MedTech firms encounter the challenge for creating sustainable profitable growth and value for their shareholders, made difficult by ongoing health budget pressure and shifts to value based healthcare. By consequence, they have to change the way they operate by strengthen their growth strategy, commercial positioning and operating model

1. Reinventing the
Commercial Model
Moving beyond traditional
selling, innovating business
models, joining efforts for
better outcomes and adjusting
commercial models &
capabilities to address price
pressures and fundamental
shifts in purchase decision
processes
Date:
November 2015
PwC
Medical Devices &
Technology, Pharma
& Lifesciences
By:
Gert Mariën
Senior Manager

2. PwC Reinventing the commercial model 2
Table of Contents
 Disruptive Healthcare Trends
 Challenges MedTech Industry
 Keys to Commercial Excellence

3. PwC Reinventing the commercial model 3

4. PwC Reinventing the commercial model 4
1 Healthcare Trends
Healthcare is at a critical turning point to sustain
the delivery of affordable, accessible and
qualitative care
In today’s healthcare we’re facing a number of
challenges that impact the access, the quality and
affordability of care. An ageing population and growing
middle class are shifting healthcare needs and
responses. Costly chronic care needs are growing and
exerting considerable demand on health systems.
Healthcare systems around the world are dealing with
depleting resources at a time when demand for
healthcare is rapidly rising. Governments face growing
pressure to reduce costs without impacting quality or
access to care. Consumers are taking advantage of
unprecedented access to information to become more
diligent and informed about their health.
Joint efforts are needed to address this challenge
and hence contribute to improving clinical, health
economic and service outcomes, further together
Addressing these challenges requires a joint effort from
all healthcare players in order to sustain or increase the
quality of care so that populations reach the highest
standards of health, relevant for their well-being and
socio-economic development.
This creates an opportunity for MedTech firms to
support these players.
Exhibit 1 - Healthcare, a balancing act
Exhibit 2 – Joint effort for better outcomes
MedTech
Industry
Industries
Government
Provider
PatientPayor

5. PwC Reinventing the commercial model 5
2 Challenges MedTech industry
Sustaining long term value creation with sufficient
growth and profitability in a new health economy
MedTech companies encounter the challenge for sustainable long term value creation with sufficient
growth and profitability, made difficult by ongoing cost containment measures & shift to value based
healthcare. By consequence, they have to change the way they operate by strengthen their growth
strategy, commercial positioning and operating model.
3 key measures to address these challenges
1. Drive growth in emerging/under penetrated markets and consider M&A’s (corporate strategy).
2. Reinvent the commercial model by innovating business models and strengthen commercial
capabilities (commercial excellence).
3. Reduce operational costs and transform supply chains in value creating profit drivers
(operational excellence).
Exhibit 3 – Strengthening the growth strategy, commercial and operational model for profitable growth

6. PwC Reinventing the commercial model 6
3 Keys to commercial excellence
Traditional commercial models have become costly,
ineffective and put pressure on gross margins
1. Traditional commercial models (clinician selling) do not match with the ongoing shift
of purchase decisions out of the hands of clinicians
By consequence, the average revenue, cost (SG&A) and thus gross margin per revenue generating
employee declines. This relates to the combination of high resource utilization in the wrong
commercials, worsened by low effectiveness.
2. Sophisticated reimbursement & market access decision making processes
3. Price pressure caused by cost containment measures of Governments
MedTech firms need to reinvent their commercial
models and strengthen their commercial
capabilities for obtaining competitive advantage
This maturity model assesses and reveals the key capabilities for creating a successful commercial strategy
and effective capabilities. The model focuses in the first place on market segmentation, strategic priority
setting and creating value based, innovative and competitive value propositions & commercial models. The
model continues by tailoring and strengthening 6 groups of capabilities per model.
Exhibit 4 – Maturity Model Commercial Excellence in MedTech

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Five transformational steps to commercial
excellence for creating a competitive advantage
As a result of the maturity assessment, typically 5 transformational steps are taken to bridge the gap to
improving commercial capabilities. The exact content and intensity of the steps depend from the
commercial maturity and improvement opportunities detected.
Step 1 Decide where to play (regional level)
- Market Segmentation, Opportunity Sizing, Feasibility Assessment
- Strategic Priority Setting
- Commercial Strategy (Go To Market per Segment)
Step 2 Decide how to win
- Articulate clear, competitive, value creating propositions per prioritized segment
- Reveal key success factors
Step 3 Tailor the commercial model and strengthen the commercial capabilities
- Define how to go to the market per country, county and therapy segment
- Develop and deploy the right capabilities per model
Step 4 Transform, Create Value
- Bridge the commercial maturity gap
- In parallel, create value for your clients, your company and your stakeholders
- Accelerate and manage the change
Step 5 Set objectives, measure Progression and Performances
- Set objectives, related to performance and progression
- Monitor progression and performance
- Intervene proactively and coordinate the course forward

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Key Success Factors for bridging the gap towards
improving commercial excellence
Obviously, there’s no one unique solution for improving the commercial model, but based on experience
and validation with clients, the transformational steps and below success factors will certainly bring you
forward in an effective way.
1 Go beyond traditional selling and build innovative solutions
2 Strategically prioritize market segments in a pragmatic way on a
regional level, x-business and x-country
3 Articulate competitive, outcome driven value propositions per segment
4 Tailor commercial models per segment per country to address local
decision processes
5 Install and develop the right commercial capabilities per models
6 Reveal the success factors to win per commercial model and decipher
the exact drivers and needs of all stakeholders
7 Develop value creating services, covering the care continuum
8 Structurally generate cost and clinical evidence for clinical trial,
reimbursement, early access and marketing purposes
9 Pursue strategic partnerships with key accounts for long term value
creation for all stakeholders
10 Focus on outcome bases selling and marketing

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Gert Mariën
PwC | Senior Manager
Direct: +32 2 7104485 | Mobile: +32 491 167884
Email: gert.marien@be.pwc.com
PwC Enterprise Advisory cvba/scrl