Where will medicine be in 2035?

An important determinant of “where medicine will be” in 2035 is the set of dynamics and forces behind healthcare delivery systems, including primarily the payment method, especially regarding reimbursement. It is clear that some form of reform in healthcare will result in a consolidation of the infrastructure paying for and managing patient populations. The infrastructure is bloated and expensive, unnecessarily adding to costs that neither the federal government nor individuals can sustain. This is not to say that I predict movement to a single payer system — that is just one perceived solution to the problem. There are far too many costs in healthcare that offer no benefits in terms of quality; indeed, such costs are a true impediment to quality. Funds that go to infrastructure (insurance companies and other intermediaries) and the demands they put on healthcare delivery work directly against quality of care. So, in the U.S., whether Obamacare persists (most likely) or is replaced with a single payer system, state administered healthcare (exchanges) or some other as-yet-unidentified form, there will be change in how healthcare is delivered from a cost/management perspective. 

From the clinical practice and technology side, there will be enormous changes to healthcare. Here are examples of what I see from tracking trends in clinical practice and medical technology development:

  • Cancer 5 year survival rates will, for many cancers, be well over 90%. Cancer will largely be transformed in most cases to chronic disease that can be effectively managed by surgery, immunology, chemotherapy and other interventions. Cancer and genomics, in particular, has been a lucrative study (see The Cancer Genome Atlas). Immunotherapy developments are also expected to be part of many oncology solutions. Cancer has been a tenacious foe, and remains one we will be fighting for a long time, but the fight will have changed from virtually incapacitating the patient to following protocols that keep cancer in check, if not cure/prevent it. 
  • Diabetes Type 1 (juvenile onset) will be managed in most patients by an “artificial pancreas”, a closed loop glucometer and insulin pump that will self-regulate blood glucose levels. OR, stem cell or other cell therapies may well achieve success in restoring normal insulin production and glucose metabolism in Type 1 patients. The odds are better that a practical, affordable artificial pancreas will developed than stem or other cell therapy, but both technologies are moving aggressively and will gain dramatic successes within 20 years.

Developments in the field of the “artificial pancreas” have recently gathered considerable pace, such that, by 2035, type 1 blood glucose management may be no more onerous than a house thermostat due to the sophistication and ease-of-use made possible with the closed loop, biofeedback capabilities of the integrated glucometer, insulin pump and the algorithms that drive it, but that will not be the end of the development of better options for type 1 diabetics. Cell therapy for type 1 diabetes, which may be readily achieved by one or more of a wide variety of cellular approaches and product forms (including cell/device hybrids) may well have progressed by 2035 to become another viable alternative for type 1 diabetics.

  • Diabetes Type 2 (adult onset) will be a significant problem governed by different dynamics than Type 1. A large body of evidence will exist that shows dramatically reduced incidence of Type 2 associated with obesity management (gastric bypass, satiety drugs, etc.) that will mitigate the growing prevalence of Type 2, but research into pharmacologic or other therapies may at best achieve only modest advances. The problem will reside in the complexity of different Type 2 manifestation, the late onset of the condition in patients who are resistant to the necessary changes in lifestyle and the global epidemic that will challenge dissemination of new technologies and clinical practices to third world populations.

Despite increasing levels of attention being raised to the burden of type 2 worldwide, including all its sequellae (vascular, retinal, kidney and other diseases), the pace of growth globally in type 2 is still such that it will represent a problem and target for pharma, biotech, medical device, and other disciplines.

  • Cell therapy and tissue engineering will offer an enormous number of solutions for conditions currently treated inadequately, if at all. Below is an illustration of the range of applications currently available or in development, a list that will expand (along with successes in each) over the next 20 years.

    Cell therapy will have deeply penetrated virtually every medical specialty by 2035. Most advanced will be those that target less complex tissues: bone, muscle, skin, and select internal organ tissues (e.g., bioengineered bladder, others). However, development will have also followed the money. Currently, development and use of conventional technologies in areas like cardiology, vascular, and neurology entails high expenditure that creates enormous investment incentive that will drive steady development of cell therapy and tissue engineering over the next 20 years, with the goal of better, long-term and/or less costly solutions.
  • Gene therapy will be an option for a majority of genetically-based diseases (especially inherited diseases) and will offer clinical options for non-inherited conditions. Advances in the analysis of inheritance and expression of genes will also enable advanced interventions to either ameliorate or actually preempt the onset of genetic disease.

