The medical device industry is boring. It doesn’t innovate. And that, rather than government austerity, is why companies continue to face falling margins. Before you write that off as a conclusion coming from an outside consultant, consider that it comes from one of the industry’s major figures: Smith & Nephew ($SNN) CEO Olivier Bohuon.
Bohuon, CEO since April 2011, tells Financial Times that the industry should essentially stop whining about government cutbacks in funding for health-related services, and blame itself for not coming out with state-of-the-art, game-changing products that can transform the delivery of health care for the better, and perhaps even reduce health care costs in the long run.
“When we talk about price erosion–3% to 4%–many people are blaming this on government austerity measures, but they are wrong,” the Financial Times quotes Bohuon as saying. “What is happening is that we as an industry are not bringing in enough innovative products to get higher prices…Innovation is the bread and butter of this business.”
Read more: Smith & Nephew CEO: Lack of innovation begats plunging industry margins – FierceMedicalDevices http://www.fiercemedicaldevices.com/story/smith-nephew-ceo-lack-innovation-begats-plunging-industry-margins/2012-05-15?utm_campaign=twitter-Share-NL#ixzz1v3EojIbU