It will take more than a Band-aid to fix the medical device market. This was the message delivered by Alex Gorsky, future Johnson & Johnson CEO, to an auditorium full of students and entrepreneurs at the Stanford Biodesign From the Innovator's Workbench event last week.
Gorsky, who in a few weeks will take the helm of the world's largest health-care corporation, discussed challenges and opportunities in medical device market, as his company navigates through a turbulent world economy and a string of product recalls.
"It's a difficult market," he said. "The days of incremental innovation are over."
And, while Gorsky thinks population growth will drive up worldwide demand for health care, it's unclear who will pay for it.
Gorsky sees a fundamental shift in the way medical devices are purchased, which may change the innovator's design approach. In the United States, buying decisions will shift from surgeons to cost-conscious hospital buyers. And that may create demand for keep-it-simple medical devices - designs that provide 50 percent of the bells-and-whistles of current devices for 15 percent of the cost. In addition, he cited the need for more clinical information on efficacy and safety, to help hospital administrators justify medical device purchases.
As the U.S. struggles to stem rising health care costs, his company will look to emerging markets - especially China - for growth. He predicts that these health care markets will grow at 4 to 5 times the rate of the domestic market.
He also sees opportunity in products that combine medical devices with pharmaceuticals, such as test strips, wound closures and drug delivery pumps. And he's optimistic about the trauma market, which includes sports medicine, orthopedics, and surgical devices.
Finally, Gorsky recognizes that big leaps in medical technology are easier said than done in the current economic climate. As venture capitalists flee capital-intensive, long-lead medtech markets, he acknowledged that companies with broad product portfolios will need to be more proactive about early stage start-up acquisitions and university technology transfers to fill their product pipelines.
See Stanford Biodesign's Innovator's Workbench website to register for future biomedical leader events, or to watch videos of past interviews.
Photo by Kris Newby