The medical device industry continues to fall behind pharmaceuticals when it comes to DTC strategy. As a result, companies throughout the industry are increasing focus on television advertisements, as well as social media and digital marketing. In the U.S. alone, data shows that companies like Abbott Laboratories and Medtronic have spent over $300 million each year since 2018.
Rising DTC Investments
Companies throughout the industry continue to embrace DTC practices, following the precedent set by many diabetes tech brands. In 2017, Boston Scientific began its DTC investment, airing a commercial for its Watchman heart device. Between 2018 and 2020, Insulet increased its yearly DTC spending from around $500,000 to over $7 million. Most recently, Dexcom aired a Super Bowl commercial featuring Nick Jonas.
Between 2011-2019, researchers found that 21% of digital health companies in Rock Health’s Digital Health Funding Database were investing in DTC practices. Several companies have also recently gone public to increase funding, such as GoodRx Holdings Inc. and Hims & Hers Health Inc.
One key factor influencing medical device companies in pursuing DTC strategy is the increasing consumer desire for involvement in their own health. By incorporating DTC marketing, companies can raise awareness and engagement while reaching consumers first-hand. This strategy allows brands to engage consumers from the beginning, prompting them to inquire about new products and different options with their physicians.
This involvement amongst consumers has grown exponentially in the past few years. While the COVID-19 pandemic placed hyper focus on health and well-being, consumers have already shown interest in their own health through the rise of wearables. Data shows that 30% of consumers in the US are using wearables, and 75% of users feel that wearables increase engagement with their health. Wearables are tech devices designed for fitness and wellness purposes, such as the Apple Watch, Fitbit, and Oura ring. Providing consumers with the ability to monitor and track their own health, tech companies have more opportunities to leverage DTC strategy.
DTC Challenges: Merging Big-Tech and Medical Devices
The medical device market in the U.S. accounts for 40% of global sales, expected to reach $208 billion by 2023. With this vastity, several challenges will arise while companies branch into DTC. Traditionally, medical devices are not marketed towards consumers but physicians. In shifting focus towards the consumer directly, brands must further explain the details of each product. Whether it be how a product was tested or who it was tested on, specificity in product performance and abilities is essential. Direct to consumer engagement will be something available only in the US and few other select markets and heavily scrutinized to ensure compliance standards are met by the medical device company.
As previously mentioned, tech giants like Apple and Amazon continue to build in the med-tech space. With these tech brands branching into the medical device industry, the line continues to blur. However, these tech-focused brands are met with heightened scrutiny, as well as safety regulations and standards from the FDA. Regardless, traditional medical device brands are forced to reevaluate and revamp current strategies to maintain their influence in the industry.
With more companies investing in DTC and increasing pressure from big-tech brands, the medical device industry must remain agile and innovative in its strategies. As rising investments, consumer involvement, and big-tech products drive companies to expand into the DTC market, leveraging an effective approach will be critical to success.
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Contributions by Rachel Ruth