The spread of Coronavirus has had a clear and substantial effect on the economy and many businesses. Companies have been forced to adapt in a way that they never anticipated. As a result, many leaders and executives might feel as though they are guiding their companies through a long, dark path without a clear end or exit. Medical device companies are finding themselves in a precarious yet vital position within the healthcare industry.
While a small percentage of the products that they offer have become vital and highly sought after, the vast majority of their devices are seeing meager sales or cannot be sold at all. On top of this, the typical sales channels that medical representatives rely on have been narrowed to protect against the spread of the virus. All of these factors are compounding to create dynamic challenges for medical device manufacturers, requiring these organizations to employ virtual sales enablement tools to move forward and continue growing and generating revenue.
Many medical device manufacturers are facing significant hardships as a direct result of hospitals that are inundated with Covid-19. Since elective procedures have been delayed to help health systems deal with the challenges presented by Covid-19, medical device companies have lost one of their largest sources of income (Freeman, 2020). Around 10% of the products that are offered by manufacturers have seen increases in demand as a result of Covid-19, but most are seeing notably lower sales (Whooley, 2020). Many healthcare companies might not have seen a large drop in revenue yet, but are preparing for a future dropoff as the economy appears to be headed for a major recession. What is clear is that the financial impact of the pandemic is unknown, but will almost certainly be negative for the majority of medical device manufacturers.
The uncertainty that permeates throughout most of the business world has been seen with medical device manufacturers. Many of the largest companies within the field have opted to reduce or withdraw the guidance that they had been providing for their earnings in 2020 (Pedersen, 2020). Many of these organizations have also been furloughing their employees in an effort to save money immediately. The unpredictable nature of Covid-19 has forced companies to adapt and become more flexible.
Hospitals & Supply Chain
For hospitals, the impact of Covid-19 will be felt not only by the staff working on the front lines, but also by value analysis and supply chain teams, who’s roles will likely shift. One major implication for these teams is that they have been focused almost entirely on securing the necessary supplies to deal with the pandemic. There are estimates that the demand for personal protective equipment (PPE) has risen by 1700% (Dobryzkowski, 2020). Focused on securing products to fight Covid-19, healthcare supply chain teams may not be aware of the latest products from medical device manufacturers. This could cause issues as life and work return to normal and teams are unaware of what improvements and safety features have been added to products or what new products have been developed.
Another adjustment that value analysis and supply chain teams have had to make is working with the new emergency use authorization (EUA) standards that have been put into place to combat Covid-19. The EUA has loosened restrictions on the manufacturing of products and their use in hospitals. Hospital supply chain teams need to be privy to these changes and ready to utilize them when working to prepare their hospitals and health systems for Covid-19. Supply chain teams will also need to be prepared to change everything back after the EUA is rescinded.
After the pandemic subsides, one of the earliest major developments that these medical representatives, value analysis teams, and supply chain teams may face is the continued restrictions on hospital access. Medical representatives might not have the same level of access that they did previously. This access has been reduced in the past decade, therefore it would make sense that hospitals would continue to increase restrictions to keep patients safe. A medical representative trying to sell his products to a hospital must pass a value analysis committee as they have become a standard in the industry (Hristova-Neeley, 2015). There are also more vendor credentialing services now than ever. In this pandemic, these have been used to limit device representatives’ access to hospitals. Hospitals are likely to continue this trend, and the policies put into place to stop the spread of Covid-19 may be the final step to creating a nearly entirely virtual marketplace for medical devices and pharmaceuticals.
Digital Procurement Requirements
The pandemic, combined with the recent rise of value analysis teams, will push hospitals’ procurement processes towards digitization. The traditional methods of medical representatives meeting with physicians and selling them a device directly are no longer feasible. In a post Covid-19 environment, it is reasonable to expect that hospitals will be more protective of access to their hospitals, resulting in hospitals attempting to buy a product in bulk after it has cleared the value analysis process.
Tools such as GreenLight’s Product Research Library and Rep Connect are invaluable to both hospitals and medical device manufacturers because they enable them to buy and sell medical products.. By utilizing the Product Research Library, hospital users on value analysis or supply chain teams will be able to quickly assess the clinical data, safety, and financial factors of many products. They can also see what representatives to contact about purchasing products through the new Rep Connect feature. These two features, in tandem, will push the procurement process of medical devices in an entirely new, digital direction.
It should be expected that the future holds a new normal after the Covid-19 crisis has ended. In the case of medical devices, it is clear that hospitals will likely move towards increased restrictions on hospital access, as well as digitization of the procurement process. These changes began before the onset of the pandemic, but they have likely gotten the final push they needed to become staples of the industry. Medical device companies and representatives should adapt to these developments to best support those working in healthcare supply chain.
Dobrzykowski, D. (2020, April 17). COVID-19’s Unique Impact on Healthcare Supply Chains. Retrieved from https://walton.uark.edu/insights/covid-healthcare-supply-chains.php
Freeman, T. (2020, April 1). COVID-19’s Impact On The Medical Device Supply Chain. Retrieved from https://www.mpo-mag.com/issues/2020-04-01/view_columns/covid-19s-impact-on-the-medical-device-supply-chain/
Hristova-Neeley, D., Armstrong, S., Garfield, S., & Ertel, D. (2015). The rise of the value analysis committee at Us Hospitals, better or worse for medical device companies? Value in Health, 18(3), A49–A50. https://doi.org/10.1016/j.jval.2015.03.292
Pedersen, A. (2020, April 6). More Medical Device Businesses Impacted by COVID-19. Retrieved from https://www.mddionline.com/more-medical-device-businesses-impacted-covid-19
Whooley, S. (2020, April 22). Medtronic reveals steep COVID-19 financial impact. Retrieved from https://www.massdevice.com/medtronic-reveals-steep-covid-19-financial-impact/