Reflections
By Simon Wyatt
For those of you around the world who celebrated the holidays, I trust you enjoyed the break and had the opportunity to spend time with friends and family. 2016 was an incredibly busy year at Contamac and I know all our staff welcomed the chance to have some time off. We are now back looking to build on the successes of last year.
As we begin another year we rightly look forward to our plans and aspirations, both personally and for our businesses. I’m sure for many whose fiscal year ties in with the calendar year, weeks of planning and budgeting are complete and you are now nervously, or confidently, looking to achieve those targets.
I’m sure in your planning process you have thought carefully about the, seemingly, never ending price pressure on your products, the challenges of finding new markets and the inevitable increased regulatory costs, on top of inflationary costs on most overheads. These tasks are coupled with ensuring there is at least some budget for R&D, as new products are essential to continue developing your business, and perhaps there is some cash left for Capex to improve efficiencies.
We all need to become involved in this detail and it is essential governance for any business to plan properly. But, at some point, someone needs to be “steering the ship” and to do this effectively, you need to step away from the detail and look at the bigger picture. Our industry is changing at a rate I have not experienced before and I’m not clear whether I see storm clouds or sunshine on the horizon.
2017 will see further change and this seems to be starting from the top. We welcome, I think, J&J back into the ophthalmic industry following their acquisition of AMO. J&J, as we all know, had a major impact on the contact lens industry introducing technology to produce a good product based on high volume, low cost manufacture for “standard” lenses. One can only assume they have plans for a similar approach for IOLs?
As one large player enters, another may exit, with the news from the CEO of Novartis of an interest in divesting themselves of Alcon. We shall wait and see whether anyone wishes to take on this challenge.
Valeant’s well publicised difficulties must also raise questions on the future stewardship of B&L.
So “big pharma” came in and now appears to want out. What do they know that we don’t? Is the change at the top a good or bad thing for the rest of us? I wish I had the answers, I don’t but what I do know is we need to be well prepared. This industry is changing and we have to have the flexibility to adapt and, I hope, prosper.
If these changes are not concerning enough, I refer back to my article in the previous edition of Global Insight, with regard to the forthcoming regulatory changes. The new Medical Device Regulations come into force in 2020 and manufacturers will have a three year period of transition to comply with the new laws. There is no provision for grandfathering products already on the market so that every medical device must be recertified, an inventory that is estimated to be not less than 500,000 products.
So, is 2017 a year of challenge or a year of opportunity? The key to the latter is to be prepared and have a clear strategy on the way forward, and your position in the market. For those with their 2017 forecasts and budgets happily completed, a final review may prove a very worthwhile investment.
I believe we are well prepared for the anticipated changes here at Contamac and trust that our planning will assist you, the manufacturer, with your plans.
- A recertification of products will inevitably involve providing information and test results on the material as well as the finished product, and we are focussed this year on ensuring we have all the required information available on our IOL material range, to meet any changes in the new standards.
- Access to the moulding technology through Contateq provides a solution to the challenges of reducing costs in line with falling sales prices. A product which requires no lathing and no polishing takes considerable cost out of manufacturing. The increasing demand for our first generation hydrophobic semi-finished product is a testimony to the fact we have proved the technology and 2017 will see us expand the product offering from this technology.
- For a number of manufacturers, the coming changes will prompt consideration of product rationalisation and positioning. Does your business structure allow you to compete in the over-crowded mono-focal “me too” product market or should you consider specialisation, with either a move to the premium lens market or at least establishing an element of differentiation. Whatever decision you make, we are here to help.
Cost effective, high volume (whilst retaining high quality) products can be achieved utilising the moulding platform through Contateq.
Product differentiation can be achieved through new/novel material platforms, and we will bring some of these ideas to the market this year. I would also remind you of our “tailor made” message launched at the ESCRS in London. We welcome the opportunity to work in partnership with the manufacturer, to co-develop new or modify existing materials, to meet more specifically the requirements of your lens design(s).
- Differentiation does not have to be in the lens deign. The choice of delivery system is as important and the wrong injector, cartridge or visco can impact on the overall experience of the IOL itself. Whilst I appreciate in most cases today the injector is “given away”, is it really a sensible decision to try and achieve savings in such an important area? Your lens is judged on the whole system during the cataract procedure. We are delighted to have secured the distribution rights to the ErgoTouch delivery system. Available in the “Fly” (butterfly cartridge) version now and soon the “Glide” (flat loading the lens), the product is of the highest quality providing a safe and reliable solution. The ErgoTouch also stands out from the traditional injector and as such provides “differentiation” in the market.
- Contamac supply our materials to manufacturers around the world. I know that many of you are rightly seeking new markets, new lens designs and new opportunities. There has been a shift in recent years and many manufacturers now see the benefit in working together rather than in isolation. The opportunity for licensing designs, OEM manufacture and distribution arrangements does exist, and we are in a unique position, knowing most manufacturers, of facilitating introductions. Working together does indeed sometimes make you stronger and we would be delighted to assist if possible.
I hope, despite the obvious challenges, you are looking to 2017 with optimism. I would like to thank you all for your custom during 2016 and, together with all my colleagues at Contamac, look forward to working with you during the forthcoming year.