1. 1. www.pwc.comOperating performance in the Medtech industry: Trends andimperatives October 2012
2. 2. 2PwCWith an era of high growth and profitability in the Medtech industry having given way to slower growth and flat profits, operating performance is becoming a critical driver of shareholder value for Medtech companies. This report describes PwCs Operating Performance Index for the Medtech industry, uses it to analyze trends in operating performance for the industry and its various segments, and explains how this approach can help Medtech companies identify which levers to pull to improve their operating performance. The medical technology industry faces challenges on many fronts. A sluggish economy and continued economic uncertainty have depressed demand for medical procedures and medical products. Increasing emphasis on healthcare cost containment, as well as the effects of healthcare reform in the United States, are raising questions about the overuse of medical technology and putting downward pressure on prices. Greater pressure to demonstrate clinical effectiveness and costeffective outcomes is raising the bar on medical innovation. Increasing regulatory approval requirements and scrutiny are contributing to higher uncertainty and cost of developing new products. In the United States, a new medical device excise tax is expected to have a significant financial impact on device manufacturers. All these factors have combined to introduce uncertainty and shifts in the Medtech industry and its ecosystem. High growth and profitability have given way to slower growth and flat profits, and total shareholder returns for Medtech companies have been declining over the last few years. It appears that the industry is transitioning from the growth stage to a more mature stage of its life cycle. In this environment, Medtech companies must consider a fresh approach to creating shareholder value. Although there are many drivers of shareholder value, operational excellence is a critical one in maturing industries. PwC has therefore created an Operating Performance Index (OPI) to better understand industry trends and identify operational levers that Medtech companies can pull to improve shareholder returns (see Sidebar 1 for details of the index). The OPI incorporates several key operational drivers that can be analyzed using publicly reported data. Drawing on such data, we have analyzed the performance of 56 global Medtech companies over the period 20052011.1 Our analysis offers insight into performance trends in the overall Medtech industry, in key industry segments (both over time and comparing segments with one another), and among individual companies. In particular, it elucidates: Differences among segments in this diverse industry; Benchmarks and peer-performance measures for individual companies to compare their performance with others and set high-impact improvement targets; Unused or underutilized opportunities for improving operating performance and driving shareholder value.Sidebar 1: PwCs Operating Performance Index (OPI) PwCs Operating Performance Index (OPI) for the Medtech industry is a weighted composite of three primary and seven secondary metrics for operating performance. These metrics, drawn from publicly reported data, represent key operational drivers of total shareholder return. We evaluated several metrics often considered to be key indicators of operational performance and ran a series of multivariate regressions to determine the correlation of each candidate metric with total shareholder return. The metrics selected for the OPI were chosen to cover different areas of a firms business operations and were weighted based on the strength of these correlations. The metrics were defined such that high values correspond with high levels of operating performance. The components of OPI and their definitions are: OPI Metric Primary MetricsDescriptionRevenue Growth Rate Annual Revenue Growth Rate Operating Profit Invested Capital ProductivityReturn on Invested CapitalAsset ProductivityRevenue / Property, Plant & EquipmentLabor ProductivityRevenue / EmployeeGross Margin(Revenue Cost of Goods Sold) / RevenueSG&A EffectivenessRevenue / Selling, General & Administrative ExpenseInventory ManagementInventory TurnsWorking Capital ProductivityReturn on Working CapitalR&D ImpactSecondary MetricsLast Twelve Month EBITDA MarginAnnual Revenue Growth Rate / (R&D/Revenue)Using data from a population of 56 leading public companies in the global Medtech industry, the OPI compares the performance of a company with the population on a scale of 0 to 100. This enables analysis of the Medtech industry as a whole, of particular segments of the industry, and of individual Medtech companies along the following dimensions: Industry performance over time Segment trends over time Segment performance relative to other segments Company performance over time Company performance relative to peers1 Source: S&P Capital IQ, PwC analysis
3. 3. 3Operating performance in the Medtech industry: Trends and imperativesOn most dimensions measured by PwCs OPI, operating performance in the Medtech industry has held relatively steady over the period 20052011 (Exhibit 1 shows the annual trend for each OPI element over this period). However, there is notable change in some OPI elements. For example, revenue growth rates have been declining significantlyat a rate of approximately 12% per year. Average growth rates dipped into single digits during the recession and, as of 2011, revenue growth has failed to return to pre-recession levels (see Exhibit 2). PwCs analysis also shows that revenue growth rates among industry leaders and laggards are converging as growth rates slow overall. Although revenue growth rates have been declining, our analysis shows that Medtech companies have maintained R&D investment at fairly steady levels as a percentage of revenue. This has resulted in a significantly declining trend in R&D impact, at a rate of 