How to Thrive in the Cardiovascular Market: Trends and Strategies for MedTech Leaders

With a projected global market size of $107.77 billion by 2025[1], the cardiovascular market offers tremendous opportunities for growth and innovation and is amongst the most dynamic and competitive segments in the medical device industry. However, it also poses significant challenges for MedTech companies with shifting customer preferences, evolving care settings, increasing regulatory scrutiny and fierce competition from both established players and new entrants.

How can MedTech leaders navigate these complex market dynamics and position their companies for success? In this article, we’ll share some of the key findings from our recent cardiovascular research report, which benchmarks the performance and practices of leading cardiovascular companies across cardiology and vascular segments. We will also highlight some of the strategic priorities that MedTech leaders should consider as they optimize go-to-market (GTM) models and drive revenue growth in the cardiovascular market.

Cardiovascular Market Dynamics

The cardiovascular market is driven by several factors that create both opportunities and challenges for MedTech companies. Some of the most prominent trends are:

• Rise in AI/ML and connected products: Artificial intelligence and machine learning are becoming increasingly prevalent in devices such as pacemakers, heart failure monitors, and surgical robotics. These technologies enable more personalized and predictive care, as well as new business models based on data connectivity and subscription services. However, they also require new skills, additional capabilities from the sales force and new stakeholder engagement strategies.
• Increased demand for minimally invasive surgeries: Minimally invasive surgeries offer benefits such as reduced complications, shorter recovery times and lower costs for patients and providers. The global minimally invasive surgical market is expected to grow to $73.8 billion by 2028, with the transcatheter aortic valve replacement (TAVR) market alone expected to reach $8.47 billion by 2028. However, these procedures also pose technical and clinical challenges, as well as increased competition from alternative therapies and devices.
• High industry growth as a result of aging population: The aging population and the increasing prevalence of cardiovascular diseases create a high demand for cardiovascular devices and solutions. The World Health Organization forecasts that cardiovascular diseases are responsible for 17 million deaths annually and expects this number to increase to more than 23 million by 2030. However, this also means that MedTech companies need to invest in innovation and differentiation to capture market share and meet customer expectations.
• Procedure shift towards OBLs and ASCs: As technology advances and reimbursement models change, more cardiovascular procedures are shifting from hospitals to outpatient settings, such as office-based labs (OBLs) and ambulatory surgery centers (ASCs). These settings offer lower costs, greater convenience, and faster turnaround times for patients and providers. However, they also require different sales and marketing strategies, pricing and contracting approaches from MedTech companies.
• Shift in competitive landscape: While the cardiovascular market is still dominated by a few large companies such as Abbott, Boston Scientific and Edwards, there is also a growing presence of innovation-driven startups and mid-tier companies that offer niche products and solutions. These companies challenge the incumbents with their agility, creativity and customer focus. However, they also face barriers to entry including regulatory hurdles, clinical evidence requirements and market access challenges.

Commercial Model Benchmarking Themes

To understand how leading cardiovascular companies are adapting to these market dynamics, we conducted a comprehensive benchmarking study of 15+ business units and divisions across cardiology and vascular segments. We analyzed metrics such as sales expense, revenue, productivity, structure, compensation and performance. Some of the key themes that emerged from our benchmarking study were:

