How MedTech Is Displacing Drugs in the Treatment Paradigm

For many years, pharmaceutical innovations that served as a viable alternative to surgical interventions were widely celebrated. The commonly held belief was drug therapies are less risky or more preferred by patients over medical procedures. But recently, a shift is being driven by two factors: the rapidly increasing sophistication of technology and a greater consumer perception of medication as “too easy” of a solution. These factors have positioned the innovative MedTech market at the forefront of industry conversations about smarter healthcare delivery.

Today, MedTech innovations present themselves as effective complements to traditionally pharmacological solutions. In fact, these MedTech innovations can even be safer and lead to better outcomes in some instances. This is not intended to discount some of the amazing pharmaceutical therapies available; rather, emerging MedTech capabilities open the doors to new care options for patients and providers alike.

So, what do these developments in MedTech mean for life science executives, from chief financial officers to chief medical officers, as they navigate this emerging space?

The Rise of MedTech as Interventional Medicine

Side effects from pharmaceuticals are perhaps the leading reason for physicians and innovators to look at other options, as they may be undesirable or challenging to manage. If a patient can’t stay on therapy because of side effects, then it calls into question the validity of the drug entirely.

Pain management is one area serving as a recent example. In the wake of the opioid crisis, the fear of managing pain with drugs is widely spreading. As a result, there have been major innovations in spinal stimulation as an alternative—such as HFX from Nevro.1

Another example of a drug class with challenging side effects is blood thinners such as warfarin or Factor Xa inhibitors, which are commonly used to reduce stroke risk in patients with atrial fibrillation. A key side effect of blood thinners is an increased risk of bleeding, as some patients cannot tolerate this therapy.2 The AtriClip from Atricure along with competitors have come to market with mechanisms for the exclusion of the left atrial appendage (LAA), which can eliminate the need for some patients to be on blood thinners.3

A final example (though there are many others) is in mental health in areas such as managing depression, ADHD, or addiction. The side effects of the various drugs in this area abound and include anxiety, sleeplessness, weight loss, dizziness, and many others. Additionally, they are often long-term treatments. A new class of purely software-based digital therapeutics have been coming to market from companies such as Pear Therapeutics that provide a gaming experience to help manage some of these psychiatric conditions.4 We expect to see these digital therapeutics further expanding into other areas as well, such as musculoskeletal care.5

MedTech’s Potential to Address Unmet Patient Needs

Perhaps not surprising, medical innovations are taking hold in areas that have proven challenging to solve with medicinal solutions. Obesity and diabetes are key examples. Several years back, a number of promising drug therapies were being lauded as game changers, only to come to market with marginal outcomes combined with noticeable side effects.6 Even today, the drug options for obesity management are dubious and available drugs for type 1 diabetes have only made marginal improvements in a patient’s ability to manage their blood glucose levels.

Continuous glucose monitors (CGMs) have emerged to help patients manage their glucose levels in ways that allow them to do so more efficiently and in more real time, thus helping manage the utilization of insulin and other drugs more proactively and judiciously.7 CGMs are starting to be used for patients with type 2 diabetes where the drug options also have mixed results. CGMs also allow the patient to manage their blood glucose levels in a safe range and more proactively manage drug therapy.

Sleep management is another area where available drugs are often not getting the results patients would desire. Medical devices such as continuous positive airway pressure (CPAP) therapy have been on the market for quite some time but have historically experienced issues with patient adherence. In recent years, improvements in CPAP therapy devices have been substantial in making these devices much more comfortable and quieter—increasing patient adherence.8

Some health conditions such as stroke require intervention to be so fast that there is little time to wait for a drug to take effect. Every minute is meaningful to an improved patient outcome, and the most common treatment for an acute ischemic stroke involves a class of clot-busting drugs called tissue plasminogen activators (tPA) that have a narrow therapeutic window.9 An alternative medical intervention has emerged called a mechanical thrombectomy, most notably from Penumbra, which is often done in conjunction to a tPA and emerging evidence suggests the mechanical thrombectomy may have better outcomes in some instances.10

Addressing Drug Resistance or Compliance with Technology

Some patients with epilepsy who do not respond to available drugs have opted for a class of devices called neuromodulation devices.11 This therapy involves using a device to send small electric currents to the nervous system. Stimulating nerve cells can release substances that change how the cells act or help go back to their normal state. Vagus nerve therapy, responsive neurostimulation, and deep brain stimulation are examples of different types of neuromodulation that can be used to treat epilepsy.12 In another example, Cala Health is addressing a critical unmet need for movement disorders by treating tremors with a wearable neuromodulation device leveraging peripheral nerve stimulation with the integration of a feedback loop customized to an individual.13

Retrospective analyses indicate that approximately 40% of patients with newly diagnosed hypertension will discontinue their antihypertensive medications during the first year of treatment,14 and resistant hypertension is underdiagnosed suggesting key unmet needs despite the proliferation of therapies.15 In the area of renal denervation, a transfermoral procedure involving the use of ablative energy, a recent study indicated that triple therapy resistant hypertension patients were able to decrease 24-hour ambulatory blood pressure at two months, which may yield an alternative to guideline-recommended pharmacotherapy.16

Disease management and treatment adherence have long been potential areas that could be impacted by digital methods. At HIMSS21, AstraZeneca discussed its partnership with an academic medical center and disclosed preliminary results from the AMAZE disease management platform featuring an integration with the hospital’s EMR system.17 Adherence rates for treatment surpassed that of more traditional market-based digital offerings potentially due to the clinician-led nature of treatment adherence. In addition, the platform yielded high acceptance among patients and was able to identify at-risk patients early.

