Payback II: Medical Devices Ride the Cash Curve

The medical device industry has generated returns over the past decade that exceed pharmaceuticals and many other sectors. These returns have been driven by payback on innovation, which the authors from the Boston Consulting Group define as generating cash returns from innovation. Device executives, on the other hand, have generated payback by deftly managing the four S-Factors: start-up costs, speed-to-market, support costs, and scale operations. The challenge for device companies will be maintaining these returns in the face of increased investment in this sector and the threat of health care spending constraints.