10% per year (seeExhibit 1). Although top-line growth has been slowing, the industry has managed to achieve modest gains in operating profitability over the last seven years (with the trend in operating profit showing improvement at an average annual rate of 2%). This suggests that Medtech companies are working to manage costs and continuing to become more efficient. One area of operating performance in which the industry demonstrated significant improvement in 20052011 is labor productivity, as revenue/employee increased at an average annual rate of 8%. Asset productivity has shown modest gains, reflecting an increased focus on efficiency. Gross margins in the industry have remained essentially flat. This indicates that companies have been able to reduce their cost of goods sold (COGS) to maintain gross margins amid the pricing pressures of recent years. In other elements of OPI, however, industry performance has shown a slightly declining trend. These elements include invested capital productivity; selling, general & administrative expense (SG&A) effectiveness; inventory management; and working capital productivity. As industry growth rates slow, these areas represent opportunities for improving cost structures and operating performance.Exhibit 1: Industrywide Trends in Operating Performance, 20052011OPI ElementAnnual Trend Relative to 2005 BaselineRevenue growth rate-12%Operating profit2%Invested capital productivity-2%Asset productivity2%Labor productivity8%Gross margin1%SG&A effectiveness-1%Inventory management-1%Working capital productivity-1%R&D impact-10%Exhibit 2: Revenue Growth Rates, 20052011 70% Annual revenue growth rateKey industry findings60% 50% 40% 30% 20% 10% 0% -10%2005 Top 1020062007 Average20082009Bottom 1020102011
4. 4. 4PwCKey findings about industry segmentsSidebar 2: Segmenting the Medtech industryPwCs OPI shows wide variations in operating performance trends among Medtech industry segments over the period we have examined. (See Sidebar 2 for segmentation methodology and definitions). As shown in Exhibit 3, the highest-performing segments currently are in vitro diagnostics (IVD), implantable devices, and diversified life sciences. The implantable devices segment was the clear leader in 2005 but has been declining gradually since then and has lost its edge over other industry segments. The IVD segment, on the other hand, has steadily improved to become the leading segment. Diversified life sciences, meanwhile, has remained fairly stable. Operating performance in medical consumables had begun to decline even prior to the recession but has since regained lost ground. Medical equipment, which was achieving stable operating performance prior to the recession, suffered the sharpest drop of any segment during the recession, but has since rebounded.The Medtech industry is highly diverse and can be segmented in various ways for different purposes. For example, segmentation by disease states and intended use of medical products is useful when looking at commercial markets and top-line opportunities. However, segmentation based on the characteristics of products and associated business operations yields greater insight into cost structure and bottom-line performance, as companies making similar products face similar operating and regulatory challenges. When thinking about the industry from an operating perspective, we find it useful to segment it in the following way:Exhibit 3: Medtech Segment OPI Scores, 20052011Segment OPI Scores75 65 55 45 35 25 15200520062007200820092010In Vitro DiagnosticsMedical ConsumablesMedical EquipmentImplantable DevicesDiversified Life Sciences2011 In vitro diagnostics (IVD): Products used to diagnose or monitor medical conditions via non-imaging technologies. These products typically include a combination of low-volume equipment (software-enabled electromechanical instruments, sometimes with fluid-handling capabilities and various detection technologies) and high-volume single-use reagents. Medical consumables: Single-use, disposable medical devices such as general medical and surgical supplies, hospital consumables, catheters, and wound care products. These products tend to have relatively low regulatory requirements, high-volume manufacturing, and low gross margins. Medical equipment: Reusable equipment used for diagnosis, monitoring, or treatment of medical conditions (e.g., medication delivery, patient monitoring, sterilization, hospital/ OR instruments and furniture, and imaging technologies such as MRI and CT scans). These products typically include a significant electronics component. They may be coupled with software, complex fluidics, mechanics, biochemical sensors, and/or radiation sources. Regulatory hurdles vary from quite high (e.g., for oncology treatment) to relatively low (e.g., for hospital beds). Implantable devices: Products used to treat various medical conditions via implantation in the human body (e.g., orthopedic implants, spine implants, stents, pacemakers, and ICDs). These products are the most highly regulated of any Medtech products and typically have high gross margins. Their manufacture often requires special materials and is laborintensive and complex. Diversified life sciences: Large companies offering a diversified set of medical products including biopharmaceuticals, medical devices and diagnostics, and drug-device combination products. Companies often make a variety of products within the healthcare industry. In most such cases, we assigned a company to a segment based on the product category from which it gets the most revenue. We also categorized as diversified life sciences a handful of companies that could not be classified on the basis of one dominant source of revenue. Owing to lack of publicly reported data, we excluded from our analysis non-public companies (i.e., privately held or owned by private equity firms) and the Medtech business units of conglomerates that are diversified well beyond life sciences.