    As the human genome is the engineering plans for the human body, it is a potential mother lode for the future of medicine, but it remains a complex set of plans to elucidate and exploit for the development of therapies. While genetically-based diseases may readily be addressed by gene therapies in 2035, the host of other diseases that do not have obvious genetic components will resist giving up easy gene therapy solutions. Then again, within 20 years a number of reasonable advances in understanding and intervention could open the gate to widespread “gene therapy” (in some sense) for a breadth of diseases and conditions –> Case in point, the recent emergence of the gene-editing technology, CRISPR, has set the stage for practical applications to correct genetically-based conditions.
  • Drug development will be dramatically more sophisticated, reducing the development time and cost while resulting in drugs that are far more clinically effective (and less prone to side effects). This arises from drug candidates being evaluated via distributed processing systems (or quantum computer systems) that can predict efficacy and side effect without need of expensive and exhaustive animal or human testing.The development of effective drugs will have been accelerated by both modeling systems and increases in our understanding of disease and trauma, including pharmacogenomics to predict drug response. It may not as readily follow that the costs will be reduced, something that may only happen as a result of policy decisions.
  • Most surgical procedures will achieve the ability to be virtually non-invasive. Natural orifice transluminal endoscopic surgery (NOTES) will enable highly sophisticated surgery without ever making an abdominal or other (external) incision. Technologies like “gamma knife” and similar will have the ability to destroy tumors or ablate pathological tissue via completely external, energy-based systems.

    By 2035, technologies such as these will measurably reduce inpatient stays, on a per capita basis, since a significant reason for overnight stays is the trauma requiring recovery, and eliminating trauma is a major goal and advantage of minimally invasive technologies (e.g., especially the NOTES technology platform). A wide range of other technologies (e.g., gamma knife, minimally invasive surgery/intervention, etc.) across multiple categories (device, biotech, pharma) will also have emerged and succeeded in the market by producing therapeutic benefit while minimizing or eliminating collateral damage.

Information technology will radically improve patient management. Very sophisticated electronic patient records will dramatically improve patient care via reduction of contraindications, predictive systems to proactively manage disease and disease risk, and greatly improve the decision-making of physicians tasked with diagnosing and treating patients.There are few technical hurdles to the advancement of information technology in medicine, but even in 2035, infotech is very likely to still be facing real hurdles in its use as a result of the reluctance in healthcare to give up legacy systems and the inertia against change, despite the benefits.

  • Personalized medicine. Perfect matches between a condition and its treatment are the goal of personalized medicine, since patient-to-patient variation can reduce the efficacy of off-the-shelf treatment. The thinking behind gender-specific joint replacement has led to custom-printed 3D implants. The use of personalized medicine will also be manifested by testing to reveal potential emerging diseases or conditions, whose symptoms may be ameliorated or prevented by intervention before onset.
  • Systems biology will underlie the biology of most future medical advances in the next 20 years. Systems biology is a discipline focused on an integrated understanding of cell biology, physiology, genetics, chemistry, and a wide range of other individual medical and scientific disciplines. It represents an implicit recognition of an organism as an embodiment of multiple, interdependent organ systems and its processes, such that both pathology and wellness are understood from the perspective of the sum total of both the problem and the impact of possible solutions.This orientation will be intrinsic to the development of medical technologies, and will increasingly be represented by clinical trials that throw a much wider and longer-term net around relevant data, staff expertise encompassing more medical/scientific disciplines, and unforeseen solutions that present themselves as a result of this approach.Other technologies being developed aggressively now will have an impact over the next twenty years, including medical/surgical robots (or even biobots), neurotechnologies to diagnose, monitor, and treat a wide range of conditions (e.g., spinal cord injury, Alzheimer’s, Parkinson’s etc.).

The breadth and depth of advances in medicine over the next 20 years will be extraordinary, since many doors have been recently opened as a result of advances in genetics, cell biology, materials science, systems biology and others — with the collective advances further stimulating both learning and new product development. 

See the 2016 report #290, “Worldwide Markets for Medical and Surgical Sealants, Glues, and Hemostats, 2015-2022.”

Three Key Forces Behind Startups and Investment in Medical Technology

We see three key forces underlying investment trends in medical technology:

  • The spectrum of competition has been broadened and sometimes isn’t even obvious.