• High sales expense: The cardiovascular market is characterized by a high-cost, service-intensive sales model, which results in a sales expense to revenue ratio of 17%, compared to 11% for the overall medical device industry. This is driven by the high clinical intensity and complexity of cardiovascular products and procedures, which require significant investment in clinical specialists, training and support.
• Cardiology vs. vascular productivity differences: Within the cardiovascular market, there are significant differences in productivity and efficiency between cardiology and vascular segments. Cardiology companies have approximately $1M lower revenue per sales resource than vascular companies due to the higher sales expense and lower sales headcount of cardiology companies. However, cardiology companies also have higher gross margins and higher sales rep pay than vascular companies due to the higher value and differentiation of cardiology products.
• Clinical specialist support: The cardiovascular market has a high reliance on clinical specialists, who provide technical and clinical expertise and support to sales reps and customers. The average ratio of field sales reps to clinical specialists is 1.2, compared to 3.7 for the overall medical device industry. This reflects the high clinical intensity and complexity of cardiovascular products and procedures, as well as the need to ensure customer satisfaction and loyalty.
• Cardiology vs. vascular pay differences: The cardiovascular market also has significant variation in pay levels between cardiology and vascular segments, reflecting the differences in market size, growth and competition. Cardiology sales reps have 17% higher target total compensation and a more aggressive pay mix than vascular sales reps. This is due to the higher complexity and specialization of cardiology sales, as well as the higher gross margin and revenue potential of cardiology products.

GTM Strategy Priorities

Based on our benchmarking study and our extensive experience working with cardiovascular companies, we have identified some of the key GTM strategy priorities that MedTech leaders should consider to optimize their commercial models and drive revenue growth in the cardiovascular market. These include:

• Deploy new commercial roles for advanced products: As cardiovascular products become more advanced and connected, MedTech companies need to deploy new commercial roles and capabilities to effectively sell and support them. These include customer success teams, who ensure customer adoption and retention of data-driven solutions; revenue operations, who leverage data and analytics to optimize sales performance and efficiency; and omnichannel marketing, who engage customers across multiple touchpoints and channels.
• Validate (and improve) sales model ROI: Given the high cost of the cardiovascular sales model, MedTech companies need to validate and improve their return on investment (ROI) from sales resources and activities. This involves establishing business processes that evaluate sales model productivity, identify improvement areas and enable continuous optimization. For example, MedTech companies can use sales capacity planning, sales territory design, sales forecasting and sales compensation design to align their sales resources and incentives with their revenue goals and market opportunities.
• Optimize GTM launch to exceed revenue forecasts: As cardiovascular products become more innovative and competitive, MedTech companies need to optimize their GTM launch strategies to exceed their revenue forecasts and capture market share. This involves capturing voice-of-customer feedback and aligning messaging, defining precise targeting strategy within the available total addressable market (TAM) that aligns quantitative modeling with buyer personas, developing omnichannel GTM strategy, defining role responsibilities and aligning incentives.
• Adopt new business model for shifting care setting: As more cardiovascular procedures shift from hospitals to OBLs and ASCs, MedTech companies need to adapt their business model to suit the different needs and preferences of these customers. This involves sizing the non-acute market relative to acute, deploying specialist sales and marketing strategies on non-acute facilities that require different support than hospitals, and establishing pricing strategies that account for reimbursement differences in ASCs vs. hospitals.
• Traditional rep + clinical model evolution: The traditional cardiology rep + clinical specialist model is a high-cost model that relies on physician-to-rep relationship and product features. However, as cardiology products become more advanced and connected, and as more stakeholders influence the buying decision (such as IDNs, value analysis committees, and other clinicians), MedTech companies need to evolve their sales model to align with the changing customer journey. This involves adopting new roles such as associate reps, inside sales, and key account managers, who can provide more value-added and consultative selling to customers.
• Drive greater YoY growth focus with compensation plan progression: Leading cardiology companies have started shifting away from ramped commission plans and employee agreements to bonus formula plans for their sales reps. Bonus formula plans create greater incentive on year-over-year growth instead of maintaining large territories, enable greater territory balancing flexibility and alignment to pay level structure, and reduce administrative complexity and disputes.

Conclusion

The cardiovascular market’s substantial projected growth to $107.77 billion by 2025 underscores the vast potential for MedTech companies to innovate and expand. Success in this sector requires navigating a maze of challenges including evolving customer demands and stringent regulations.

[1] Global Cardiovascular Drugs Market Report (2021 to 2030) – Business Wire