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Open Innovation in Medical Devices (Emerging Market Perspective) D. A. Prasanna Accelerating Pharma time-to-market, cost effectively Asia EuropeAmericas

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Sharing experience in Open Innovation This talk is based on my experience in the MedTech industry growing GE 100 fold in a decade in India through innovation as a Strategic Advisor to InnAccel, a MedTech Accelerator and In Ecron Acunova CRO bringing new devices to market faster

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Emerging Markets are attractive but need Affordable MedTech

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Affordability makes care accessible, expands market INDIA BRC USA BRC INDIA 1000 4000 2000 8000 2012 2025 Per capita GDP (2012 $) 50000 Pop: 1.7 bill PC GDP: $8,221 PC HC Spend: $822 Pop: 1.4 bill PC GDP: $3,183 PC HC Spend: $223 Pop: 1.7 bill PC GDP: $4,375 PC HC Spend: $459 Pop: 1.2 bill PC GDP: $1,535 PC HC Spend: $58 Pop: 313 mil PC GDP: $51K PC HC Spend: $8,895 Key: PC: Per Capita HC: HealthCare BRC: Brazil, Russia China Per Capita HC Spend estimated at 7% of GDP and 10% of GDP for India and BRC respectively in 2025

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Affordability is largely unmet in medical technology Medicines and doctors service have become affordable in emerging market MedTech remains unaffordable

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Affordable MedTech- A large economic opportunity I I USA BRC USA BRC INDIA 10 40 20 80 400 2012 2025 Per capita MT Spend 600 MT Spend: $120 B PC MT Spend: $381 MT Spend: $5.4 B PC MT Spend: $4.4 MT Spend: $42 B PC MT Spend: $30 MT Spend: $156 B PC MT Spend: $86 MT Spend: $36 B PC MT Spend: $21 MT Spend: $225 B PC MT Spend: $643 Key: PC: Per Capita MT: MedTech

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Emerging markets are Largely self pay markets High price sensitivity Large volumes Low per capita spends Large public health system Lack of skilled professionals Inadequate infrastructure Alternate care environments (~50% of babies in India are born at home today, necessitating new products for neonatal care - until they can get to a hospital)...fundamentally different for MedTech Innovators

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Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets.. -Henry Chesbrough Helps move mind-set beyond device cost & features to Affordable procedure for the Patient/Doctor Viable investment for the Hospital. Leading to a totally different Productor Process solution!

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Market Specific Affordable Products Solutions Transportation Auto-Rickshaw Affordable Road Conditions (congested roads) Appropriateness (often used by 1-2 pax only) Diagnostics Portable Ultrasound Defeatured version of Japanese design Clinical excellence at an affordable price Increased access via portability Look outside for ideas and integrate them with internal technology leading to a new product/solution for a new low-end market

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Innovative Affordable Solution Around Product Tata Motors has produced a $2,200 car, the Nano. Godrej & Boyce Manufacturing, has developed a $70 fridge that runs on batteries, known as the little cool

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Innovative affordable solutions around Process Aravind Eye Hospitals have reduced eye surgery costs by over 80% by applying standardization principles from McDonalds Narayana Hrudayalaya has made open heart surgery affordable (one tenth the cost in western countries!) while maintaining the same standards of reliability 3nethra is a screening device for 5 leading causes of preventable blindness and an algorithm to automatically screen patients; available at one sixth of equivalent devices in the market Exploit the frugal innovation culture to design and launch new products

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Innovation- in Clients Process & our Product Outcome in Clients Process What limits user to make procedure affordable to patient? Productivity? Shortage of professionals? Associated costs like consumables? Work within Space constraints? Service supplies bottleneck? Developing Product Product meets right need of market? Technology reducing cost? Manufacturing ? New Product speed to market Optimal regulatory pathway? Affordable solution needs open innovation

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Defining Market Specific Unmet Need If I had asked my customers what they wanted, they would have said a faster horse. - Henry Ford II Clinical observations through immersion observing not just a specific clinical situation but the entire cycle of care identifying the problem inherent in that situation / environment reshaping ones understanding of the problem into a need

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Innovation in clients process- Client Problem Innovative Solution Patient fee/scan low 14hrsX 7days working Need Breakdown fix