Widely different technologies (as in treatment of coronary artery disease, see white paper) can address a clinical condition, with the solution to the problem being the focus of new investment.

New materials for devices, drug-device hybrids, biotech-driven solutions, and other innovations can create competition between very different technologies. As a result, the paradigms and truths that held true in the past, when devices only went head-to-head with devices, are no longer relevant, creating the need to better assess the competitive landscape.

Manufacturers must there develop good market awareness, as in being cognizant of all the potential source of competition, such as from companies in adjacent markets who might pivot and seize market share.

  • Money flows to niches in medtech where the demand for clinical utility is high.

The biggest forces driving medtech are increasing patient populations or the cost of managing them. Niches that address the challenges of an older population with unsolved painful and or costly conditions (orthopedics, chronic wounds, diabetes, bariatrics) have prominent cost targets that stimulate investment.

Patient demographics, healthcare cost/utility demands and other forces make some medtech niches very attractive, even if only as a result of technology migration (e.g., to growth geo markets).

  • Underserved patient populations command almost as much attention as the untapped patient populations.

There is much potential return on investment to be made in blockbuster treatments, but these can be financial sinkholes compared to less grandiose technology solutions. A motive force exists in medtech, centered around healthcare costs, that is relentlessly forcing medical technology innovators to find opportunity within existing markets, by eliminating cost (e.g., shifting care to outpatient as via minimally invasive technologies). Significant medical technology investment has already recognized the value in targeting conditions for which new technology, new clinical practices and/or simply new ways of thinking can improve the quality of life, patient costs or both.

Medtech investment is most serious when it is (1) in high dollar value, or (2) tied to the formation of companies. It reflects confidence in that sector to the degree set by the investment.

In the past five years, MedMarket Diligence has tracked the identification of over 600 companies in medtech. Below is the distribution of their focus across a large number of clinical and technology areas (multiple possible, as in “minimally invasive” and “orthomusculoskeletal”).

These companies have also been tracked through their specific investments (detailed historically at link).

Source: MedMarket Diligence, LLC; Medtech Startups Database.

Cardiology, orthopedics, and surgery are mainstay drivers of new technology development in medtech, as has been the push for minimally invasive therapies, but nanotechnology, interventional (e.g., transcatheter) technologies, biomaterials, wound management and other niches have a steady stream of new company formations.

See recent reports from MedMarket Diligence in the following clinical areas.

Medtech Fundings for October 2015

Medtech fundings for October 2015 totaled $618 million, led by the $150 million Series B funding of Humacyte, followed by the $75 million IPO filed by Eclipse Technologies, the $57 million funding of Silk Road Medical, and the  $52 million Series A funding of Decibel Therapeutics.

Below (with the full list at link) are the top fundings for the month.

Source: MedMarket Diligence, LLC

For the complete list of medtech fundings in October 2015, see link.

For a historical list of the individual fundings in medtech, by month, since 2009, see link.

Double-digit sales growth rates in spine surgery products

In many Western markets, spine surgery represents a mature market, with significant penetration of potential patients and caseload. Manufacturers have been able to produce innovations that have been able to command respectable premiums for a long time, and while they still represent some of the strongest growth rates in medical technology, overall revenue growth rates in spine surgery have been squeezed by procedure limitations and pressure on pricing.

Not so much the case in Asia/Pacific, Central/Latin America, and markets elsewhere in the world, where double digit spine surgery growth rates are the evident now, and will continue for the near future.

Below is illustrated the top growth (2014-2021) combinations of technologies and regional markets in spine surgery, in descending order.

Screen Shot 2015-10-06 at 11.10.30 AM

Source: MedMarket Diligence, LLC; Report #M540.

Wound Sealing and Closure Markets by Country: Germany and United Kingdom

(Note: See the August 2016 Report #S290.)

Population differences represent a major difference between countries in the relative demand for medical products, but there remain many other differences in drivers and limiters of sales.

The markets for wound closure encompassing sutures & staples, vascular closure devices, surgical hemostats, surgical tapes, and surgical sealants & glues show distinct sensitivities country-by-country as a result of differences in:

  • Practice patterns
  • Cultural differences in perception of “wounds”
  • Reimbursement
  • Regulatory
  • Perception of new technology
  • Economics

For example, the two graphics below illustrate the wound closure markets in Germany and the United Kingdom. To have fully compared the markets in these two countries aside from differences in population, we might have presented per capita values in the sales, but even without doing so it is clear that relative sizes and growth rates in the two countries are sufficiently different to warrant attention in local efforts to market these products.

