Resetting the Vision for Medical Devices: How You and Your Company Can Thrive in the Emerging Global Healthcare Market - Tom Loarie, Mercator MedSystems

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Tom Loarie, Mercator MedSystems - Speaker at the marcus evans Medical Device Manufacturing Summit Spring 2012, held in Las Vegas, NV, delivered his presentation entitled Resetting the Vision for …

Tom Loarie, Mercator MedSystems - Speaker at the marcus evans Medical Device Manufacturing Summit Spring 2012, held in Las Vegas, NV, delivered his presentation entitled Resetting the Vision for Medical Devices: How You and Your Company Can Thrive in the Emerging Global Healthcare Market

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  • 1. www.MercatorMed.com
  • 2. Globalization of theMedical Technology Industry gy y 2012 Medical Device Manufacturing and R&D SummitThomas M. Loarie, Executive Chairman Mercator MedSystems, Inc.
  • 3. Shifting Priorities 3 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 4. 4 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 5. Career Events 1968-2012 •Drug Device AHSC •Division President Di iti •Diagnositics •eHealth •Sales/Mktg •Ventures •IPO R&D •R&D •Financial Mkts •China 1960 1970 1980 1990 2000 2010 Honeywell International •ADVAMED Mfg Engineer •Manufacturing •Govt Policy g •Logistics
  • 6. Key Events in MedTech 1960-2012Cuts in Funding to AeroDefense •Health Reform •ACOs •M&A Hospitals •TEFRA •Kessler FDA •DRGs M&A •M&A •FDA A t FDA Act i •Segmentation •Marketing Globalization 1960 1970 1980 1990 2000 2010 •The Great Social •GoldStandard Recession Security •Emergence of •FDA Modernization Act •Implosion of Act of Multi-National Multi National •CMS takes front seat CMS Venture Capital 1965
  • 7. Key Events 1960-2012 •For Profit HospitalsHouse Calls Hospital •HMOs •Segmentation •Doc in the Box Hospitals •Hospitals M&A 1960 1970 1980 1990 2000 2010
  • 8. 8 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 9. Economics and Global Politics • Security • Prosperity • Values 9 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 10. Geopolitical Center is Shifting to IndianOcean from Atlantic
  • 11. The Global Middle Class is Booming P. 13
  • 12. World Population Ageing 1950-2050 14 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 13. China P. 16
  • 14. 17 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 15. Frugal Innovation 18 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 16. Lessons for Medtech• 2.5% vs. 20-30% market growthGraying of great powers (Butter not guns)• Will parents want one child to be in military? (China)• Healthcare spending on the rise globally• Skilled labor flows• Implications – Treatment guidelines – Reference pricing 20 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 17. Lessons for Medtech• Low Cost Chinese Competition is Coming• Growth in Asia is just beginning• Markets are untapped• This will be the growth market for next 20 years• Numerous Local players with cost advantages • Stent Market shifted over night • Multinationals went from >70% to <30% • L Lepu, Mi Microport, Bi t Biosensors all winning ll i i• These players are not as rational about price 21 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 18. Lessons for Medtech• Also taking share in Europe • Mi d Mindray • Kung Hui• They will compete here• Multinationals still struggling with business model - hi h cost and hi h margin model high t d high i d l 22 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 19. So what to Do• Change creates great opportunity• Affordability matters now more than ever – Focus on Value • Healthcare purchase decisions now driven by value • Better care or physician profit is simply not enough • Fee for service model is coming to a close • Hospital managers have more say than physician employees • Hospital value analysis committees rule the day• Make sure you develop cost effectively – Focus on Capital Efficiency • Healthcare venture has veered off course • Funds grew large • Led to complex investments with greater capital and risk • Though exciting ideas, time & money required high exit valuations • With lower valuations, purchase prices are generally l l l ti h i ll lower • Capital efficiency provides optionality P. 23
  • 20. Healthcare Reform
  • 21. 25 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 22. Coordination of CareNew Y k HN York Hospitals L k t C it l Look to Combine, F bi Forming a Giant i Gi t 27 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 23. New Point of Access
  • 24. Lessons for Medtech• Physician eTools• Coordinated Care• Home Health• Sensors• Data
  • 25. The U.S. Advantage• High education• High technology High reward• High reward• Country of Laws 32 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 26. Soft Power - Education• U.S. is #1 educational power in world• 17 of top 20 Universities in world are in U.S. – Exceptions are Oxford, Cambridge, Univ of Tokyo• Of top 500 t – U.S. = 154 – Germany = 39 – UK = 38 – China = 23 33 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012
  • 27. Innovation
  • 28. The U.S. Advantage• Labor advantage• Globally competitive – Goldman Sachs 25,000 (13,100 U.S.) – A l 60 400 Apple 60,400 – Microsoft 90,412• America is ethnically blind – Google’s Sergy Brin – Univ of Chicago s Prof Ruoboni Chicago’s 36 | © 2012 Mercator MedSystems | All Rights Reserved | 5/15/2012