Innovation Impacted for Start-Ups
Q: Considering the financial pressures faced by OEMs, what will be the impact to R&D and innovation in the medical device industry?
While Metrigraphics LLC certainly does not speak for the medical device OEM industry, as a custom contract manufacturer of leading edge micro components, we certainly feel the impacts of various external elements on the ebb and flow of R&D and innovation activities of the OEMs.
We have been working in the medical device field for the past 20+ years and have noticed that the OEMs appear to remain committed to device development and innovation almost regardless of the pressures of the economy or regulatory issues. They understand that their futures rest in the production of a continual flow of new devices, processes, and tools to improve the outcomes of patient care, as well as keep their companies in the forefront of technology. As a result, we see a near constant stream of inquiries into applying our process technologies to help solve their unique problems.
Where we do see an impact is in the new ventures and start-ups. With VC money getting tight and IPOs becoming tougher, coupled with a regulatory process that consumes considerable time and money, the number of inquiries coming from this sector have slowed noticeably. Also, as projects do surface, we see that more decisions to cancel a project are being made earlier in its lifecycle as these companies determine whether there will be sufficient ROI to justify the investment to get it to market.
In summary, we believe that the pressures will cause more strategic thinking, perhaps slow some things down a bit, but the OEMs realize that innovation and new products are the lifeblood that feeds their growth.