COVID-19 is Prompting Medtech to Adapt to a Rapidly Changing World | Deloitte US has been saved
Limited functionality available
by Glenn Snyder, principal, MedTech Practice leader, and Bill Murray, specialist executive, MedTech Practice, Deloitte Consulting LLP
We are still in the early stages of the COVID-19 health emergency, but many medtech companies have already shifted their attention to addressing the immediate needs of the medical community. Some companies, for example, are ramping up production of ventilators, surgical masks, test kits, and other products that are in short supply. Some of them are collaborating with other medtech companies or organizations from outside the sector. Distilleries, cosmetics manufacturers, and even coffee roasters are pitching in to produce hand-sanitizers for first-responders.1,2,3
The medtech community has also been working closely with federal agencies to temporarily ease regulatory hurdles. The US Food and Drug Administration (FDA), for example, has relaxed certain policy guidelines related to the production of ventilators.4 The change means companies that already produce ventilators have more flexibility in the designs and materials they use. It also makes it possible for companies outside of medtech to produce the devices. For example, a medtech company might partner with an automobile-parts manufacturer to come up with a way to produce ventilators.
In early February, FDA authorized the US Centers for Disease Control and Prevention (CDC) to use real-time RT-polymerase chain reaction (rRT-PCR) detection of the virus.5 Companies including Abbott Laboratories and Thermo Fisher Scientific were able to ramp up production.6,7 More recently, FDA used its Emergency Use Authorization (EUA) authority to fast-track rapid point-of-care tests that can detect COVID-19. California-based Cepheid began shipping its tests on March 27—just a week after being approved.9 Mesa Biotech, another California-based molecular diagnostics company, received FDA approval for its test on March 24.10
Six ways medtech could respond, recover, and thrive
While it’s too soon to know how quickly the economy will rebound, we are trying to help our medtech clients understand the various ripple effects that may have the most significant impact on their businesses. Here’s a look at how we think medtech can respond, recover, and thrive:
1. Changes in demand (respond): We are already seeing an impact on elective procedures and the demand for devices used in those procedures. Many hospitals have asked patients to reschedule elective surgeries to help maximize available beds and free up staff to care for infected patients. As a result, some medtech companies have seen a drop in demand for products related to those procedures, such as joint replacements and other implantable devices.11 At the same time, there has been a sometimes overwhelming demand for devices that can help hospitals keep up with a surge of COVID-19 patients. Honeywell, which manufacturers N95 masks, intends to open a new production facility within the next month.12 While tremendous energy and resources are being devoted to the current crisis, companies should also anticipate a return to normal operations at some point. We are likely to see a rebalancing of product consumption. Medtech companies should be agile and ready to respond to a robust demand for services and products once this event subsides.
2. Digital sales, service, and training (recover and thrive): Many life-sustaining and lifesaving medical devices require ongoing technical support—in collaboration with care providers—to deliver optimal care to patients. These products can be highly sophisticated and often require comprehensive training and ongoing certification to ensure appropriate use. Recent restrictions, however, are keeping company representatives out of procedure rooms and care facilities due to concerns about disease transmission.13 While large, high-volume health systems might have an in-house technical staff, smaller facilities tend to rely on their vendors to support their medtech products. To mitigate these issues, medtech companies could turn to digital tools for remote training, education, and technical support. We would urge medtech companies to evaluate all of their processes to identify work that could be virtual. Some of these changes could be temporary, while others might be permanent.
3. Digital clinical tools (recover and thrive): Clinical trials are often a critical step in assessing the safety and efficacy of the most innovative new products. Patient safety concerns related to the virus have caused new enrollments to drop and ongoing follow-up visits to be delayed, which leads to protocol deviations. Digital technology can help mitigate some of these issues by enabling remote follow-up for routine checks. Digital clinical tools—combined with interoperable data, real-world evidence (RWE), and data analytics—could make it easier to monitor the performance of a product through its entire lifecycle.
