When Worlds Collide: Invasion of the Consumer Product Marketers
The medical device and consumer product worlds have collided. We saw evidence of this recently at the Digital Health Summit of the Consumer Electronics Show 2017 in Las Vegas. The Summit portion had much more prominence compared to the last time we attended two years ago. There were more major consumer brands and large health insurers represented, and larger booths. Hotter than ever are wearables that help employers keep health care costs in check by encouraging healthy habits. We also saw evidence that consumer marketers are beginning to seek expensive Food and Drug Administration product approvals to strengthen and defend product claims, and offer a measure of protection against would-be competitors.
While the consumerization of medical products trend is not new, not all medical product manufacturers are taking this competitive threat seriously. But the threat is very real. From what we observed in Las Vegas, consumer marketers are breaking down walls to become the leaders in this space.
We follow these trends closely and design medical products for both hospital and home use. This gives us a unique, insider’s view into the mindsets of both kinds of companies. Often medical and consumer product manufacturers share the same problem in that both are using old playbooks that don’t consider the many differences between the two industries.
And both need to identify gaps in their thinking as the first step and creating successful product development strategies and new business models. As a start point, it’s important for leaders in these industries to understand their strengths and vulnerabilities in five key areas:
1 FDA Regulatory Approval
The single biggest difference between medical and non-medical products sold in the US is whether or not they have FDA approval. The manufacturer’s intended use of a product determines whether it meets the agency’s definition of a regulated device. For example, a tongue depressor is a Class 1 medical device and a popsicle stick is, well, just a popsicle stick even though they are identical.
Traditionally, this has also been the biggest barrier for consumer product companies entering the medical device markets. This barrier has done a good job of keeping them out for ages. Fast forward to today and some of the biggest consumer brands have entered the space. Tim Cook, CEO of Apple, recently said that they are “really focused” on health, and that the Apple Watch is the company’s ticket into the massive but complicated healthcare market.
The FDA doesn’t care whether you are a startup or industry giant like Apple. Any company that intends that a product be used for medical purposes needs to meet FDA standards and receive its stamp of approval. It adds time, cost, and complexity to the product development process that consumer products marketers just aren’t used to.
2 Needs Versus Wants
The healthcare industry is driven by the need to make us healthy. When a doctor is finishing up surgery he needs to have a way to close an incision. Many medical device companies over the years have invented ways for him to glue, sew, or staple us up.
Consumer markets on the other hand have traditionally been fueled by people’s wants and desires. Advertising agencies, society, and our peers have successfully persuaded us that our wants are actually needs.
The convergence of medical and consumer worlds requires product manufacturers from both sides to reconsider their approach to medical product design.
Traditional medical product manufacturers will need to offer products that connect with people on an emotional level.
Consumer product companies must move past addressing people’s surface level wants when targeting healthcare. At the end of the day their products must deliver on their promises to prevent or treat illness.
3 Who Pays?
As healthcare shifts from the hospital to home, the person making the purchase also changes. This means the criteria by which a product is judged for purchase changes as well.
Medical device manufacturers who are used to selling to a doctor or procurement department may now need to capture the attention of people like you and me. Again that requires knowing how to connect with people’s wants and emotions, a page that can be borrowed from consumer marketing strategies.
On the flip side, consumer product companies getting into the action will need to understand the intricacies of reimbursement codes and health insurance. No easy task for anyone these days!
4 Human Centered Versus Technology Centered
It’s ironic that healthcare is about people but technology runs the show. In The Misunderstood Engineering Prototype I explained in great detail how and why the engineering mindset drives the medical device design industry.
Many medical device companies today are like the computer makers of the 80’s when techies made computers for other techies. Everyone was so in awe of what the technology could do that they put up with lousy designs and experiences. Today computers and whatever’s under their hoods are simply a commodity whose only point of differentiation is how well they fit into a person’s lifestyle.
Medical product manufacturers who borrow from traditional consumer product companies are more likely to come out on top, in my view. As medical products shift from hospital to home, it’s fairly easy to see how continuity of effort applies. What’s less obvious but equally as important is how a consumer focus applies to their products used under more critical conditions in a hospital. The bottom line is that advances in consumer product technology have raised the bar including people’s overall expectations of how a product should work. This has caused a disconnect in that healthcare professionals who may enjoy driving a Ferrari at home are forced to put up with an old Buick at work.
5 Environment of Use
The environments in which medical devices are used in a hospital are pretty well defined. They are categorized into NICU’s, ICU’s, OR’s, etc., and each of those areas operates under a fairly specific set of procedures. While things may vary by hospital or geography, in general medical product manufacturers understand all aspects of the environment in which their products are used.
Medical companies targeting consumer markets will find themselves in unfamiliar territory. Their products may be used in houses, high-rise buildings, offices, hotels, airplanes, or any number of situations they didn’t even imagine.
We compiled this list of strengths and vulnerabilities through the lens of our own experiences. Every business and product is different. We challenge you to create your own list, identify the gaps, and incorporate what you’ve learned into your business and product design strategies.