5. 5. 5Operating performance in the Medtech industry: Trends and imperativesMedtech Industry Segments and Companies Analyzed In Vitro DiagnosticsMedical ConsumablesMedical EquipmentImplantable DevicesDiversified LifeSciencesAlere, Inc.Becton, Dickinson andCo.CareFusion Corp.Biomet, Inc.Abbott LaboratoriesBioMerieux S.A.Coloplast A/SCarl Zeiss Meditec AGBoston Scientific Corp.Allergan, Inc.Gen-Probe, Inc.CR Bard, Inc.ConmedEdwards LifesciencesCorp.Baxter International, Inc.Illumina, Inc.DENTSPLY International, Inc.Dragerwerk AG & Co. KGaAIntegra LifesciencesBayer AGLife Technologies Corp.ICU Medical, Inc.Elekta ABMedtronic, Inc.Covidien plcQiagen NVMerit Medical Systems,Inc.Getinge ABSmith & Nephew plcFresenius SE & Co KgaASysmex Corp.Paul Hartmann AGHill-Rom Holdings, Inc.Sonova Holding AGHospira, Inc.Teleflex IncorporatedHitachi Medical Corp.Sorin SpAJohnson & JohnsonTerumo Corp.Hologic, Inc.St. Jude Medical, Inc.Roche Holding ACThe Cooper Companies,Inc.Intuitive Surgical, Inc.Stryker Corp.Invacare Corp.Synthes, Inc.Mindray Medical InternationalZimmer Holdings, Inc.Nihon Kohden Corp. ResMed, Inc. Sirona Dental Systems, Inc. Steris Corp. Varian Medical Systems, Inc. William Demant Holding A/S
6. 6. 6PwCExhibit 4: Revenue Growth Rates by Segment, 20052011 Annual revenue growth rate40%In terms of operating profit (see Exhibit 5), implantable devices (which has exhibited strong performance in this category since 2005) and IVD (which has improved dramatically over this period) lead the pack. Exhibit 5: Operating Profit by Segment, 20052011 35% Operating profit margin %Our analysis of annual revenue growth by segment (see Exhibit 4) shows that the challenges in achieving revenue growth in the industry are being felt in every segment, none of which has been able to return to pre-recession growth levels. The sharpest drops in growth rates have occurred in segments requiring high levels of capital investment, i.e., IVD and medical equipment. We also find that revenue growth began to slow in medical consumables and implantables even prior to the recession. Although there was wide variation in the growth rates in the different segments prior to the recession, all segments have converged around single-digit growth rates since the recession.30% 25% 20% 15% 10%35%20052006200720082009201030%In Vitro Diagnostics25%Medical EquipmentImplantable Devices20%2011Medical ConsumablesDiversified Life Sciences15%Overall, our analysis of operating performance over time across all five segments of the Medtech industry yields these key insights:10% 5% 0% 200520062007200820092010In Vitro DiagnosticsMedical ConsumablesMedical EquipmentImplantable DevicesDiversified Life Sciences2011 The implantable devices segment has been the most consistent top operating performer relative to other segments, driven by significantly higher gross margins. This advantage is declining, however, likely due to the maturation of the cardiology and orthopedic implant markets (both of which have been characterized by low growth and reimbursement challenges) and changes in purchasing dynamics and buyer behavior. The implantable devices segment also has the highest SG&A expenses (due to a high-touch sales model) and fewest inventory turns (due to the practice of maintaining large field inventory to support high service levels). Although this segment continues to enjoy the highest profitability, its invested capital productivity has been declining steadily. The IVD segment has shown the most improvement, and become a leader in operating performance since 2006, driven by rapid growth. The growing importance of molecular diagnostics and personalized medicine plays a key role. Rapid operating profit improvements and steady improvements in many areas of cost management and operational efficiency have also helped drive the
7. 7. 7Operating performance in the Medtech industry: Trends and imperatives Operating performance in medical consumables has consistently lagged behind the rest of the industry, although the gap has closed in recent years with improvement in segment performance after the economic downturn. This segment continues to show low operating profit and low revenue growth relative to others. The segment also ranks among the lowest in several dimensions of overall efficiency, exhibiting, for example, the lowest gross margins, poor inventory management, low asset productivity, and labor productivity that is significantly lower than that for othersegments. Medical equipment companies have been hit hardest by the economic downturn. Although efficient compared with other segments (with strong labor and asset productivity performance and leading inventory management performance), the medical equipment segment has been hurt by its customers difficulties in accessing funds for capital investments. This problem is evident in the sharp drop in growth rates for medical equipment companies. The diversified life sciences segment has been relatively stable over the years compared with other segments, likely due to its diverse product portfolio. The variation in the operating performance of Medtech business units was apparently mitigated by the performance of biopharmaceutical and other business units in these companies. This segment tends to have both high gross margins and high operating profit. Although it ranks lowest in the industry in asset