Impact of COVID-19 on Medical Device Companies
The COVID – 19 pandemic has left no industry unchanged. Manufacturers and distribution supply chains are grappling with the sudden downturn in elective procedures across the world. At the same time, there has been a transformational change in consultations – with remote diagnosis, prescriptions and doctor visits over conference calls. Morulaa has compiled together some Key Trends and Action points for Medical companies to take during the Pandemic. These are based on several discussions with Opinion Makers and Influencers in the Industry.
The Various Trends Seen in the Medical Device Sector are :
1. Increase in Hospital and Home Care Consumables Equipments Used to Manage / Treat COVID-19
The COVID-19 Pandemic has seen an exponential growth in medical devices associated with COVID. Medical consumables include – foot covers, disposable gloves, sheets, syringes, masks ventilators, drugs, PPE kits, face shields testing kits, medical devices, pharmaceutical sector, protection wear with airline facility, half and full-face masks, gloves, infrared thermometers, pulse oximeter etc. All types of medical device manufacturers, distributors and different points in the supply chain are moving towards finding business opportunities to manufacture, sell and promote these products. If you have a facility which can be converted to manufacture products which governments deem ‘essential’ it could lead to a new market opportunity and also incentives from the government.
2. Reduction in Elective Procedures
The COVID‐19 pandemic has disrupted routine hospital services globally. We estimate a reduction of almost 75% for elective procedures taking place across the country to prevent the risk of infection and convert operation theatres into COVID-19 emergency units. Most of these cancelled procedures take place in the field of Oncology and Orthopaedics. In order to restart elective procedures, several safety protocols must be maintained such as – maintaining sanitation, isolation of patients before and after the surgery, testing the patient for COVID-19 before they are admitted for surgeries etc. It is expected that the Elective Surgery Industry will be among the first few to bounce back.
Key Action Points that could help sustain Business during COVID :
1. Focussing on Payment Collections from Creditors
The global economy has seen a decline in all the sectors and as a result companies are finding it difficult to pay for the purchases done previously. However, in order to sustain businesses, it is highly essential that solutions are found to get these outstanding payments sorted. Companies can offer a pandemic discount to help customers make payments and can introduce schemes where they can make payments over a period of time rather than doing it all together. They can also promote digital transactions wherein several benefits are introduced in order to prevent the spread of the virus through physical collection models.
2. Updating Financial Models to Ensure Product is Cycled in the Market
Manufacturers produced products, their customers purchased products and all points in the supply chain until the end user projected their requirements as usual in January 2020. When COVID struck, these projections went haywire and everyone in the supply chain was left with stock unsold. In such times, it is important to identify unconventional ways to liquidate this stock. Some of our suggestions are (1) extend reasonable credit to trust worthy customers who you can bank on to pay (2) Offer Pandemic Discounts (3) Offer buy back options to encourage customers to purchase the product and further sell them (4) Have open conversations with your customers to understand how to work together as a team to continue cycling your products in the market
3. Obtaining Product Certification
With decrease in elective procedures, and a lull in sales – the environment is ideal for applying for Product Registrations with Health Authorities Worldwide. Some countries there are less staff available to process certification requests, and in others focus is being given on quicker approvals for medical products. Manufacturers could benefit by identifying countries where Health Authorities are working faster on the approval process so that they have a competitive advantage when business opens.
4. Market Access/Research Projects
We have found that the Pandemic is an ideal situation to conduct market research as participants are more readily available than before – with the work from home culture, people are willing to participate in interviews, respond to surveys and have seem to enjoy conversations. Hence if you are looking to target a new market, get some feedback on product development and believe in being in the industry for a long term basis, now would be an ideal time to commission a market access project
5. Relationship Building with KOL’s and Distributor’s
As explained earlier in the blog, there has been a reduction in over 75% of Elective procedures in india. This situation reflects a similar point in several global countries. As a result, several Key Influencers are open to discussions over virtual meetings. Manufacturers can find an opportunity in this situation – to introduce their products to KOLs, discuss with them, obtain feedback relevant regionally and look at ways to engage with new KOLs and build stronger relationships with existing KOLs.
A similar scenario applies with distributors – to utilize the present time to develop relationships and sales strategies with distributors. This could include – getting market data of your key competitors, various prices of your product, advantages of the product over other brands etc.
6. Applying Various Schemes to the Business Promoted by the Government
Several governments are promoting production in the home country to curb the spread of the virus and help sustain economic growth. The government is also helping manufacturers by increasing the interest rate, loan sanctions would be done faster etc. By taking advantage of such schemes, manufacturers can continue operations and help sustain their business models.
7. Good Time to Set-up Local Sales Representatives
The pandemic has caused two major levels of issues when it comes to any form of business. (1) Travel to close deals and meet clients to increase existing business (2) Drop in the number of clients. This period could be a good time for a company with a long term aim in global markets to hire talent (as highly qualified talent may be available) and invest time into virtual product trainings, introduction with potential buyers and setting up calls to pitch the product in the market.
In the midst of the darkest hour, those who seek the light are the ones who will scale unfathomable heights. As the popular saying goes : when the going gets tough, the tough get going. We hope that this read has been helpful for you to think of how you can survive and also take advantage of the unique situation that an invisible entity has put upon us.
Cheers
Morulaa Team