Although the growth and success of a medical device company may depend on innovation that transforms the marketplace, it is your company’s mature products that form the bedrock of your financial future. These products have lifespans that may reach up to 20 years, so to ensure products stay updated, compliant, and cost-effective, you need robust sustaining engineering.
Sustaining engineering is the technical support of mature products. It encompasses activities such as managing obsolescence, addressing customer complaints, fixing bugs, and enhancing features. The process also ensures the continuing regulatory compliance that is imperative to the continued use of your company’s medical devices.
How sustaining engineering improves your bottom line
Sustaining engineering is becoming increasingly crucial to maintaining profitability in the medical device industry. Medical device products typically average around 22 percent margins; however, these margins are eroded by factors ranging from changes in buying power to complications with payment systems.
Buying power has shifted from physician preferences hinging on personal experience in independent clinical settings to larger organizations making choices based on statistical analysis of the safety and efficacy of procedures. These larger organizations focus on cost savings down to fractions of pennies.
Changes in the acceptance of orthopedic devices also illustrate this transformation. Previously, surgeons dictated purchases. As fewer of these specialists operate independently, their preferences are becoming secondary to those of accountable care organizations that coordinate lower-cost care from hospitals, doctors, and associated providers.
Additionally, hospital consolidation has created networks with centralized decision-making. Executives and purchasing organizations, rather than individual physicians, influence procurement.
The shift to cost-centric buying decisions offers an advantage to existing devices over newly developed ones. A mature product can more readily accommodate the corporate pressure for price reductions than a newer introduction, the cost of which must include the recovery of increasing research and development expenses.
The bureaucracy involved in payment systems also plays a role in the selection of your devices. While established devices have existing reimbursement codes, obtaining payment for a novel product is more complicated. Payers will demand data, including clinical evidence and evaluations of care economics, to prove the superiority of your company’s new device over one in current use.
Sustaining engineering maximizes the life of an existing device and can also serve to maximize your organization’s profits.
Advantages of outsourcing
You want to keep your top innovators focused on the next product that will drive the growth of your company; however, they are continuously pulled into sustaining engineering tasks for mature products. One solution to cutting these distractions is product discontinuation, which, unfortunately, would also result in the loss of future profits generated by the device.
A better answer is to partner with a team who offers the engineering expertise you need. Outsourcing to a qualified provider will aid you in keeping your top talent focused on new innovations and in maintaining the levels of quality that are critical to preserving the acceptance of your product in restructured markets.
ALTEN Technology delivers
When components go end-of-life or new functionality for existing products is required, ALTEN Technology can provide the sustaining engineering services you need to stay current. When we take on these tasks, your staff will be free to dedicate their time to innovation and the development of future products.