What do Stryker, Biomet, Medtronic, and Boston Scientific all have in common? Yes, they all manufacture medical devices. But more specifically, all four of these medtech companies have implantable device divisions. And from 2005 – 2011, the implantable device segment has been the most consistent top performer relative to other categories including: in vitro diagnostics, medical consumables, medical equipment, and diversified life sciences.
But the times are quickly changing. Why? Well, the implantable devices segment has the highest SG&A expenses in comparison to the other previously mentioned categories. In fact, it’s estimated that orthopedic medical device companies spend $35B per year on sales support. Perhaps “bloated” is the best word to describe this situation?
But it’s not just the implantable devices segment that may be in a for a rude awakening. Many medtech companies spend anywhere from 200-500% more on SG&A versus comparable high tech firms. And as gross margins for medical devices continue to be squeezed, all medtech companies (regardless of the specific product segment) will need to reevaluate their SG&A spend.
One tool that may help in this process is MedPassage. In this interview with Gavin Fabian, cofounder and CEO, we learn how MedPassage is trying to build a more efficient medtech market through e-commerce and collaboration technologies.
Interview Highlights with Gavin Fabian
- What is MedPassage and how does the platform work?
- How the idea for MedPassage was born.
- Can MedPassage be considered the “anti-GPO”?
- How MedPassage is overcoming the “chicken and egg” problem as they build out their network.
- How have hospitals, surgery centers, and other healthcare providers responded to MedPassage? And what has the response been like from medical device companies?
- What types of medical products are moved through the MedPassage platform?
- What cost savings do healthcare providers experience through the network?
- How MedPassage reduces price exposure issues for medical device companies.
- How do medical device companies transition to the MedPassage platform?
- Can medical device companies charge for service and support through MedPassage?
- How is MedPassage different than services like Wright Medical Direct and Novation Aptitude?
- And much more…
This Is What You Can Do Next
1) You can listen to the interview with Gavin Fabian right now:
2) You can also download the mp3 file of the interview by clicking here.
Don’t forget – you can listen to this interview and all of the other Medsider interviews via iTunes. And if you get a chance, leave us an honest rating and review.
3) Read the following transcripts from my interview with Gavin Fabian.
Read the Interview with Gavin Fabian
More About Gavin Fabian
Gavin Fabian is the Cofounder & Chief Executive Officer of MedPassage. He cofounded MedPassage with the vision of creating a smarter medtech market, where device companies and medical centers could collaborate and exchange products more efficiently than ever before. Gavin graduated from Princeton University in 2007. He held product management positions at NuVasive and SpineWorks prior to forming MedPassage.