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Andy Kach
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Brian Chapman
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In a Time of Change, Here’s What the U.S. Can Learn From Europe

Posted by Matt Scheitlin on August 11, 2016




shutterstock_284712503.jpgRecently, I passed a milestone: In my professional career as a consultant, I have now spent more years working in Europe than I have in the U.S. When I was presented with the opportunity to move to Europe to support our growing medtech business, I quickly realized the unique opportunity and made the decision to move. Working with medtech firms across Europe as well as in the U.S. has given me a unique perspective on what works and what doesn’t from a commercial effectiveness standpoint.

Effective commercial execution in a large, homogenous, data-intensive healthcare environment like the U.S. is foundationally different than in Europe, where all of those elements differ substantially, sometimes even at the regional level within a country. (I’m looking at you, Spain.) That’s not to say that there aren’t a lot of very effective ideas that have been and continue to be exported from the U.S. to Europe. In fact, much of the commercial best practices that we’ve discussed at length on this blog have started first in the U.S. and then traveled across the Atlantic, and they’ve made a dramatic impact.


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However, in recent conversations with my U.S. colleagues, I’ve been surprised by just how important the reverse flow of best practices is in today’s world. Due to the Affordable Care Act, the U.S. healthcare system is undergoing its most dramatic change in years. The evolution prompted by the ACA has accelerated the financial, regulatory and market consolidation pressures that are impacting many commercial organizations. These types of pressures are well-known in Europe, so rather than attempting to reinvent the commercial execution wheel, U.S. firms should first look to Europe for lessons on how to function—and succeed—in these new marketplace conditions.

Here are four lessons that U.S. organizations can learn from their European counterparts:

  1. Product development: The U.S. has always had a unique perspective on healthcare innovation. If it’s better than what’s currently on the market, then it will be approved, generally, regardless of the short-term payback economics. That is not the case in Europe. In the U.K., cost-benefit analyses are commonplace in the new product approval process. This requires organizations to think differently about what true innovation is and when to invest in development.
  2. Portfolio specialization: The scale of the U.S. has long allowed a degree of specialization on both the marketing and sales teams that simply isn’t feasible in other parts of the world. This lack of scale has required European countries to make decisions around when to specialize and how to be more effective when specialization isn’t possible. For instance, some companies in France are restructuring local marketing teams, moving from brand marketers to portfolio marketers for non-strategic/low-differentiated products. This allows for better alignment between the marketing and sales teams, and a new perspective on how to best communicate the value of a portfolio.
  3. Commercial buyer consolidation: Commercial buyer consolidation is happening at an accelerated pace in the U.S. across all types of buyers (hospitals, insurance companies, etc.). Though it feels new in the U.S., many European countries have been dealing with this type of consolidation and concentration for many years. For example, Germany’s large buying groups have long been the gatekeepers for access to the medtech market. Over the years, the most successful healthcare companies have focused much of their commercial spend in developing a buying group sales capability, including best-practice processes for tender management, contracting, solution development and pricing.
  4. Commercial deployment flexibility: As the U.S. system changes, the consolidation mentioned above of payers and providers, and the interaction between the two, is evolving at different paces in different parts of the nation. This requires flexibility in how local sales teams are structured and deployed to best meet their customers’ needs. This type of flexibility has been a key part of commercial success in the Spanish market for years. The regional nature of the market requires different commercial approaches, from those focused more on clinical demand creation to others focused much more on commercial selling.

 

The structure of socialized medicine in many European countries offers some important examples from which U.S. firms can learn as the American healthcare system evolves. Changing from exporting to importing best practices is a logical first step.

 

Topics: Matt Scheitlin, medtech, Europe

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AUTHORS
Brian_Chapman_thumbnail
Brian Chapman
Principal,
ZS Associates
Tobi_Laczkowski_thumbnail
Tobi Laczkowski
Principal,
ZS Associates
Will_Randall_thumbnail
Will Randall
Manager,
ZS Associates
Matt-Scheitlin-London_thumbnail
Matt Scheitlin
Associate Principal,
ZS Associates
Andy-kach_thumbnail
Andy Kach
Associate Principal,
ZS Associates
Bhargav_Mantha_thumbnail
Bhargav Mantha
Associate Principal,
ZS Associates
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