most successful 10 years of my career,” Eisner wrote in a 2010 retrospective article for The
Huffington Post. “We had a great time together, complementing each others’ styles and
interests in a way that was, I dare say, magical. But if there’s anything to be learned from
the story of our first day of work, it’s this: working together is never that simple. Even when
two people are a perfect fit, there are going to be times when someone needs to speak up
and say something difficult. Anyone who’s married knows this. Marriage is about surviv-
ing, counter-balancing, and building. On the whole, though, the institution of marriage—
life collaborations—gets a lot more attention than the institution of business collaboration.
But the benefits of working together—or finding a partner—are extraordinary.”
Quite extraordinary indeed: Business collaborations provide a slew of advantages to
its participants, including reduced costs, improved quality, better revenue per employee,
access to expertise, geographical penetration and reduced risk. Partnerships, in fact, have
become an integral part of companies’long-term growth strategies as they jockey for share
in an increasingly globalized market.
Alliances have practically become the norm for medical device OEMs as they wrangle with
hospital cutbacks, constant pricing pressures, shrinking reimbursement rates and a 2.3 percent
excise tax on their products to help fund the Affordable Care Act (ACA). Flying solo no longer
is an option; outside collaborations are essential for survival in the current healthcare climate.
“Medtech companies have been facing tremendous market pressures over the past
few years—the global recession impacting customers’ budgets, ACA changing the market
dynamics around cost and value, market shifts by growing emerging market economies,
shifting business models and rapidly evolving technologies such as the Internet of Things,”
noted Timothy Bowe, CEO of Foliage Inc., a Burlington, Mass.-based product development
firm, and Altran North America, a Bordentown, N.J.-headquartered high-tech engineering
and consulting company for the automotive, energy and life sciences industries.
“To address any one or two of these pressures would challenge most companies; to
meet them all requires effective partnering with outsourcing companies that can support
medtech organizations across the entire product life cycle,” Bowe continued. “These outsource partners have the ability to add innovation to next-generation products by leveraging technology from other industries, along with creative ideas around new ‘solutions’ and
approaches aimed at reducing cost from the back end of the product life cycle to free up
more investment for novel products and services.”
From Taboo to Touchstone
The medical device industry has never been a big proponent of change. When Boston
Scientific Corp. founder Itzhak Bentov built the world’s first steerable catheter in 1967 (the
company was called Medi-Tech back then), the medtech sector existed mainly in gar-ages
and basements. Surgeons invented and refined devices for their own needs, and these
instruments rarely made it to the general market. None of these inventions were regulated.
Most, if not all, surgeons were resistant to the emergence of new technology at that
time, fearing the innovations could eliminate the need for their expertise. As surgeons
dominated the medical hierarchy, device firms faced an uphill battle in selling standardized
products to the healthcare market.
Bentov and other Boston Scientific (Medi-Tech) executives attempted to overcome
physician resistance by recruiting well-qualified experts to act as sales agents, conducting
extensive global product tours, attending industry conferences, tapping into increasing
public interest in less invasive medical procedures, and exploiting several public relations
coups for steerable catheter technology. The company also built relationships with influential and innovative surgeons, a move that perhaps was most effective at conquering
industry-wide resistance to change.
Partnerships have been key in the evolution of outsourcing as well. In many ways,
medtech’s path to strategic partnerships mirrors that of the pharmaceutical industry: Maturing companies begin consolidating, morphing into sales and marketing giants; they
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