productivity, the diversified life sciences segment has leading performance in invested capital productivity, labor productivity, and SG&Aeffectiveness.Key findings about company performance Amid these segment trends, how successful have individual Medtech companies been in improving their operating performance? Analyzing the trends in operating performance over the 2005-2011 time frame (see Exhibit 6), we find that each segment has improvers, decliners, and steady performers, but the mix varies according to segment. For example, nearly 70 percent of the companies in the medical consumables segment have shown improvement. On the other hand, only about one-third of the companies in the diversified life sciences segment and one-fourth of the companies in the implantables segment have been improvers, while over 40 percent of the companies in these segments have been declining. This shows that different companies are able to achieve widely different levels of operating performance amid the same environmental context and macro trends. Exhibit 6: Company Operating Performance over Time Percentage of companies with improving, steady, or declining OPI, 20052011Percentagesectors OPI performance. Note that most of the large IVD companies are business units of diversified life sciences companies or well-diversified conglomerates, which are excluded from our IVD segment. Consequently, this segment has smaller companies than the others, which may help account for its high growth rates.100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%29%33%70% 33%33%25%22%33%44%42%71% 20%33%10% Medical In Vitro consumables diagnostics DownSteadyMedical Diversified Implantable equipment life sciences devices Up
8. 8. 8Two leaders in operating performance Intuitive Surgical Intuitive Surgical, a medical equipment company, is the global leader in the rapidly emerging field of robot-assisted, minimally invasive surgery. Since its founding in 1995, Intuitive has achieved consistent and rapid growth along many dimensions: revenues, system installed base, types of surgery for which the system is used, procedure volume, geographies, and profitability. Year-overyear revenue growth rates over the period 20052011 have ranged from 20% (in 2009) to 64% (in 2006). Intuitives revenue growth has been driven, in part, by its multiple revenue models: with its da Vinci Surgical System, the company derives revenues from system sales, per-procedure sales of instruments and accessories, and annual service contracts. (Recurring sales of instruments and accessories and annual service contracts accounted for 56% of 2011 revenues from the da Vinci system.) The company has also invested heavily in clinical studies to demonstrate the effectiveness of its products, and in surgeon education to facilitate adoption. Consistently ranking number one in operating performance in the Medtech industry, Intuitive has exhibited leading performance and steady improvement in OPI from 81.7 in 2005 to 91.8 in 2011 (on a scale of 0 to 100). It has shown a rare combination of high growth and increasing operating profitability (from 32% in 2005 to 41% in 2011). In addition, Intuitive has achieved a steady or, in some cases, dramatic increase in several elements of the OPI during this time framefor example, in invested capital productivity (from 11.3% to 18.6%), asset productivity (from $4.4 to $8.9 in revenue per dollar of PPE assets), labor productivity (from revenues of $543K to $913K per employee), and gross margin (from 67.5% to 72.5%). This consistent and stellar performance has been recognized by the market and Intuitives stock price has risen from $18 to $511/share in the last ten years. Illumina, Inc. Illumina is a global IVD company that develops innovative arraybased solutions for large-scale analysis of genetic variation and function. It has consistently been among the top performers on the OPI, with average annual revenue growth of 64%, average EBITDA margins of 25%, and average gross margins of 67% for the period 20062011. Analysis of Illuminas performance across a variety of factors reveals a clear theme: consistent growth with a focus on operational execution. Illumina invests more in R&D than many peers and has developed leading technological capabilities in a nascent market, driving significant revenue growth. Illumina management has demonstrated a unique ability to connect the dots between market strategy, disciplined product development operations, and a relentless focus on corporate renewal through both organic innovation and tuck-in acquisitions. Illumina has also worked to diversify revenue sources by, for example, creating a services business targeted at the diagnostics market. Illumina, which sells capital equipment (and disposables), has a significant number of customers who are dependent on federal funding. Recent turmoil in the financial markets and cuts in federal spending have therefore affected the companys results. With a continued focus on operational excellence, however, Illumina has been able to launch a new platform, reduce inventory, increase gross margins, and build backlog.PwCCompany performance on the OPI also enables us to identify industry and segment leaders and laggards in overall operating performance. The top 10 companies we analyzed had OPI scores in 2011 ranging from 91.8 to 59.7 on a scale of 0 to 100, while the bottom 10 