Meanwhile, digital therapeutics (DTx) are disrupting traditional pharmacotherapy interventions in the area of insomnia—with the potential to reach more individuals. Based on a Markov simulation model, a recent study indicated that digital cognitive behavioral therapy (CBT) through an app, Sleepio, was more cost effective with a net benefit value of ~$681 per individual over six months compared with ~$273 for insomnia pharmacotherapy and also had an incremental cost-effectiveness ratio (ICER) that was more favorable compared with pharmacotherapy (~$3,124 vs. ~$9,401, respectively).18

The Growing MedTech Business Opportunity

The future of MedTech will continue to push boundaries in other ways as well. Going forward, we envision the incorporation of AI/ML algorithms and real-world data to inform decision support for interventionalists; a continued push for patient centricity, including connected devices such as ECG monitoring; and the integration of the virtual care and the physical care environment together.19, 20, 21

While R&D product innovation will remain the core of MedTech companies, thinking beyond the core product and its linkages to the broader healthcare delivery ecosystem or existing stakeholders will be a critical step toward remaining competitive in the future.

Key Considerations for MedTech Companies

Suffice it to say, some remarkable innovations are coming out of MedTech, and companies in this space seeking to bring new therapies to market should keep these key factors in mind:

  • Focus on unmet healthcare needs: This may seem obvious, but we still see many examples of investments going toward addressing areas of healthcare where established therapeutics are quite good.
  • Position innovative technologies as complements to established therapies: When bringing innovations to market, changing the established standard of care in significant ways can be met with great resistance from various stakeholders. As such, introducing new technologies in an additive or optional manner can be more beneficial.
  • Define the data generation strategy early: Good evidence takes many years to generate. Too often we find companies start to think about the commercial relevance of clinical data after the clinical trials are well underway or even completed. Real-world evidence generation post-launch is expensive and time consuming, missing key market opportunities.
  • Begin with a design to leverage the data from the device: A key benefit in MedTech therapies is the ability to capture data about the patient and procedure, which can be aggregated across procedures and analyzed for continual learning to improve patient outcomes.

We remain excited about the opportunities for MedTech companies and will continue to monitor their progress in addressing some of the greatest healthcare needs we have today.

The views expressed by the authors are not necessarily those of Ernst & Young LLP or other members of the global EY organization.

References:

1. https://www.massdevice.com/fda-approves-nevro-spinal-cord-stimulation-to-treat-chronic-pain-with-diabetic-neuropathy.

2. https://www.bryanhealth.com/medical-providers/the-beat-a-bryan-heart-blog/the-watchman-device-an-alternate-treatment-to-blood-thinners-.

3. https://healthcare.utah.edu/cardiovascular/treatments/left-atrial-appendage-closure.php.

4. https://www.mobihealthnews.com/news/pear-therapeutics-tags-another-20m-decembers-series-d-round.

5. https://www.fiercehealthcare.com/digital-health/industry-voices-to-see-where-digital-therapeutics-heading-look-to-msk-care.

6. https://www.tandfonline.com/doi/full/10.1517/14740338.2015.995088.

7. https://www.MedTechdive.com/news/cgm-insulin-pump-players-look-to-2021-as-watershed-year-for-diabetes-weara/594190.

8. https://www.hmenews.com/article/resmed-we-have-clear-path-to-double-digit-growth.

9. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5751355/#:~:text=Furthermore%2C%20there%20is%20but%20one,side%20effects%20associated%20with%20delayed.

10. https://www.medpagetoday.com/neurology/strokes/90775.

11. https://www.epilepsy.com/learn/treating-seizures-and-epilepsy/neuromodulation-devices.

12. https://oxfordmedicine.com/view/10.1093/med/9780198707998.001.0001/med-9780198707998-chapter-12.

13. https://www.med-technews.com/MedTech-insights/MedTech-start-up-insights/q-a-meet-the-start-up-cala-health.

14. https://www.ahajournals.org/doi/10.1161/circulationaha.108.189141.

15. https://www.clinicaladvisor.com/home/topics/endocrinology-information-center/underdiagnosed-cause-resistant-hypertension-primary-aldosteronism.

16. https://www.healio.com/news/cardiac-vascular-intervention/20210517/renal-denervation-may-be-better-alternative-to-polypharmacy-for-resistant-hypertension.

17. https://www.healthcareitnews.com/news/updates-and-lessons-learned-astrazeneca-mghs-amaze-platform.

18. https://www.mobihealthnews.com/news/simulation-model-big-healths-sleepio-drives-greater-cost-savings-group-cbt-or-drug-therapy.

19. https://www.mddionline.com/covid-19/5-key-developments-destined-take-MedTech-next-level/gallery?slide=4.

20. https://www.medicaldesignandoutsourcing.com/7-digital-health-startups-you-need-to-watch-in-2021/5.

21. https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/health/ey-pulse-medical-technology-report.pdf.

  • Mark Ginestro

    Mark Ginestro is Partner at EY-Parthenon. Mark has 25+ years’ experience advising life sciences companies in all facets of corporate development. His experience spans large and small molecule, drug delivery, diagnostics, medical device firms, and digital health.

    • John Babitt

      John Babitt is Partner at EY. John has nearly 30 years’ experience in the life sciences and healthcare industries. John advises strategic and PE life sciences clients on M&A, supply chain, finance and tax consideration, and has a special focus on medical technology.

      • Alex Chen

        Alex Chen is Director at EY-Parthenon. Alex provides strategy consulting, transaction support, and operational guidance for the pharmaceutical, diagnostics, device, consumer healthcare, and PE industries.

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