The top 5 trends for med tech in 2016

Next year promises to be a contradictory, almost bipolar one for medical devices and diagnostics. Somehow, the industry is likely to both remain mired in unremitting, long-standing regulatory and financial pressures at the same time that it benefits from an influx of major new innovation-focused players.

This oddly extreme juxtaposition of the outmoded and the fantastically new is likely to be the new reality for a while, though, as regulators and traditional medical device giants learn how to navigate a new terrain that is increasingly littered with new technology.

Information technology, nanotechnology, cloud connectivity, deep learning, smartphone access and personalized medicine are all rapidly integrating. Right now. But major corporate device players continue to hold forth with their iterative internal R&D--occasionally snapping up a startup or two along the way to introduce innovation.

And U.S. regulators continue to wrangle with thorny issues that refuse to give way. Recalls large and small routinely plague medical device makers, making it tough to keep the public convinced of the value of med tech innovation. In fact, safety problems with all sorts of medical devices are at the core of recent concerns regarding the not-too-surprising involvement of industry group AdvaMed in writing the 21st Century Cures Act, which is meant to offer accelerated timelines for introducing innovative and necessary products to the market.

How can an industry that can't sort out basic issues around rigorous quality control and consumer safety be trusted to help regulate itself when it comes to rapidly developing new ones?

Essure--Screenshot courtesy of Bayer

The FDA remains stuck in a quagmire with a number of quite controversial approved devices including Bayer's contraceptive device Essure, on which the agency has said it will act in late February; and contaminated endoscopes, a years-long issue in the making that is still resulting in patient deaths.

In October, the FDA ordered the three major duodenoscope makers to conduct postmarket surveillance of the cleaning and sanitation of these devices. But other types of endoscopes, in addition to these, are still being questioned, as the reusable, jointed devices house bacteria that resist common cleaning methods. This can lead to the transmission of antibiotic-resistant bacteria, which can result in serious infection or death.

And despite rampant fears about cybersecurity, little, if anything, seems to be getting done on this front, although the FDA is slated to have a public meeting on the topic in January. That's after a huge kerfuffle about a recall of a Hospira infusion pump due to cybersecurity issues that even attracted the attention of the U.S. Department of Homeland Security earlier this year. Still, corporations aren't rushing to trumpet their cybersecurity protocols, and there's no influx of startups pledging to secure medical devices from connected predators.

The FDA is also facing a variety of issues raised by newer technologies such as consumer-oriented medical devices and apps, as well as laboratory developed tests. The agency has lately started making more rumblings about regulating the latter. But with the former, so far it's remained relatively hands-off despite a slew of entrants that obviously have diagnostic and medical treatment implications.

The financing of startup med techs remains tough, as the number of potential acquirers has dwindled with industry consolidation. Investors still don't see clear paths to exit. But that may be improving a bit as the IPO market loosens. And different kinds of acquirers are coming to the fore: industrial conglomerates that see medical devices as a means to restore growth and even biopharma companies as they increasingly integrate diagnostics and medical devices into clinical trials and drug usage.

Beyond all of this are a trio of new innovation-driven companies that will be pivotal in defining med tech's future: Royal Philips ($PHG), which more than a year ago bet the farm on an integrated approach to healthcare and consumer products; Verily, the med tech arm of Alphabet ($GOOG) that is slated to report separately for the first time in January; and Verb Surgical, the newly named robotic surgical and medical device JV created by industry veteran and savvy innovator Johnson & Johnson ($JNJ). They have all staked out big visions that should start to come to fruition in 2016--potentially making them among the optimistic highs that could counteract the difficult lows. -- Stacy Lawrence (email | Twitter)

1. Big data dominates as deep learning, AI seal the deal
2. Robotic surgery attracts new entrants in minimally invasive surgery quest
3. Google gets real--and into the clinic
4. Even more, better advances in transcatheter cardio tech
5. Devices and diagnostics become more integral to the biopharma biz