had scores ranging from 32.6 to 16.2. The individual components of the OPI also help indicate what leaders are doing that laggards are not. In particular, industry leaders display strong gross margin performance and high operating profits. They have also achieved operational improvements in asset productivity and labor productivity indicating a highly efficient operating modeland are achieving better-than-average revenue growth despite the challenges of the environment. What laggards have in common are low revenue growth, weak gross margin performance, and poor operating margins.Four key levers for improving operating performance Exhibit 1 showed overall Medtech industry trends for different elements of operating performance over the 2005-2011 time frame. The industry performance results have been mixed. The performance of leading Medtech companies in recent years shows that despite a sluggish economy, pricing pressures, turmoil in the financial markets, and other adverse factors, it is possible to improve operating performance in some areas and drive shareholder value. At the same time, high margins relative to other industries, strong growth, long product life cycles, and the high barriers to entry that the industry has enjoyed in the past have caused many Medtech companies to focus less on operating performance than they otherwise might have, and therefore to lag behind firms in other industries in adopting leading business-improvement practices. With the outlook for the industry still uncertainowing to both the economy and the still unknown impacts of healthcare reform in the United StatesMedtech companies must respond with new strategies, business models, and capabilities. In the near term, four key levers for improving operating performance should be the focus:
9. 9. 9Operating performance in the Medtech industry: Trends and imperativesBroaden innovation. A changing healthcare ecosystem (characterized by, for example, shifts in pricing power from device manufacturers to healthcare providers, and increasingly sophisticated customers demanding total solutions) means that Medtech companies must develop new offerings catering to new ecosystem needs. In the past, innovation in the Medtech industry has had a relatively narrow scope, being largely technology driven, product based, and physician focused. In the future, Medtech companies will need to take a broader view of innovation. With the growing emphasis on healthcare costs and quality, new product innovation may become less important than, for example, clinical effectiveness, improved patient outcomes, and/or improved healthcare efficiency. In other words, Medtech players must address the needs of a broader set of stakeholders including, healthcare providers, payers, and patients, and innovate around new business models and a broader set of offerings including, products, associated services, and data/information management2. Move up the productivity curve. With an average operating profit improvement rate of 2% per year, the Medtech industry has made slow but steady progress in operating profitability over the period 20052011. Yet with increasing pricing pressures, slowing growth, and threats to profitability such as the impending medical device excise tax in the United States, it is imperative for Medtech companies to keep taking cost out of business operations and/or out of products in order to protect their profit margins. Our analysis shows that several operational performance measures, such as gross margins, SG&A effectiveness, inventory management, and working capital productivity, have remained essentially flat over the last seven years. All of these areas represent significant opportunities for improvement. Medtech companies can learn from other operationally efficient industries (such as high tech, consumer electronics, automotive, and industrial technologies) and adopt their most successful practices3for example, value engineering and strategic sourcing practices to improve gross margins, or outsourcing to leverage external partners and capabilities and make their cost structures more variable. Medtech companies can increase the efficiency of their supply chains and implement leading practices to improve working capital and inventory management performance. They can also improve their sales operations and reduce indirect expenses to drive SG&A effectiveness.Transform the go-to-market model. The ongoing, transformational changes in the healthcare ecosystem are having a significant impact on how medical devices are bought and paid for. Medical device buyers are consolidating, resulting in greater buying power. The influence of physician preference is eroding even as new requirements for public disclosure of physician relationships are being put in place. Meanwhile, healthcare delivery and payment models are evolving from fee-for-service to value-based systems4. These factors are creating new decision makers and buying criteria while also creating greater diversity across the customer base. Savvy Medtech companies are therefore finding opportunities to help shape decision processes and even change the basis of competition in this new environment, while also focusing their sales and marketing budgets on what are now the critical segments of their markets in order to improve effectiveness. Revitalize growth strategies. As industry