Selling MedTech Start-Up products through a big organization's sales channels

Proposal of a simple 3-step framework

Post-merger integration is an extremely interesting and difficult subject in medical technology. It has a lot to do with the relevance of MedTech start-ups for the advancement of healthcare. There are many treatments which are not fully established, are lacking reimbursement or the medical community is just too divided about the right treatment algorithms. There is also the other extreme: Treatments which are well reimbursed and accepted but whose enabling technology has not significantly changed in decades due to a somewhat comfortable stage for patients, healthcare providers and insurers - sometimes for a lack of knowledge or economical incentive to look for something better.

In short: MedTech start-ups are a crucial part in advancing healthcare. They take on a lot of risk which big, established companies are not ready to take on in their own R&D departments. Now more than before the macro-economical turmoil of the past couple of years, have strategic investors (e.g. giant publicly traded companies of the likes of BD or Novartis) become vital to providing the start-up technology a harbour to flourish in commercialization.

This is when post-merger integration comes into play. Integrating an acquired start-up and their technology into an existing organization is difficult. What I want to focus on is the commercial side of this endeavour: Selling an externally, start-up-developed technology through an established, internal sales force.

If you were wondering: Here is where this article becomes more specific :)

Many established medical device companies acquire start-ups for their products or technology, because they feel this technology can be successful in the market or because it complements their portfolio to realize additional added value. The rest is highly depending on how far out the tech is from being commercialized, but for the sake of argument, let's assume our product is ready to go to market right as we acquire it.

There are many options available now: Let's say the acquired tech complements your portfolio, giving your commercial team the workflow they have been aching for for so long. But they might not know this technology well, it might have a different UI or it might not be as smoothly integrated to the rest of the portfolio as you had hoped. Your sales force will certainly not like that one bit. Or you lack the necessary infrastructure for the technology, e.g. trained 1st level service teams or a robust supply chain.

You see, there are countless possible difficulties. If any of these occur, you can be sure that you sales force will not embrace the new technology but will focus on what sells easier. On top of that you can be sure that the founders of the start-up will be in your neck, asking you what you problem is, since they know the product and its capabilities so well.

What I want to propose here is a simple framework for this kind of situation to determine, if/when an acquired technology is fit to go on sale through your established sales force:

1) Your default should be to bring the tech to market but via a 100% dedicated sales force

This team, let's call it "Tiger Team" is working with your local organizations but is not reporting into them. Ideally the Tiger Team consists of a few reps of the start-up team and a few existing reps. You are looking for technically savvy hunters more than for account managers. This setup will help you learn a lot about the technology and you will build a team of very knowledgeable experts. At the same time this model avoids for the technology to just fall under the table because the existing sales force might be (rightfully) incentivised to go after the sale which nets the most revenue for the current quarter. We all also tend to naturally sell what is easiest for us to sell. It is never the newest thing with which we have the least experience.

2) You should only break up the Tiger Team and hand over to the established sales force, when:

• Least strong sign to break: Your Tiger Team has established a customer base which is significant enough for the existing established sales force to care about their business

• Strong sign to break: A strong majority of your existing sales force is consistently screaming for the new technology to be part of their portfolio to sell. I'm talking about reps here, not sales directors.

• Best sign to break: Customer demand is so great, your Tiger Team would need to grow to a size which is not viable anymore in comparison to the existing sales force

3) Launch market by market

Do not fall into the trap of believing the success in one market is a guarantee for success in another market. Each reimbursement system is different and you have a differently skilled/experienced sales force everywhere. Go market by market to avoid costly mistakes.

---

Let me know what you think and what your experiences have been, bringing acquired technologies to market! Please also let me know if you have feedback or criticism about my proposed framework.