BY SEAN FENSKE | EDITOR-IN-CHIEF
While M&A is alive and well within the medical device OEM space,
that strategy seems to be spilling over
to the supply chain. In the interest of
cutting costs, companies are seeking
ways to become a one-stop-shop for
the medtech customer. They are expanding capabilities to cover the entire
production process. While this could be
achieved through an expansion of services, it seems more often lately, strategic
acquisitions are the preferred method for
accomplishing this goal.
In the cases where a merger is not likely
to happen, suppliers are collaborating to
provide complimentary services, fulfilling multiple needs with “one stop” for the
medical device OEM.
So you might ask, “What’s the problem?” And that question, unfortunately
does not have a perfect answer. Because
at the heart of these deals, I agree that
they can offer tremendous advantage to
an OEM. These companies are experts
in what they are doing and as such, can
truly offer critical insight into the development process. Combine this trend
with the medical device OEM’s interest
in consolidating their own supply chain
and you may begin to see where the
problem could lie.
One of the criticisms of medical device
OEM M&A is that too much of it eliminates
competition and could result in less innovation for a particular technology. The same
criticism could be true of the supply chain. If
a company becomes the preeminent “go-to”
resource for a certain technology, do they
lose some motivation to innovate and make
their offering better? If they’re unable to grow
market share for their technology, what
incentive is there to improve it?
Fortunately, I don’t think there’s any
portion of the medical device development
supply chain that is even close to having
this become a significant concern. However, it’s certainly something to keep in mind.
So while I fully understand the desire for
OEMs to seek “one-stop-shop” solutions
for their technology needs, I do encourage
them to constantly reevaluate their supply
chain and be sure they are taking advantage of the latest innovations.
Note: Read this column in its entirety at
Carlos Castillo, Biomedical Engineer &
Research Biomedical Engineering Advisor, Loma
Linda University Zhang Neuroscience Laboratory
Michael Drues, Founder & President,
Marc Dubreuil, Vice President of
Business Development, Farm Design
Stephen Holloway, Associate Director,
Medical Devices and Healthcare IT, IHS
Jinny Lee, Vice President of Strategic Marketing,
Advanced Technology, Edwards Lifesciences
Tom O’Dwyer, Director of Healthcare
Technology, Analog Devices
Michael Pereira, Senior Vice President of
Technology & Operations, Ximedica
Alan Schwartz, Executive Vice President,
mdi Consultants Inc.
Thomas M. Tsakeris, President, Devices and
Diagnostics Consulting Group
Jan Wittenber, Member of IEEE and Fellow at
the Center for Medical Interoperability
Derek Young, Founder & CEO, i360medical Ltd.
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