Screen Shot 2015-10-06 at 8.13.22 AM

Source: “Worldwide Surgical Sealants, Glues, and Wound Closure Markets, 2013-2018”, Report #S192; published by MedMarket Diligence, LLC. (Note: This report has been superceded by the August 2016 Report #S290.)

Medtech: Numbers and Size of Fundings, Jan-Aug 2015

Fundings in medtech in 2015 follow a common pattern in that most fundings are between $1 million and $5 million — in 2015 thus far, we have identified 111 separate fundings in the $1M-$5M range — with the aggregate value of all fundings in this range being $286 million. However, the size category with the highest cumulative fundings is fundings at $25 million to $50 million, of which there were 41 separate fundings, reflecting an aggregate of $1.36 billion.

Screen Shot 2015-08-30 at 9.34.47 AM

Source: MedMarket Diligence, LLC; see specifics in August 2015 fundings and historical fundings.

By comparison, below is the graph of numbers and totals of fundings for the same period in 2014.

Screen Shot 2015-08-30 at 9.37.25 AM

Source: MedMarket Diligence, LLC

Medtech succeeds by responding to multiple demands

Medtech is resilient, adapting to the changing demands of patients, payers, regulators, and the economy, but only in the hands of the innovators who keep a finger in the wind on these demands.

  1. Comprehensive outcomes versus symptomatic intervention. Competition in medtech, heightened by cost pressures in particular, is characterized by the demand for comprehensive solutions to disease/trauma rather than technologies that simply ameliorate symptoms. Manufacturers are focusing on longer term solutions, competing against the full spectrum of therapeutic alternatives rather than incremental improvements in their widgets.
  2. Whatever the cost, make it lower. Cost is poorly understood in healthcare (hence the problem!), but it is recognized as important simply by the rate at which premiums increase, the percentage of GDP adding to healthcare spending, the cost of Medicare and other similar benchmarks. Cost is difficult to assess in medical technologies, because there are long term, unforeseen implications of nearly every medtech development. Nonetheless, the manufacturer who does not only bow down in homage to cost but also makes cost at least an implicit part of its value proposition will be quickly put out of business.
  3. The life spans of “gold standards” of treatment are getting shorter and shorter. Technology solutions are being developed, from different scientific disciplines, at such a pace as to quickly establish themselves, in a broad enough consensus, as new gold standards. Physicians are increasingly compelled to accept these new new standards or find their caseload shifting to those who do.
  4. Many manufacturers strive for being able to claim their products are “disruptive” — overturning existing paradigms. However, few medtech manufacturers really ever achieve anything more than marginal improvements. Note the relative amount of 510Ks versus PMAs in regulatory approvals (not that a PMA denotes a “disruptive” development).
  5. Materials technologies are defining what is a “device” as well as what they can accomplish. Competitive manufacturers are aggressively gaining a broad understanding of materials technologies to encompass traditional device, pharma, biopharma, biotech, cell biology and others, ensuring their success from a broadly competitive position.
  6. Interest in startup innovations by VCs and large-cap medtech companies has never been more intense, but funding still demands concrete milestones. Proof-of-concept gets entrepreneurs excited, but 510(K) or better is what gets the money flowing. This is not the credit-crunch of 2008, when the sour economy caused funding to largely dry up. Money is indeed flowing into medtech now, as evidenced by the IPO market and the volume of early stage funding, but potential investments — especially at very early stages — are no less intensively vetted. Startups must therefore carry the risk well into the development timeline, when the prospect of their products reaching the market has been demonstrated far more effectively.
  7. Medtech markets are influenced by many forces, but none more strongly than the drive of companies to succeed. Reimbursement. Regulatory hurdles. Healthcare reform. Cost reduction, even a 2.3% medical device excise tax, et cetera, et cetera. None of these hold sway over innovation and entrepreneurship. And the rate of innovation is accelerating, further insulating medtech against adverse policy decisions. Moreover, that innovation is reaching a sort of critical mass in which the convergence of different scientific disciplines — materials technology, cell biology, biotech, pharma and others — is leading to solutions that stand as formidable buttresses against market limiters.
  8. Information technology is having, and will have, profound effects on medical technology development. The manufacturers who “get” this will always gain an advantage. This happens in ways too numerous to mention in full, but worth noting are: drug and device modeling/testing systems, meta-analysis of clinical research, information technology embedded in implants (“smart” devices), and microprocessor-controlled biofeedback systems (e.g., glucose monitoring and insulin delivery). The information dimension of virtually every medtech innovation must be considered by manufacturers, given its potential to affect the cost/value of those innovations.

