Medtronic is combining its U.S. cardiac and vascular group sales as of May 1, and David Roberts, the company's former VP of sales for the Cardiac Rhythm Disease Management business, will take the helm of the new 2,700-person organization. The move comes in response to challenges hospitals are facing in the changing healthcare environment, as well as the increasing importance of the hospital administrator as a decision maker in device selection, according to the company.
The recent economic downturn and healthcare overhaul rules have pressured hospitals, which are trying to save on costs. They also have been buying doctors' practices, something that waters down devicemakers' ability to leverage relationships with product-choosing doctors, the Wall Street Journal notes.
The two current business groups operate across 15 cardiovascular market segments and maintain leading market share positions in nearly all of them, the company says in a statement.
"[O]ur strategy going forward is to leverage Medtronic's breadth of talent, technologies, products and services across our 15 market segments to help hospital administrators address their unmet needs, while maintaining and strengthening our ability to serve clinicians and their patients," Michael Coyle, executive VP and group president of the Cardiac and Vascular Group of businesses at Medtronic, explains in a statement. "This new leadership strategy and structure uniquely positions Medtronic as the only medical device company capable of doing both."
The reorganization gives Medtronic an edge over its cardiovascular rivals Boston Scientific, which made a similar move last year, and St. Jude Medical, according to Goldman Sachs analyst David Roman, as quoted by Reuters. "We continue to see hospitals making an effort to consolidate vendors and centralize purchasing decisions at the service line level," Roman adds in a note. "We think this could have been a key determination in Medtronic's sales force reorganization as well as the move Boston Scientific made last year."