Firstly, let me take this opportunity to wish everyone a Happy New Year. This may seem strange to some in that we are nearly into month 2 of Quarter 1, however, I feel it is important to remember that for many, the previous few years have been a tough, arduous journey of uncertainty, insecurity and commercial instability, and that’s the lucky few.
For many individuals within the medical device industry, 2010 signalled a positive increase in commercial sales, job opportunities and general activity within the commercial healthcare arena. Medical device Giants Johnson & Johnson experienced improved sales across their Medical devices and Diagnostics division last year with sales advancing by 4.4 % year-on-year to a total of $24.6 billion which would demonstrate a positive step in a challenging year. Many would expect such a strong performance from a seminal company such as J & J, however, in this day and age, an organisation simply cannot rely on it’s size and reputation; the fall of Lehmans Brothers in the Financial Sector is testament to that.
Some of the smaller medical device companies however have suffered greatly as a result of the financial crisis, with the pound rising and falling throughout 2010, weakened by rock-bottom interest rates and worries over public debt levels. This has had a direct impact on smaller medical device companies, particular distributors who import goods to the UK at what is now at a greater cost to both themselves and the NHS. Given that the NHS is becoming, what many believe, much more price focussed, this increase in cost cannot be sustained.
I am a Senior Consultant in a specialist healthcare recruitment organisation who place Senior sales and marketing professionals into the medical device arena exclusively. I have the pleasure of working with a complete range of medical device companies; from the market leading U.S Giant who pioneer new technologies, to the small start up looking to capitalise on what is fast becoming a price based sales process within the NHS.
Throughout 2010 I noticed certain patterns emerging within recruitment across the medical device industry. Most notably I would say was the desire of organisations to become a little more stringent in regards to the type of candidate they would be looking to interview or hire. Historically, large organisations and even SME’s have looked to the Graduate market to source new and enthusiastic sales personnel. Many have also looked at sales people with solid commercial experience with perhaps a science based qualification obtained from University or further study. As of early 2010 however I noticed a strong shift to only recruit those with specific experience and or pre-existing contacts within a specific field. Certain areas of healthcare would demand such experience; orthopaedics, cardiology and vascular intervention would certainly demand an understanding on a higher level. However, even companies that had historically, as apart of a pre existing recruitment model, hired high calibre sales people away from the healthcare industry, were not doing so any longer. Perhaps a sign that selling into the NHS was to become harder and the demand for experience now, was higher than it had perhaps ever been?
The medical device industry represents an industry in excess of $220 billion world wide. The provision of healthcare will always be present and the need for new innovation to tackle healthcare problems will always be present. Unlike many industries, most notably construction and financial services over recent times, the healthcare industry has and will remain buoyant. The ageing population for example represents a major catalyst for demand of medical devices. The industry does, like many other, face a catalogue of issues; including price concerns, impact of healthcare reform and increasing regulatory involvements in addition to gaining access to the hospital marketplace; more relevant to the smaller, start up organisation.
Like I have already mentioned, 2010 represented a positive year for many companies; this year we have already seen Johnson & Johnson table a bid to purchase Smith & Nephew; a move which would have significant impact on the marketplace; most notably across orthopaedics and negative wound therapy. It is however, also important to remember that whilst the largest companies have tremendous sales and marketing capabilities, the truly novel ideas still primarily emerge from the smaller companies who work closely with doctors, surgeons and engineers. More than 98% of the medical technology industry consists of small businesses with Big ideas. In recent years we have seen organisations such as Intuitive medical and Hansen technologies come to the fore in the exciting world of robotics; perhaps the future for healthcare?
Healthcare will continue to represent an area of growth and capital gains for private investors which again would demonstrate a confidence in the healthcare market to provide a decent return on said investment. One equity partners; who make private equity investments for JP Morgan bank being the driving force behind Systagenix and their woundcare operation in the UK.
Kim Jones – Senior Consultant