The minimally invasive surgery market, and associated Danish ...

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12
The minimally invasive surgery market,
and associated Danish opportunities
4.3 Innovation:
As briefly mentioned the third and final derived dynamic from the combination of inverted demographic
pyramid and the following cost pressure on healthcare systems, globalization and commoditization, is
innovation.
How does an industry that has been globalized and commoditized develop further? Well the answer is
simple: Through real and significant innovation.
Critics might object that after an industry has been commoditized follows a period with no or limited
innovation. This might be correct for commodities like coffee - originally a luxury and premium priced
product that after hundreds of years of premium status, became a commodity during the 20th century.
Yet, one must not forget that the commodity status was not maintained for long as true innovators
marched in and re-invented the coffee industry both in terms of machines and end products (drinks
containing coffee). When looking at the history and development of coffee, it seems fair to state that it
went from being a pure luxury product to being a pure commodity product. Yet, revived into the 21st
century with two main product lines: a commodity- and a luxury line to the benefit of a broader range of
consumers.
The mindful reader will recall that, we earlier on stated that the change in market dynamics which we
stand before embodies the good news for patients, healthcare professionals, public healthcare systems
and the surgical industry at large. No doubt cheaper mobility implants and stents are beneficial to
public healthcare systems and privately funded patients, but how can this change be beneficial to the
surgical industry? Is it not, from a purely financial perspective, the almost beautiful symphony of high
unit prices, marginal innovation strategy and thus extended PLC-curves, spiced up with a natural and
anti-cyclical procedure growth averaging 3-5% per year that have led to significant wealth creation
among the top-10 device companies?
The reason why we argue that this change can be beneficial to the industry is that the “survivors” will
come out leaner, meaner and more innovative, which in it self is positive. On top of this the survivors will
also avoid going through the unfortunate mix of public embarrassment and self torture that the
pharmaceutical industry has/is going through. The pharmaceutical industry had for years been at the
stage where the surgical device industry is today. Incapable of understanding, embracing and acting on
the fact that it had become complacent and thought to have earned a right to maintain abnormally high
profit levels. Hand-in-hand with this lack of understanding came a lack in capabilities to address this
matter with appropriate measures, resulting in an embarrassing fight to cling on to “the way it used to
be” through various lobbyists, infomercials etc. – a battle that was clearly lost on several fronts and if
nothing else it was certainly lost to the public opinion, and more importantly to the producers of generic
pharmaceuticals.
If you feel like countering that statement then think about what springs to mind when thinking about the
pharmaceutical industry. Or even better ask a handful of people that same question. Answers will, if
your “sample group” is not biased, most likely contain vocabulary like: ”greedy, un-trustworthy, i am
skeptical of stuffing myself with chemicals, they are pushing indications to sell more”.
One may also want to consider how the, by Danes perceived, best behaved kid in class – Novo Nordisk
– has recently been questioned in relation to allegations of pushing off-label usage of its Novo-Seven
product. Another recent Danish case is Lundbeck's anti-depressive – Cipramil – which was allegedly
prescribed to teenagers with fatal results.