Published on October 8, 2009
INSEAD Alumni Health Care Summit 2009 Bringing Medical Technologies to the World Dr. Karl Schweitzer Vice President Neuromodulation Europe & Central Asia Medtronic International
Medtronic 1949 - 2009 60 Years of Innovation in MedTech > 38,000 employees > 120 countries 29 manufacturing sites > 40 years presence in Europe #1 or #2 position in all markets $ 14.6 billion in Annual Sales $ 5.6 billion in International $ 1.36 billion on R&D
Our Universe: MedTech Industry Continuous Innovation New science, technology, materials, “combination products” Short product lifecycle & investment recovery period ~18-24 months Speed of innovation vs time-to-market (approvals/EBM) % of MDT revenues Price Pressure from products Reimbursement (DRG, etc), HTAs (NICE/UK, HAS/F) introduced in the last 2 years Procurement (Purchasing groups, pan-European tenders) International price referencing 2/3 Highly Competitive Markets High Cost of Doing Business High support and service: training & education, clinical support High distribution, service and maintenance costs, product tracking “Bedside to Bench” Critical interactions with implanters/referrers/physicians: as users, for R&D (inventors/developers), clinical trials, as trainers, etc. Hospital focus/administration
Medtronic: “Bedside to Bench” Solutions for Chronic Diseases ENT Conditions Psychiatric Disorders Structural Heart Disease Movement Disorders Chronic Pain Cardiac Arrhythmia Spinal Conditions Diabetes CardioVascular Disease Incontinence Minimally Invasive & Implantable Devices
Context: Under-used Therapies x Favorable Demographics Demographics Driving 100% International Opportunity 90% • Therapy penetration - low 80% US Penetration 70% Int’l Penetration • Increasing wealth - demand 60% • Urbanization trends - access 50% • Population growth 40% 30% • Ageing populations 20% by 2050: 2 billion > 60 years 10% 380 million > 80 years Pace- Heart Spinal Diabetes Stents ICDs AAA Neuro makers Valves Fusion Pumps
Context: Ageing Population x Increased Wealth Projected Population of the Aged Top Eight Projected 2050 Gross (≥ 65) in Regions of Various Domestic Product (GDP) Regions Development; 1980-2040 In 000’s 1,000 Developed China 44.5 Developing 800 United 35.1 Least Developed States India 27.8 600 Western Europe 12.5 Japan 6.7 400 Brazil 6.0 200 Russia 5.8 South Africa 1.2 1980 2000 2020 2040 -- 10 20 30 40 50 Source: UN Population Division In Trillions of $US Developing Regions Represent Large China and India Markets Will Rival Market Opportunity the U.S. Market in Size Source: IHT
Medtronic: Bringing MedTech to the World China • Evaluate “local” segment opportunities • Larger Footprint through Medtronic - Weigao Joint Venture (Spine) India • Implement unique business models for developing healthcare systems • Drive awareness through clinical and referral programs (Cardiac)
Patient Access Hurdles Need to Be Overcome Efficient Research & Development Parliament & Optimized Clinical Government Relations Trials Public Faster Awareness Budget Pressure Regulatory Review Clinician & Patient Optimal Reimbursement Advocacy & Funding Effective Referring Physician Solutions Product Education Training
Medtronic Carelink: Savings through “Real Time” Diagnosis and Management of Patients • Internet-based service for 41% Savings clinicians & patients using CareLink • Management of cardiac disease 1,400 & diabetes Total cost Yearly cost per patient € 1,200 €1267 • Remote device & physiologic 1,000 monitoring 800 • Clinical data mgmt. & integration Total cost 600 €744 • Worldwide 440,000 patients 400 Productivity gains: 200 - increased clinical productivity - less hospitalizations 0 Usual follow-up CareLink-based - improved medical compliance scheme scheme Innovative MedTech is Part of the Solution
Macroeconomic Implications of Ageing 200% Net Growth/Decline in Working Population 1970-2010 150% 2010-2050 100% 50% 0% -50% Mexico Brazil India China South Australia Canada US Netherlands Spain France UK Russia Italy Japan Germany Korea Source: Deloitte Research, UN Population Division Competitiveness is at Stake for Major Economies - Need for Longer Productive Life! 10
Paradigm Shift in Health Care: from “Cost” to “Value” Health is Wealth ! Thank You
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