8% Pharma 3% Medical Devices Other 14% 75% Delivery: US$58 billion, completely domestic innovative, low cost service delivery models Medicines and doctor’s service have become affordable in emerging market …MedTech remains unaffordable… Affordable MedTech- A large economic opportunity 600 Per capita MT Spend 400 USA USA MT Spend: $225 B PC MT Spend: $643 MT Spend: $120 B PC MT Spend: $381 BRC 80 MT Spend: $156 B PC MT Spend: $86 40 20 BRC 10 I 2012 MT Spend: $36 B PC MT Spend: $21 INDIA MT Spend: $42 B PC MT Spend: $30 Key: PC: Per Capita MT: MedTech MT Spend: $5.4 B PC MT Spend: $4.4 2025 Emerging markets are… Largely self pay markets Lack of skilled professionals High price sensitivity Large volumes Inadequate infrastructure Low per capita spends Large public health system Alternate care environments (~50% of babies in India are born at home today, necessitating new products for neonatal care - until they can get to a hospital) ...fundamentally different for MedTech Innovators Open innovation is “the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets………..” - Henry Chesbrough Helps move mind-set beyond device cost & features to Affordable procedure for the Patient/Doctor Viable investment for the Hospital…. Leading to a totally different Product…or Process solution! Market Specific Affordable Products Solutions Transportation – Auto-Rickshaw • Affordable • Road Conditions (congested roads) • Appropriateness (often used by 1-2 pax only) Diagnostics – Portable Ultrasound • Defeatured version of Japanese design • Clinical excellence at an affordable price • Increased access via portability Look outside for ideas and integrate them with internal technology leading to a new product/solution for a new low-end market Innovative Affordable Solution Around Product Godrej & Boyce Manufacturing, has developed a $70 fridge that runs on batteries, known as “the little cool” Tata Motors has produced a $2,200 car, the Nano. Innovative affordable solutions around ‘Process’ Aravind Eye Hospitals have reduced eye surgery costs by over 80% by applying standardization principles from McDonalds Narayana Hrudayalaya has made open heart surgery affordable (one tenth the cost in western countries!) while maintaining the same standards of reliability 3nethra is a screening device for 5 leading causes of preventable blindness and an algorithm to automatically screen patients; available at one sixth of equivalent devices in the market Exploit the frugal innovation culture to design and launch new products Innovation- in Client’s Process & our Product Outcome in Client’s Process Developing Product • What limits user to make procedure affordable to patient? • Productivity? • Shortage of professionals? • Associated costs like consumables? • Work within Space constraints? • Service supplies bottleneck? • Product meets right need of market? • Technology reducing cost? • Manufacturing ? • New Product ‘speed to market’ • Optimal regulatory pathway? Affordable solution needs open innovation Defining Market Specific Unmet Need If I had asked my customers what they wanted, they would have said a faster horse. - Henry Ford II Clinical observations through immersion • observing not just a specific clinical situation but the entire cycle of care • identifying the problem inherent in that situation / environment • reshaping one’s understanding of the problem into a need Innovation in client’s process- Client Problem Innovative Solution Patient fee/scan low 14hrsX 7days working Need Breakdown fix <4 hrs Fault diagnosis and fix takes 24 hours Built in the product Diagnostics Remote access by Engineer Reaches site with right part Scanner up <4hrs More Doctors buy Innovation in client’s process- Client Problem Innovative Solution CT Scanner cannot fit in space available Suite modification disrupts patient service affects income CT viable @ low patient fee If disruption is reduced From 9 months Work flow design for lower space Installation days at site minimized Medical facility redesign & construction service Changing the way our customers work Customer Delight To Customers We Are In The Business To Help Hospitals Become #1 In Their Business ! Innovation at clinic Market Performance Customer Improvement Clinical Performance Waiting Time Reduction & Operations Performance Building affordable Product around Client viability Client Problem Innovative Solution Cost/scan high due to consumables Consumables like CT Tubes and Ultrasound probes ECG leads from France, USA, Japan Innovative business model with a defence electronic firm in India to produce at 1/4th the cost Building affordable products around client Grew GE 100X in a decade Innovation with Digital Health “Is Apple going to eat medical device companies' lunch?” “Could Digital Health Make Most Medical Devices Obsolete?” What can incumbent medical device companies do to protect themselves against the onslaught of Google, Apple, IBM’s foray into MedTech? 60% India Global 1000 Asia Pacific 40% Europe 500 North America 20% Latin America 0% MENA 0 Social Media Cloud Mobile 2013 2017 SMAC (Social, Media, Cloud, Mobile) have emerged as powerful forces driving businesses yet medical device companies can embrace these trends to create a differentiation Owning the Disease – A New Business Model… …where companies deliver solutions across the care continuum using open innovation Constant patient engagement to communicate insights Preventative health and wellness Diagnostics Therapies Posttreatment processes Chronic disease management Data and analytics leading to key insights from across areas A new paradigm that makes healthcare affordable for self pay markets Questions? 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