Singapore

Srikant Lal

The global medical device market in 2022  is valued at roughly half a trillion US dollars  and is projected to grow at 4 to 6 % year  on year in the coming few years. While  the market is largely dominated by  established manufacturers  with considerable R&D  investments, there is a growing  presence of many newer start-ups  making their way into this vibrant  industry with various kinds of  products, services, and business  model innovations. This is  fueled by a growing disease  burden, an ever-increasing  healthcare awareness, and  a need for better healthcare  by an expanding middle-class  population.  Unlike consumer goods  and other tech-enabled industries,  the time to market for medical device  innovations is much longer with many  regulatory and user hurdles along the way.  While many industries have improvised on their supply  chain to make it just in time, the healthcare industry in  general suffers from a more complex and demanding supply  chain that may cause a huge drain on the working capital and  obsolescence due to poor inventory management. 

Most of the top medical device companies employ a good  mix of direct versus indirect sales partnerships to ensure  wide market coverage and faster scaling of their innovations.  Some of the reasons for going indirect that is, partnering with  a medical device distributor include: 

• Insufficient regulatory and operational experience in a  particular geography outside of their home territory 

• The presence of well-established distributors  focusing on a particular product segment or  established relationships across a wide  customer network 

• Accessing markets with insufficient  scale to deliver returns on capital  (logistics, office space, manpower,  IT systems, etc.) 

• Incomplete solutions: This  is especially the case for  manufacturers who specialize  in a particular product but lack  other key products that form the  complete solution often needed by  healthcare customers. Distributors  help to plug this gap by complementing  other products in their portfolio. 

• Better management of working capital: Outsourcing the receivables and inventory  to a party closer to the customer helps to keep  operational KPIs in check

Engaging a distributor as part of its sales strategy can give a  brand the competitive edge it needs in this critical industry.  Here are 5 of the many Benefits of Partnering with Medical  Device Distributors: 

1. Access to a highly trained and well-networked sales force:  Investment in human capital is the single most important  lever to grow any business and selling medical devicesis no different. Partnering with a reputed medical device  distributor gives a brand instant access to highly qualified  sales personnel who know the market well and are equipped  to suitably represent a range of products or services by  showcasing them at appropriate conferences and exhibitions.

2. Supply Chain Management Expertise: Given the cost,  complexity, and criticality of medical devices; freight, logistics  and intra-country storage & distribution networks need to be  very well managed. What separates a good distributor from an  excellent one is the emphasis one lays on ensuring the supply  chain is smooth and inefficiencies have been adequately  addressed. Established distributors tap into their network of  freight forwarders and distribution center operators to ensure  a seamless flow of goods. 

3. Regulatory Affairs & Quality Assurance Management: The  supply and distribution of almost all medical devices in most  geographies are regulated by the local Health Authorities.  While crucial for overall safety and administration, these  regulations and ensuing product registration formalities  can add significant delays to the overall go-to-market plans  of the brand owners. Having a distributor with a thorough  understanding of the local regulatory landscape makes  this process efficient and can help save considerable  time and investments. Adhering to an effective Quality  Management System (for eg: ISO) distributors help to create  an environment of trust and assurance both with device  manufacturers and healthcare customers. 

4. Biomedical Engineering Services: Throughout its useful  life of around 8 to 10 years, medical equipment needs to  be regularly serviced by trained biomedical engineers. Even  when proper after-sales care is taken, there are bound to  be technical issues related to the equipment. In a market  where many brands with similar devices are competing for  customers’ attention, after-sales technical support becomes  a very important decision criterion for future purchases.  Attracting and retaining a trained workforce of biomedical  engineers can be difficult especially if you are a new entrant  or have a limited product portfolio. This is where a distributor  can come in handy by not only providing a skilled pool of  engineers but also leveraging rapport and relationships with  key hospital stakeholders to manage service escalations. 

5. Value-Added Services: Catering to local customer needs,  many distributors offer a whole suite of value-added services  to remain competitive and relevant. Distributors can offer  Project Management capabilities for medical equipment  that entail collaboration amongst various stakeholders  (architects, building authorities, M&E vendors). They can  also offer Clinical and Technical training to healthcare  professionals to encourage collaboration and knowledge  sharing. They can help optimize current user workflows and  enhance productivity in existing or new setups via Advisory  services. They can also offer flexible payment structures  for the purchase of high-value items via partnerships with  banks and other financial intermediaries.

While there are many quick benefits of working with a  reputed medical device distributor, brands must look at this  relationship as a long-term partnership. By integrating &  involving the distributor as part of its overall go-to-market  strategy, a brand can secure a solid pipeline of future deals  and enhance its positioning. Armed with multiple digital  tools and information systems, the distributor could also  help provide market intelligence and insights which may  go a long way in the product development roadmap for  manufacturers.