The Future Operating Model for the NHS aims to save £615,000,000 each year. The changes that it will make to the landscape of the NHS will mean major changes to the way medical device sales people operate. When we surveyed our connections in the space for our UK Surgical Devices Market Trends Report it was a topic that came up time and time again when discussing the biggest changes happening in the market.
What is going to change?
- The percentage of the NHS’ £5.7bn spend on consumables and capital equipment that goes through the NHS supply chain will increase from 40% to 80%
- Procurement spend will be split into 11 category towers – medical, capital and non-medical
- The procurement towers will have ‘intelligent client coordinators’ acquiring the right products to meet the needs of clinicians and patients
- The FOM will ‘make the most of’ the huge buying power of the NHS by aggregating national demand, giving them more flexible buying power
- A move to specialist providers will result in preferred suppliers and a ‘star rating’ catalogue of products to help inform purchasing decisions
- Increased transparency in pricing structures so that prices are the same across the UK
These factors will undeniably influence surgical device companies and the way sales representatives will go about selling their products.
How will it affect surgical device companies?
Pricing structure: Prices of medical devices will need to be fixed in order to drive the transparency that the OM is hoping to achieve. Rather than being able to give discounts for large orders, or even for loyalty, companies will now need to set their prices to be competitive but simultaneously attractive to the procurement boards. They want to ensure they don’t price themselves out of the market. It’s worth noting that ‘value for money’ isn’t purely talking about cash – it’s about quality too.
Specialist providers: Companies in the space will want to push to become a specialist provider for the NHS. The previous process was complex and put smaller companies off pursuing it. The standardisation of the process may help these companies who have good products at good prices to get on the list. This does, however, mean more competition for the larger companies who previously dominated.
How will it affect surgical sales representatives?
Who they’re selling to will change: 45% of people we surveyed said that they thought procurement in the NHS will have the biggest impact on surgical sales. Before the implementation of the new Operating Model, many sales reps sold directly to the surgeons themselves. Over years of selling to them they’ll have gained a rapport and will be able to influence the surgeons themselves to buy their company’s products. Instead, sales reps will find themselves selling to procurement boards who present an entirely different process and challenge.
It’s a longer process: Selling a surgical instrument straight to the surgeon was a simpler process. Due to the changes brought by the operating model there will be more hoops to jump through to sell, and the approach will need to change to suit. Ultimately the product and its value for money takes precedence over the personality of the sales person and the relationship they may have had with surgeons.
Want to know more?
To find out more about how the changes to the NHS will affect the surgical devices market, as well as insight into other market trends, you can download the UK Surgical Devices Market Trends Report 2018 for free here.