By Ross Meisner and Michelle Edwards, Guidehouse
As pharmaceutical companies pour increasing amounts of money into direct-to-consumer (DTC) advertising across digital and traditional media platforms in the United States — and have seen generally positive results — medical technology company leaders may be considering following suit.
The U.S. medical device market is the largest in the world, representing 40 percent of global sales, and is expected to grow to $208 billion by 2023. With so much money up for grabs, medtechs could view a DTC campaign as a smart strategy to help sway patients to use their devices — whether they’re combatting an existing therapeutic’ s sluggish or stalling sales, or hoping to jump start the launch of a new technology.
Unfortunately, in sharp contrast to the pharmaceutical industry’s success, medtech consumer campaigns do not help spur sales for most devices. The disparity is even more evident with devices that require training to use and/or surgery to implant/implement. In fact, based on our collective experience working with thousands of medtechs over three decades, DTC promotions for medical devices are usually an indefensible waste of precious resources for the following five reasons.
- Purpose of Campaign Misaligned
Pharmaceutical companies do not use DTC marketing to acquire new customers. Rather, they primarily leverage it to remind current and existing patients to take their medication or to get a refill. Secondarily, they use advertising to remind physicians of the condition and available treatment options.
This strategy is effective (and, arguably, necessary) because pharmaceutical companies rely on repeated need and demand to boost their bottom lines; medtechs do not. Medical devices typically are implanted or purchased once per patient.
That said, medtechs considering DTC promotions usually are looking for new customers. They hope patient-targeted campaigns will:
- convince physicians to adopt their technology,
- persuade patients to request the treatment option from physicians, and/or
- drive the “right” patients to physicians.
Unfortunately, these goals have little to do with raising product awareness among patients, and much to do with changing people’s behaviors, especially that of physicians.
- Ads Do Not Change Physician Behavior
The path to wide market penetration is well-documented. Sure, early adopters will be eager to try a new technology. But each subsequent adoption group will require more hard evidence of clinical and economic efficacy, as well as use guidance, before choosing something new over a proven standard of care.
Keep in mind, adopting a new medical device requires considerable time and effort on the part of physicians. It usually means learning a new technique, gaining experience through repetition, investing in new equipment, studying which patients comprise the best candidates, and changing internal practices — among a variety of other factors. So, even if clinicians see an ad or field inquiries from multiple patients about a new therapy option, most of them will not be swayed until they’re confident it is worth the clinical and economic investments.
- Patients Rarely Make the Decision
In most cases, despite what a patient thinks, the physician and insurance coverage dictate the treatment option chosen. So, even if a marketing campaign reaches a patient and piques his or her interest, the final decision on what medical technology is used or implanted is unlikely to fall to the patient.
Even in the case of durable medical equipment, patients usually are not the sole decisionmakers. Instead, they may be given a choice among a few options that the physician recommends and can prescribe, and then choose from these based on their own preference and out-of-pocket costs.
In fact, the only cases where DTC marketing among medtech patients is helpful are those in which a patient unilaterally drives the decision — for example:
- The patient wants to fix a (real or perceived) problem, such as elective eye or plastic surgeries
- The patient bears the total or a majority of the cost burden
- The patient is choosing based on preference relevant to comfort, aesthetics, style, etc.
In other words, unless a patient is purchasing an over-the-counter commodity — such as a heating pad, pack of bandages, or pregnancy test — or taking on the full cost of an elective procedure, advertising stands little to no chance of impacting the final sale.
- Perceived Risk vs. Reward
A medical device is a tool, just like a pharmaceutical is a tool, but the latter is a tool that every clinician already knows how to use. So, when a pharmaceutical company launches a new drug, clinicians naturally understand how it works and how to use it, given its indications, dosages, and prescription requirements.
A medtech must overcome a much larger barrier. Because every device is different, clinicians must undergo rigorous training and become proficient with a device before comfortably and effectively introducing a new or updated treatment option to patients. Thus, even after clinical efficacy is proven and economics are justified, medtechs must also convince physicians it’s worth the time and effort to learn how to effectively use the tool.
Further, medical devices carry a greater perception risk than most prescription drugs (with the exception of opioids). Consider, in practical terms, if a drug does not work, the provider and patient tend to assume the drug simply did not work for the patient; a different drug likely will be prescribed.
However, if a medical device does not perform as expected and/or the medical team makes a mistake implementing the therapy, the clinician must correct it. This often results in a longer hospital stay, necessitates a follow-up procedure or a longer after-care period, and more — all of which add cost and potential reputational damage.
To be fair, these differences in perception originate in part from devices’ and pharmaceuticals’ differing paths to market. Drugs go through a rigorous approval process in the United States in which definitive clinical benefit – and associated risks – must be demonstrated and proven before a new product is approved. Medical devices, though, generally go through a rigorous approval process to prove they work to a measurable and demonstrated degree, with the assumption and expectation that further learnings will be collected from trials or in practice.
To this end, a direct-to-consumer campaign will do very little to assuage physician fears or engender user trust.
- Return On Investment.
Upon receiving U.S. Food and Drug Administration (FDA) approval, a medical technology must overcome a series of barriers to gain widespread adoption; providers are a critical gatekeeper at this point, as are payers.
Even if your team produces the best-ever DTC campaign, creating strong interest among patients, you still need to convince providers to provide your technology and payers to reimburse for it. So, in most cases, all that money spent promoting your technology to patients would have been better spent helping convince physicians — through clinical studies, guideline development, economic justification, training, general outreach, etc. — to adopt your technology.
Certainly, it’s up to your leadership team and board to decide where to invest. But given the market odds, medtech’s best bet rarely begins with consumer marketing. For most medical technologies, DTC marketing should be unleashed only as a last step to reach an untapped pool of patients — after converting all the relevant physicians.
About the Authors
Ross Meisner is a partner in the Life Sciences practice at Guidehouse and has 30 years’ experience building high-technology companies. In 2007, he co-founded Dymedex Consulting. Additionally, he co-founded and held leadership positions at four other start-ups and two international joint ventures. His experience spans medical technology, management consulting, internet financial services, and the semiconductor industry. Prior to Dymedex, Ross was director of Global Market Development at Medtronic, implementing new methods to identify untapped growth opportunities across geographies.
Michelle Edwards is a director in the Life Sciences practice at Guidehouse. She has nearly 20 years’ experience in life sciences, with roles in asset valuation, business development, finance, investor relations, and marketing. Her work at Guidehouse is focused on market development strategy and tactical, local, market development planning. Most recently she has worked on projects in therapeutic areas including ophthalmology, hematology, oncology, orthopedic, peripheral vascular intervention, and emergency medicine.