Findings from a new survey of executives in MedTech companies reveal that the majority of their revenues come through contracts with healthcare facilities, integrated delivery networks (IDNs) and group purchasing organizations (GPOs). Plus, dependence on contract-based sales is growing across MedTech companies, making it imperative for these organizations to optimize their contract management practices and leverage contract intelligence. 

The survey, conducted by MedTech Dive in partnership with AcuityMD, also shows that few MedTech companies have implemented a strategic, purposefully-designed system for tracking which providers and facilities are on contract and sharing this information throughout the sales cycle. Without such a solution in place, stakeholders lack visibility into on-contract opportunities, leading to extended sales cycles, wasted effort and missed revenues. 

“Unequal information distribution creates major challenges for medical device sales teams,” said Alex McLachlan, U.S. Commercial Director at Intellijoint Surgical. “Reps aren’t necessarily going to a spreadsheet somewhere on a shared drive when they’re thinking about an opportunity with an individual surgeon who is right in front of them. Often, they don’t have access to the right information at the right time.” 

The survey indicated that a large majority of MedTech company executives are interested in purchasing and implementing new technologies to support contract management. 

Additional key findings include the following:

• MedTech company stakeholders broadly agree that contracts will be a major driver of their organization’s revenues over the next five years. As many as 79% of MedTech executives anticipate that contracts will drive a significant portion of their company’s revenues over the next five years. Agreement is particularly strong within the very largest companies. All (100%) survey participants in MedTech companies with annual revenues in excess of $1 billion agree that contracts will continue to drive a significant portion of their sales. 
• MedTech companies are missing opportunities and leaking revenues because of their lack of contract intelligence. All (100%) of survey participants believe their company could unlock additional revenue if it could fully leverage all of the contracts that have already been negotiated. In addition, 100% of survey participants agree that their company’s growth has been impacted by missed contract renewals, contract expirations, unclear rebate terms or other sources of revenue leakage.
• Many MedTech companies are planning to address their contract management challenges by hiring more full-time employees. A full 97% of survey participants plan to hire additional talent to address this problem. This can be costly, since it involves long-term investments in labor as well as short-term hiring and recruitment costs. 

What’s needed is a means of breaking down silos and improving collaboration across local, regional and national accounts and sales teams. MedTech companies should also implement tools and solutions that support information sharing and empower stakeholders to adopt a more strategic approach to prioritizing opportunities. 

“AcuityMD Contracts helps national account teams disseminate relevant contract information to field teams in a way that helps them see the bigger picture and prioritize,” says Michael Monovoukas, Co-Founder and CEO of AcuityMD. “The contract information is loaded onto a platform that reps love to use, giving them deep context on the surgeons and facilities in their territory. It’s easy to navigate, it’s in their language and it adds value to help them win more often.” 

More detailed findings are available in the survey report, entitled “MedTech Companies are Leaving Money on the Table with Inefficient Contract Management.”

Survey Methodology

The survey, fielded online, polled 150 executives in medical technology and medical device companies. All participants were involved in account management or sales at the director level or above. Conducted in Q2 of 2024, the survey used an assortment of multiple-choice, Likert-scale and matrix questions to understand participants’ experiences with contract management, their plans for the future and their present-day challenges. Most of the respondents (60%) work for companies with annual revenues above $50 million, and most participants’ companies (78%) have been commercial (post-revenue) for six years or more. All participants report that their companies are best described as manufacturers of General Medical Supplies (GEN) or Physician Preference Items (PPI).