The COVID-19 pandemic has created numerous healthcare challenges over the past two years—a gnarled supply chain among the most inhibiting—but it’s been quite a boon for medtech research and development.
 
The virus that has killed more than 6.5 million individuals worldwide led to a major boost in R&D spending in 2020, with the top 10 medtech companies collectively investing more than $15 billion, Evaluate Vantage data show. And while that figure rose to $17.4 billion last year, the financial  news analyst organization expects R&D investment to slow in 2022 and rise only moderately through 2028.
 
“However, even modest growth year over year represents a record level of spending,” David Stuart, Life Sciences senior analyst, director, wrote in a Fall 2022 Industry Outlook for RSM, a London-based accountancy network. “We expect the trend of record R&D spend will continue as companies jockey for technical superiority and the pace of innovation continues to accelerate. There are no viable substitutions; if medtech companies don’t maintain strong R&D spend, they risk being left behind in a highly competitive and segmented industry.”
 
Substantial R&D investment has long been tied to healthy product innovation and market capitalization. Whether R&D spending levels stay consistent or falter in the near future remains to be seen, but medtech firms will most certainly have maintain robust research and development pipelines to ensure their future success.
 
MPO’s R&D feature details the trends and market forces driving medtech research and development. Scott Payne, senior project engineer at TEAM Technologies, was among the experts interviewed for the feature; his full input is provided in the following Q&A:
 
Michael Barbella: How has COVID-19 changed companies’ approach to R&D, if at all? Why did it change the approach to R&D? 
Scott Payne: With the push to maintain social distancing in facilities and to work from home, companies have changed the way they communicate both with their own employees and with their suppliers. Although audio and video conferencing were used before COVID, their use has gone from occasional to daily. In many ways this allows people to spend less time travelling and more time working. COVID-19 also the impacted the R&D cycle, as the “time to solution” was extremely compressed. The entire world was learning about the virus and its behaviors at the same time the entire R&D community was challenged with finding solutions for detection, prevention, and vaccination, let alone communicating its findings and solutions on a daily basis. We were all “changing the tires while the car was in motion.”
 
Barbella: In your observations and customer dealings, what areas of healthcare are companies focusing their R&D on (for example, diagnostics, cardio, robotics, etc.)? Why are companies investing in these particular areas?
Payne: We’ve seen a heightened focus in the diagnostics market, particularly around PCR and rapid antigen tests to detect COVID. While the growth in this industry has been quite large, we think the concept of testing, although not new, will remain for years to come. The level of technology in the LFA/IVD sector has been propelled forward tremendously due to COVID testing creating the need for high volumes of test manufacturing, ease of testing requirements (self-test focus) and information sharing (contact tracing, connectivity) integrated into the product.
Also, due to constant supply chain issues, we have also seen a focus toward qualifying multiple raw material sources, which allow for flexibility in the manufacturing of our customer’s products.
 
Barbella: In your observations/customer dealings, are companies allocating their R&D dollars more into transformational or incremental innovation? What is the reason (or reasons) behind their choice? 
Payne: We’ve seen a trend where companies are allocating funds toward both transformational or incremental innovation and neither area outweighs the other. However, incremental changes are being adopted into new products entering the market whereas the transformation innovation will be brought to the forefront as we are able to launch in a more controlled environment/market. The FDA’s EUAs [Emergency Use Authorization], along with assistance of the NIH and RADx programs, has allowed manufacturers to launch products incorporating new innovations at an accelerated rate. The innovators in the market have capitalized on this opportunity that COVID created.
 
Barbella: Is there an ideal or best R&D outsourcing strategy that companies should employ when pursuing new innovation?
Payne: When working on R&D projects it is best to keep two things in mind: 1) Make sure commercialization and scale-up is at the heart of everything in the research and development process and 2) Take advantage of the expertise and consult with suppliers to find the best solution more expeditiously.
Commercialization at the heart of R&D. At each phase of the R&D project, the team must keep the commercialization goals in mind. Every problem that needs to be solved should be approached with the idea that the solutions must be scalable to meet the high-volume targets for the product. Suppliers should be sought out early in the process that have experience with the kind of solutions being considered so the R&D team can take advantage of that experience.
Take advantage of the expertise of suppliers. Each problem that needs solving can be solved most effectively when an R&D team collaborates with a supplier that has experience in that field. Here are a few examples: 
When designing components for a device, it is important to keep the high-volume manufacturing of the component at the forefront. Anything can be 3D printed or machined, but it is a mistake to move forward with a design that doesn’t lend itself to high-volume injection molding or die-cutting when you need millions of those components. Endless hours of work can be saved when you show your suppliers what you want to accomplish and let them help you tweak your design to make it highly manufacturable.
Setting tolerances for components is often a real source of trouble when the time comes to move to high-volume manufacturing. Engineers are often lazy with what they write in the title-block of a drawing, which gives the wrong impression to a supplier. Suppliers tailor their tool and process designs to meet the need. We often approach a project with excessively expensive tool designs and difficult process designs to achieve tight tolerances that were never really a requirement for the component to fulfill its function. Money and effort can be saved if the project starts with an open conversation of where tolerances create a concern for manufacturing and end use.
Explaining how a component is used often affects how the component should be made. If you’re going to do a hand assembly with die cut components with fixtures, then the position of the component on the release liner won’t matter to your process. If you’re going to use an automation machine to remove a part from the liner and precision place it on your target part, then everything about the alignment of the part on the liner is critical. Learning of the real needs too late always leads to a waste of time and money in getting your product to market. 
 
Barbella: When does it make sense—if ever—NOT to outsource medtech R&D?
Payne: There are times your expertise far outpaces the competition and in this instance, it only makes best business sense to retain that “technology lead” by keeping all aspects of the R&D process and even manufacturing scale up process in house. We know ultimately that the market will catch up, but times when your technology is the leader, companies must be the first to market and capitalize monetarily.
 
Barbella: How has virtual interaction benefited medtech R&D? Do you expect it to continue? 
Payne: Virtual communication will continue to expand even when COVID becomes “controlled” since companies have been forced to employ these technologies during this time. Companies have discovered the benefits of this interaction and will continue to support moving forward. Of course, the cost savings with reduced travel is also a benefit.
 
Barbella: How will approaches to R&D evolve in the future? 
Payne: The approach to R&D will remain constant in the foreseeable future, but the tools we use will become more sophisticated. Whether it is software, artificial intelligence, global collaboration, blockchain technology, etc., these tools will enable research, design, development of advanced processes and equipment used to, in turn, power the science of R&D itself.