growth in developed regions slows and markets mature, Medtech companies must explore new avenues for growth. Emerging markets offer one set of opportunities for expansion. They provide greenfield opportunities for serving large and growing populations as well as access to talent and capabilities, often at significantly lower costs (for example, for manufacturing, R&D, and other operational areas)5. Developing new markets while under pressure to improve SG&A effectiveness often requires Medtech companies to shift spend from traditional markets toward new and growing markets. (Several leading Medtech companies have already established significant footprints in emerging markets and are enjoying growth rates of 2030%.) Companies are also considering a variety of inorganic growth strategies. While traditional acquisition and integration strategies are common, more creative strategies include open innovation, corporate venturing, co-development through partnerships and alliances, and a variety of in-/out-licensing approaches. While some large Medtech companies already employ a mix of these strategies, we expect a continued increase in these activities as the industry matures and organic innovation becomes more difficult.2 Christopher Wasden and Brian Williams, Owning the Disease: A New Business Model For Medical Technology Companies, In Vivo: The Business and Medicine Report, December 2011 3 Michael Blanchette, Linda Meloro, and Prashanth Prasad, Surviving the Cost Pressure Cooker, Medical Device and Diagnostics Industry, March 25, 2011 4 PwC, Unleashing value: the changing payment landscape for the US pharmaceutical industry, PwC Health Research Institute, 2012 5 PwC, Medical Technology Innovation Scorecard: The Race for Global Leadership, 2011 and Axendia, Inc., Walking the Global Tightrope: Balancing the Risks and Rewards of Med-Tech Globalization, 2012
10. 10. 10Deciding where to begin Improving operating performance over so many different dimensions obviously represents a tall order for Medtech companies that have not had to focus on such areas in the past. How to begin making the necessary improvements? The first step for Medtech companies wanting to improve their operating performance is to baseline and benchmark against peer companies in the industry and in their own segment. OPI provides a useful framework for evaluating the different dimensions of operating performance. The primary OPI metrics (revenue growth, operating profit, and invested capital productivity) provide measures of overall operating performance. Secondary OPI metrics can be used to establish benchmarks and identify performance gaps and opportunities for improvement in operational areas such as innovation and product development, operations and supply chain management, customer service and sales operations, and asset and labor productivity. An OPI-based review enables a rapid but broad evaluation of operating performance that can help to identify significant challenges and opportunities for improvement and help a company determine which levers it needs to pull to get significant gains in operating performance. With an understanding of where operating performance stands most in need of improvement, management can begin digging deeper into these areas to determine what, in particular, is inhibiting better performance and where to target initiatives for change. If revenue growth, for example, is an area where baselining and benchmarking point to a need and opportunity to improve, and R&D impact is low, a company can investigate why it is not getting more bang from its R&D spending. If the OPI-based review also shows that SG&A effectiveness is low relative to other companies in the same segment, management can begin asking how it can use its sales force more effectively in the changing industry environment. Similarly, if profitability is shown to be an area where a company lags behind industry peers and competitors, executives can dig deeper into OPI elements such as asset and labor productivity and gross margin to discover where and how to take out costs. In an environment that is likely to remain difficult and uncertain for years to come, the difference between winners and losers in a mature Medtech industry will increasingly come down to the basics of operating performance. OPI provides a convenient framework for identifying key challenges and opportunities for companies to improve operating performance and drive shareholder value.PwC
11. 11. pwc.com/us/pharma pwc.com/us/medtechAbout PwC PwC United States helps organizations and individuals create the value theyre looking for. Were a member of the PwC network of firms in 158 countries with close to 169,000 people. Were committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/us.Acknowledgement We wish to acknowledge the important contribution that Michael Blanchette made to the development of this report.Contacts Sharad Rastogi, Principal +1 (617) 530 4726 sharad.rastogi@us.pwc.com Thomas Kozy, Director +1 (847) 430 9059 tj.kozy@us.pwc.comMichael Swanick, Partner US Pharmaceuticals, Medical Devices, and Medical Technology Leader + 1 (267) 330 6060 michael.f.swanick@us.pwc.com Attila Karacsony, Director +1 (973) 236 5640 attila.karacsony@us.pwc.com 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved.)PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.NY-13-0137