This is not a comprehensive list of drivers/limiters in medtech, but these stand behind the success or failure of many, many companies.

Patrick Driscoll is an industry analyst and publisher of content on advanced medtech markets through MedMarket Diligence.

Surgical Sealants: Advanced Technologies in Well Developed Markets

Advanced technologies are frequently developed in well developed economies, then migrate to other economies over time. Consequently, relatively new technologies tend to be more dominant in the well developed economies while relatively old technologies tend to be more dominant in the developing economies.

Case in point, surgical sealants for wound management versus surgical tapes, the former relatively new (and advanced) and the latter relatively old.

Screen Shot 2015-03-21 at 12.45.52 PM

Source: MedMarket Diligence, LLC; Report #S192

Advanced and basic wound closure markets in contrast globally

In a prior post, I noted the migration of advanced technologies from countries/regions with well developed medical technology markets (U.S., Europe, Japan) to countries/regions such as China, which have large economies but relatively undeveloped markets for these technologies.

To elaborate on that, one of the more advanced technologies in wound closure is for the devices used in vascular closure, represented in the majority of cases by those used for closure of femoral artery puncture following diagnostic and interventional catheterization procedures. By contrast, perhaps the most basic wound closure technology is surgical tapes.

Diagnostic and therapeutic catheterizations are advanced procedures designed to reveal and treat vascular pathologies, respectively, and require access to the vasculature through a femoral artery. Following the procedure, the prompt and effective closure of the femoral puncture is critical, given the size of the artery and the potential for its inadequate closure leading to rapid blood loss and death. The overall procedure comprises advanced technology in the catheterization and the closure that is therefore relatively common in advanced economies, such as the U.S., Europe and Japan, and relatively scarce or non-existent in markets, such as China.

By contrast, surgical tapes are the simplest form of wound closure with minimal technology. However, the caseload for use of surgical tapes is enormous, given the incidence of simple lacerations that can be addressed through surgical tapes. Given advanced alternatives to closure (sealants, glues, hemostats, etc.) in the U.S., Europe and Japan, surgical tapes have considerably lower demand than in China.

The contrast is illustrated in the two forecast graphs of global sales of surgical tapes and vascular closure devices.

Screen Shot 2014-11-24 at 8.36.49 AM

Source: Report #S192, “Worldwide Surgical Sealants, Glues, and Wound Closure Markets, 2013-2018”; MedMarket Diligence, LLC.

Screen Shot 2014-11-24 at 8.36.30 AM
Source: Report #S192; MedMarket Diligence, LLC.


Rising and fading technologies in the global market for wound closure

Technologies emerge, gain clinical acceptance, grow in caseload and become the standard of care. Then new technologies emerge, developed to improve on or eclipse established technologies. They gain acceptance and the cycle continues.

The pace of technology and market development in the products used in wound closure — sealants, glues, hemostats, sutures/staples, tape, and vascular closure devices — follow this path as characteristically as any medtech market. However, the pace of adoption varies both by technology type and geographic location. Consequently, there is a pretty wide range of compound annual growth rates in the sales of these product globally, regionally and by country.

Below illustrates the highest growth segment-geography combinations in the wound closure market. This frequently illustrates that novel technologies more rapidly penetrate well developed economies, which can sustain the initial high premium pricing of novel technologies, then progressively migrate to less well developed economies.  (For the sake of direct comparison, the high and low growth graphics are shown on the same scale.)

High Growth Segment-Geographies in Wound Closure

Screen Shot 2014-10-23 at 2.07.43 PMSource: MedMarket Diligence, LLC; Report #S192.

Low Growth Segment-Geographies in Wound Closure

Screen Shot 2014-10-23 at 2.07.52 PMSource: MedMarket Diligence, LLC; Report #S192.