4. Supply chain (respond and recover): We are seeing shortages of everything from hospital beds to surgical masks. But storing additional supplies and adding redundancies can be expensive. In the future, some medtech companies might help hospitals and health systems use 3D printers to produce some devices or parts on-site. This could help keep the supply chain fluid. Maybe a valve for a broken ventilator could be printed at a hospital rather than having to order directly from the manufacturer. The medtech sector might also be able to help hospitals deal with unanticipated shortages of inpatient beds. Over the past decade, hospitals and health systems have been steadily moving more care to outpatient settings and reducing inpatient beds, according to our recent report on hospital revenue trends. The medtech industry could help develop products and technologies that allow certain inpatient procedures take place in lower-acuity environments—and even in the home.
5. Artificial intelligence (thrive): Twenty years from now, it is possible that always-on sensors will be in us, on us, and around us. The health data collected by these sensors could then be joined with other data sets (e.g., population-health data and environmental data) to generate highly personalized and actionable care insights. These interoperable streams of data will likely be key to the future of health that Deloitte envisions. AI algorithms developed to look at epidemiology and population health helped to flag the novel coronavirus back in December. We expect these algorithms will continue to get smarter and better. AI also could be used to sift through data generated by hundreds of thousands of clinical studies that occur each year. Algorithms can help sift through findings and stitch together patterns that humans might miss. This could give medtech companies more time to prepare and respond.
6. Digital/virtual care (thrive): Many health plan and health system organizations agree the adoption of virtual health/telehealth will be a permanent shift that can help hospitals, health systems, and clinicians make the most effective use of resources and minimize unnecessary exposure of patients and caregivers to diseases. The new normal for patient interactions will likely begin with a digital engagement (this could be an app or other digital tool that can triage a patient via mobile device). If further assistance is needed, the patient might schedule a virtual visit with a clinician. The last type of engagement would be in-person. Medtech companies should position themselves for this shift and consider how they can support digital and virtual care.
Over the past year, we have been discussing our vision for the future of health where we try to envision what the health care and life sciences sectors might look like by the year 2040. The COVID-19 virus isn’t going to change where we think the health sector is headed, but it could accelerate changes. Innovation often happens in unexpected ways once an industry begins to follow an exponential curve.
1. Distillers turn whiskey and gin into hand sanitizer, Wall Street Journal, March 25, 2020
2. Louis Vuitton owner LVMH to make hand sanitizers to fight coronavirus, USA Today, March 18, 2020
3. Local distillery, coffee chain making hand sanitizer for DC government, WTOP News, March 23, 2020
4. Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency, FDA guidance, March 2020
5. FDA Takes Significant Step in Coronavirus Response Efforts, Issues Emergency Use Authorization for the First 2019 Novel Coronavirus Diagnostic, FDA news release, February 4, 2020
6. Abbott Labs to ship 150K coronavirus tests, Seeking Alpha, March 18, 2020
7. Thermo Fisher to produce millions of coronavirus diagnostic tests, STAT, March 14, 2020
8. FDA Provides More Regulatory Relief During Outbreak, Continues to Help Expedite Availability of Diagnostics, FDA news release, March 16, 2020
9. FDA Approves New Rapid Coronavirus Test That Can Give Results In 45 Minutes, Forbes, March 22, 2020
10. San Diego’s Mesa Biotech gets approval for 30-minute coronavirus test, San Diego Union-Tribune, March 25, 2020
11. Canceled surgeries, COVID-19 patients could be 'double whammy' for hospitals, Modern Healthcare, March 16, 2020
12. Honeywell will start making N95 face masks at its Smithfield, R.I., plant, adding 500 jobs, Boston Globe, March 23, 2020
13. Here are the 10 things hospitals are being told to do to prepare for the coronavirus
Glenn leads Deloitte LLP's Medical Technology practice with more than 25 years of experience in medical technology, biotech, and specialty pharmaceuticals. He helps clients grow through organic and inorganic means by entering new geographic markets, and expanding into new product/service areas. Glenn also helps clients improve brand/commercial effectiveness by articulating product economic value, applying innovative pricing, updating the commercial model, and rationalizing distribution networks.