medtech

Navigating Growth and Transformation in Medtech

As the healthcare landscape continues to evolve, many medtech companies face slowing growth and declining profitability from traditional products and approaches. At TNG, we leverage deep experience across the entire medtech value chain — from contract manufacturing and distribution to care provision — to help clients overcome today’s key challenges and capitalize on emerging opportunities.

Slowing U.S. Healthcare Spending Growth

Cost pressures in the U.S. are limiting domestic growth for medical device companies, pushing them to seek revenue from high-growth emerging markets. However, incremental gains from these markets alone are unlikely to meet shareholder expectations, requiring medtechs to explore nontraditional growth avenues and unlock new revenue pools. With less than 8% of total healthcare spend devoted to medical devices, there is significant opportunity for medtechs to expand their solutions, particularly by addressing broader cost components like pharmacological expenses and labor inefficiencies.

Value-Based Care and Provider Consolidation

The shift toward accountability and value-based payments compels providers to consider total cost of care, creating demand for medtech partners who can help reduce costs. Concurrently, consolidation among providers into large health systems presents both opportunity and complexity—offering medtechs access to larger accounts but also demanding more sophisticated procurement, standardization, and intensified competition.

Blurring Lines Across the Medtech Value Chain

Medtech companies are redefining their traditional boundaries. Examples include manufacturers expanding into services or care provision (e.g., Medtronic’s acquisition of Diabeter), distributors broadening portfolios and launching proprietary brands (e.g., Cardinal Health), and vertical integration moves by manufacturers into distribution (e.g., Bard’s acquisition of Liberator Medical). GPOs and contract manufacturers are also expanding into new service areas such as product design and prototyping.

Industry Consolidation

Supplier consolidation is intensifying competition and raising the bar for smaller players, who face challenges but also opportunities to differentiate and compete effectively.

Increasing Focus on Services and Solutions

Medtechs are uniquely positioned to become solution providers, addressing unmet customer needs and increasing “stickiness” with health systems. While competition to become preferred partners will be fierce, the rewards—especially in a consolidating provider landscape—justify upfront investments.

Evolving Commercial Models

Medtech companies must rethink customer engagement strategies, including innovative gain-sharing models and revised segmentation approaches, to better serve a shifting customer base characterized by increased administrative influence and evolving needs driven by accountability.

Pricing and Contracting Evolution

Medtechs must upgrade pricing strategies and contracting sophistication. Historically, the dominance of fee-for-service reimbursement allowed broad, low-discipline sales models, but this is no longer sustainable. Companies are increasingly adopting tiered pricing, re-evaluating GPO relationships, and prioritizing direct contracts with large health systems to improve margins and competitiveness.

The changing healthcare landscape presents substantial growth opportunities for companies that can successfully evolve. Medtechs must maximize returns from existing businesses while leveraging core competencies to unlock new growth avenues.

TNG’s expertise lies in helping medtech clients navigate these complex strategic choices through deep research, sophisticated analytics, and pragmatic execution. Our tailored service offerings encompass the full spectrum of growth strategy, supporting clients in identifying, evaluating, and pursuing the strategic options best aligned with their unique growth objectives and potential.

At TNG, helping clients grow their businesses and enhance shareholder value is in our DNA. We tailor our approach to your unique circumstances, bringing proven experience in identifying and executing the best growth strategies. Our MedTech practice covers all major product segments, including Consumables and Supplies, Medical Equipment, Procedure-Specific Devices, Healthcare IT, and Drug Delivery Devices.

Customer Segmentation and Targeting
With increasing consolidation and evolving provider models, medtech companies must differentiate between the needs of large, integrated payer-provider health systems and smaller, community hospitals. Larger systems often seek long-term strategic partnerships, while smaller hospitals tend toward transactional relationships. We help clients navigate this complex landscape using insights from our proprietary hospital systems database and our annual TNG Hospital study, enabling precise segmentation and targeting strategies.

Service and Solution Expansion

Today, medtech companies are expected to deliver not just innovative devices but integrated solutions that address clinical and operational challenges. These solutions combine products, services, and data, ideally with performance tracking linked to payment models. We help medtech clients expand their offerings across hospital departments (e.g., OR, pharmacy, lab) and care settings (e.g., ambulatory surgery centers), prioritizing unmet customer needs and defining the required technologies, services, and data capabilities. Additionally, we support the organizational transformation necessary to deploy these solutions effectively.

Commercial Model Optimization

Success in the modern healthcare environment demands a customer-centric commercial model aligned with evolving health system needs. We understand these evolving requirements and advise medtech companies across all development stages, helping them design organizational structures and commercial infrastructures that win in today’s market. This often involves redefining commercial roles and reallocating selling resources to maximize impact.

Pricing Strategy and Value Articulation

As healthcare shifts toward outcomes-based models, medtech pricing strategies must evolve accordingly. We assist clients in developing finely tuned pricing and value communication strategies, market by market. Our expertise helps you articulate product value, anticipate payer reactions, and craft pricing approaches that maximize market access and returns. Post-launch, we support ongoing value articulation and pricing optimization to sustain commercial success.

Transaction Support

M&A activity has accelerated, with companies pursuing expansion both within existing capabilities and into new “solutions” areas. TNG is a recognized leader in transaction support, having advised on over $120 billion in life sciences and medtech deals. We provide end-to-end support—from M&A and partnership strategy, acquisition screening, and commercial due diligence to negotiation assistance and post-merger integration. Our commercial due diligence on medtech targets is renowned for its rigor and responsiveness under tight deadlines.

Product and Market Evaluation

Accurate product and market evaluations are critical for confident decision-making, whether forecasting revenues, assessing potential acquisitions, or evaluating new market investments. Our disciplined approach combines quantitative analytics, qualitative research, and proprietary benchmarks to deliver reliable projections that inform asset prioritization, R&D allocation, and go/no-go decisions.