BioWorld. Link to homepage.

Clarivate
  • BioWorld
  • BioWorld MedTech
  • BioWorld Asia
  • BioWorld Science
  • Data Snapshots
    • BioWorld
    • BioWorld MedTech
  • Special reports
    • Aging
    • Biosimilars
    • Artificial intelligence
    • Coronavirus
    • IVDs on the rise
    • Radiopharmaceuticals
    • Science '22 in Review
    • Top Biopharma Trends of 2022
    • Top Med-tech Trends of 2022
    • Premium reports
      • BioWorld Financings Reports
      • Disease Incidence & Prevalence Summaries

BioWorld. Link to homepage.

  • sign in
  • Sign Out
  • My Account
Subscribe
BioWorld - Monday, October 2, 2023
Home » Blogs » BioWorld MedTech Perspectives » Will innovation pay the price for med-tech biggering?

BioWorld MedTech Perspectives
BioWorld MedTech Perspectives RSS FeedRSS

BioWorld MedTech

Will innovation pay the price for med-tech biggering?

June 10, 2016
By Amanda Pedersen
No Comments

The-loraxThe urge to go on biggering and biggering and biggering has taken over the med-tech world. Barely a year after Zimmer and Biomet completed a $14 billion merger to become the second largest orthopedic device maker, the company now plans to spend another $1 billion to buy LDR and grow its spine business.

Not too long ago a deal this size would have been considered a blockbuster for the medical device industry. But after two years of mega-mergers like Zimmer-Biomet, Medtronic-Covidien ($42.9 billion) and the still-pending $25 billion merger of Abbott and St. Jude Medical, this latest acquisition pales by comparison.

But what would Dr. Seuss say about such massive M&As? He tried to warn us about corporate greed 45 years ago with "The Lorax" but did we actually learn from it or did we simply scoff at a story critics say brainwashes children with a liberal, anti-industry agenda?

Published in 1971 at the height of the environmental movement, Dr. Seuss' furry orange protagonist conveyed a clear message about excessive industrialization. Since then, most major companies have adopted corporate responsibility programs to show they care (or at least pretend to care) about environmental sustainability and reducing energy usage.

But “The Lorax” is also a fabulous critique on consumerism as the antagonist, the Once-ler, insists on “biggering and biggering and biggering” to sell more thneeds “which everyone, everyone, everyone needs,” though they offer no real value.

Just as the Once-ler did not mean any harm by growing his thneeds business, there is surely no ill-intent behind med-tech’s merger mania. Device companies are simply responding to the changing health care environment and the push for a more value-based system. Delivering better clinical outcomes at lower costs requires scale. Still, we should be wary of the Once-ler’s “business is business and business must grow” attitude. The Brown Bar-ba-loots, the Swomee-Swans and the Humming-Fish paid the price for the Once-ler’s greed. Can we afford to let innovation pay the price for med-tech's greed?

So let's think about the pros and cons of med-tech biggering.

Pros:

  • Mega-mergers provide scale to build value-added platforms that smaller companies can't always afford to invest in.
  • Companies are more likely to make products that truly add value to the health care system instead of launching prettier and pricier versions of existing devices and calling them groundbreaking.
  • Hospitals will get more of a one-stop-shopping experience rather than going to one vendor for surgical tools and another for heart stents. The proposed Zimmer-LDR deal, for example, is expected to significantly beef up the company's spine portfolio, which Zimmer's customers will probably appreciate.
Cons:
  • Just because super-sized med-tech has the power to innovate, doesn't mean it will. If sales reps can walk into a hospital holding all (or at least most) of the cards, manufacturers will be less motivated to innovate.
  • Competition spurs innovation by forcing companies to approach unmet needs from different angles. By taking out the competition, consolidation poses a huge threat to innovation.
  • As more companies announce mega-mergers, others might get scared into making bad deals because they're worried about keeping up with the Medtonics and Abbotts and Zimmers of the world.

You must login or register in order to post a comment.

Report Abusive Comment

Popular Stories

  • Today's news in brief

    BioWorld
    BioWorld briefs for Oct. 2, 2023.
  • Today's news in brief

    BioWorld MedTech
    BioWorld MedTech briefs for September 29, 2023.
  • 3D illustration of cancer in crosshairs

    Dato data lack means upside for Gilead; Padcev 'must-win' does win

    BioWorld
    Upbeat phase III findings outweighed less encouraging late-stage trial news, as big pharma provided a mixed bag of cancer findings – with one data batch to form...
  • Man measuring waist

    Structure challenges Lilly, Pfizer, with oral GLP-1 data; raises $300M

    BioWorld
    Structure Therapeutics Inc.’s stock climbed 34.6% following a readout of what analysts call “competitive” and “exceptional” phase Ib data at 28 days of oral...
  • Art concept for gene therapy research

    Machine learning tool Alphamissense analyzes human mutations to predict diseases

    BioWorld
    Proteome analysis with artificial intelligence has made it possible to create a catalog of all possible missense mutations in the human genome to predict...
black cortellis ad

BioWorld Premium

Enjoy extended coverage for the most complete market view with BioWorld, BioWorld MedTech, and BioWorld Asia in a single, easy to access subscription.

Subscribe
  • BioWorld
    • Today's news
    • Analysis and data insight
    • Clinical
    • Data Snapshots
    • Deals and M&A
    • Financings
    • Newco news
    • Opinion
    • Regulatory
    • Science
  • BioWorld MedTech
    • Today's news
    • Clinical
    • Data Snapshots
    • Deals and M&A
    • Financings
    • Newco news
    • Opinion
    • Regulatory
    • Science
  • BioWorld Asia
    • Today's news
    • Analysis and data insight
    • Australia
    • China
    • Clinical
    • Deals and M&A
    • Financings
    • Newco news
    • Regulatory
    • Science
  • BioWorld Science
    • Today's news
    • Biomarkers
    • Cancer
    • Conferences
    • Endocrine/Metabolic
    • Immune
    • Infection
    • Neurology/Psychiatric
    • Patents
  • More
    • About
    • Advertise with BioWorld
    • Archives
    • Article reprints and permissions
    • Contact us
    • Cookie policy
    • Copyright notice
    • Data methodology
    • Podcasts
    • Privacy policy
    • Share your news with BioWorld
    • Staff
    • Terms of use
Follow Us

Copyright ©2023. All Rights Reserved. Design, CMS, Hosting & Web Development :: ePublishing