2022 is a strange time. The world is in a constant state of flux and this is impacting nearly every industry. Inflation is the highest it has been in forty years. The cost of fuel is at an all time high. Supply chain disruptions from the Covid-19 pandemic are still relevant. The cost of borrowing money is increasing and the travel industry has still not recovered from the pandemic. All of these factors have had an impact on the medical device industry. In this article we look at what is like to be a medical device rep in 2022.
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Career In Medical Device Sales In 2022
1. Medical Device Price Increases
This is a big one as a medical device rep. Inflation has really hit the medical arena. The costs of components are through the roof. To maintain reasonable margins companies have no choice but to pass along these price increases to customers. This can lead to some challenging conversations for sales rep. Customers do not like hearing that their pricing will be increasing. The issue is that we are not talking about a once time price increase. Most companies are having to continually reevaluate their pricing on a weekly, monthly, or quarterly timeframe. This is because the cost of components to manufacture medical devices is changing rapidly. Most sales reps have never had to sell in an era of such high inflation.
2. Medical Sales Supply Chain Disruptions
In addition to telling customers about increasing prices sales reps have to set expectations for lead time. The pandemic is still impacting the global supply chain involved in the production of most medical devices. As of May 2022, China is still experiencing lockdowns. Medical devices are complex products with many components. A delay in a single component can disrupt production. Sales reps have to be able to set realistic expectations with customers about deliveries. It can be tough to have these frank conversations and not jeopardize potential business.
3. Vendor Credentialing
Vendor credentialing seems to evolve as fast as health care evolves. The vendor credentialing services get more restrictive and thorough each and every year. This includes making companies buy paper scrubs and pay to have new products evaluated. Health systems like these services because they provide visibility and control how hospitals interact with vendors. As a medical device rep it becomes just another administrative task. If a rep covers a large geography, staying up to date with these services can seem like an endless task.
4. Stagnant Wages
Most companies are slow to increase wages while inflation is quickly eating the earning power of a dollar earned. Most companies provide small cost of living increases to the salary component of the compensation package. These increases are not designed to be effective in an era of eight percent inflation. We can assume their purchasing power has been reduced by twenty percent, if a rep has not had a compensation increase over the last two years. Yikes!
5. Travel Delays
Sales reps spend a lot of time on the road. Travel has become a lot less fun over the last few years. Airlines and hotels have cut down on perks. Travel programs have become less advantageous. And worst of all, flight delays and cancelations have become more frequent. There are less direct flights and it is hard to be confident that you will make it to your destination on time.
6. Healthcare Sales Hiring Freezes
The Fed is increasing rates which increases the cost of borrowing capital. This is being done in an attempt to control inflation. This hinders the ability for companies to cheaply grow. Asset prices have taking a hit through the first half of 2022, and this may only continue. The makes all companies including medical device companies rethink plans to expand by hiring new employees.
7. Corporate Restructuring
Publicly traded medical device companies are starting to become more focused in an attempt to appease Wall Street. They are starting to spin off their high growth businesses to form stand alone companies. This allows investors to compare and evaluate similar types of firms for investment purposes.
8. A Focus On IT Integration
What medical product doesn’t get integrated with the EMR and IT systems these days? It seems there is more focus on integration than any other product feature over the past few years. Healthcare organizations are complex. Getting new products implemented into existing systems can be time consuming. Sales rep face more questions and discussions around IT integration than ever before.
9. Medical Sales Shipment Delays
There has been no end to the logistics nightmare that has defined the last few years. The logistics industry has been impacted by labor shortages, increases in fuel costs, war, inflation, and many other factors. This has led to increased prices, shipment reliability issues and frequent delays. A sales rep has to be able to manage customer’s expectations in this ever changing logistics environment.