An informative weekly newsletter that shares insights into building a medical device business in women’s health.

It also explores new innovations in the field, how these products were developed, and the inventors behind them.

In this week’s newsletter, I share a few strategies used in building our US business following FDA clearance. I focus specifically on New York, a territory we retained as direct until our business was acquired.

With major New York hospital systems as customers, they would provide key reference sites and momentum for our business nationally. The OBGYN community is close knit and news would travel fast about our exciting new innovation.

Looking back, this was a great decision for our business. I hope you take something away that both educates and inspires you.

Building a Direct Business in New York

The decision to sell directly in New York was an important one, and one that came with risks. How would we manage this key territory without any local presence? In the end, we felt the potential advantages meant it was a risk worth taking.

Time in the field meant I could immerse myself in the US market, learn the intricacies of the sales cycle, and build long-lasting relationships directly.

Despite the extensive travel that would be required, the nature of the medical device business means no substitutes for in-person engagement and discussion to build awareness of your product.

I would also develop an understanding of the decision making hierarchy within a US hospital, and ultimately prove the business model in what would become our most important market.

Analyse your market ahead of time

We were entering a new market. We had many years of experience selling into the NHS and other regions outside of the US, but here we would essentially be starting from zero. What could we do to get a head start and ensure we focused our limited resources effectively.

• Build a target list - in New York, I wanted to know who were the largest hospitals (by number of births in our case). If I could build a list of top 10 hospitals in the region, this is where I would initially focus my time. It would also provide me with an understanding of the hospital system structure in New York (several key groups and IDNs operate in the state). I found a few great sources of information to obtain this data: 1) New York Government website - all hospitals need to provide certain data and one of these is number of births at the facility; 2) Leapfrog - another great source for birthing information (although limited by some hospitals not submitting their info).

• Identify the key contacts within each hospital - the department hierarchy is usually available on the hospital’s website. Scan this to understand who’s the decision maker at a particular hospital. In our case, this would typically be one of the following: OB Chair, OB Chief, OB Director, or the Director of Women’s Services. Now I would have some names of who to approach.

• Put a plan in place to make contact with the identified decision makers - could you reconcile the points above with your database from conferences previously attended? Usually there would be a way to find an introduction to a decision maker, you would just need to be resourceful.

• Local conferences and committees in the region - build an understanding of local activity in your target market. In New York, this might be making contact with the regional ACOG Group (District II) and attending their meeting (usually in October each year). Identify the key committees where you might be able to increase awareness of the problem your device is solving (e.g. the New York State Perinatal Association).

That’s just a couple of quick examples. Getting in front of the right clinician was critical for us, but it was only the very first step in a sometimes long and complicated sales cycle (one for another newsletter).

Build a detailed sales strategy

Once I spent some time building a list of target hospitals and key clinicians to approach, I would then develop an actionable sales strategy. Given that I was managing this region directly from the UK, a travel schedule would become the key component.

I would map out the year ahead based on initial leads - this might mean starting initially in NY City, where I could easily travel around and schedule multiple meetings per day. It might revolve around national or local conferences we were attending and planning meetings around those. It would also be based off the hospital schedule - for example, their monthly department meetings where I might be given an opportunity to present our product.

I would prioritise hospitals and systems to target and put an expected timeline on when these accounts would implement, how often I would need to train, and the ongoing support I would provide.

Immerse yourself in the sales cycle

The sales cycle at large hospital systems (e.g. New York Presbyterian made up of 8 maternity hospitals) could become complex. By immersing yourself in the process from beginning to end and learning something from everyone you meet along the way, you will set yourself up for success in future accounts.

In a multi hospital system, you would likely meet with clinical teams (physicians, nursing, PAs, support staff), purchasing, sourcing, value analysis, and finance departments. Each would play an important role in having your product approved for initial and on-going use. You would need to develop an understanding of their roles and build relationships to provide support and to ensure a smooth order to cash process (more on that below).

In future newsletters, I will talk through examples of sales cycles at specific accounts in the US and this will give a good insight into the process.

Infrastructure for direct sales as a UK business

All the above would need to be supported by an infrastructure for selling directly into the US market. Again, this is one for a future newsletter but below is a checklist of some items you might need in place:

• US Entity - for us, we set up a US Subsidiary of our UK parent company. You would need to take advice in the correct entity structure, often a C-Corp will be the most suitable for what you’re trying to achieve.

• Order to cash process - systems in place to invoice the customer, record the sale correctly in your US books, and receive payment (bank account, remittance processes, cashing of cheques etc).

• Vendor set up documentation - you will quickly learn the information hospitals require in setting you up as a supplier for the first time (usually this will include incorporation details, a W9 form, Purchase Order processing information, any small business exemptions etc).

I would suggest appointing a local US accountant to manage the annual filings and provide advice on more complex areas such as transfer pricing (particularly between parent and subsidiary where stock is being transferred).

We used a very streamlined process so we could sell directly in New York and several other territories, but the majority of our national sales coverage came through independent distributors.

We would of course need to hold stock in the US market to serve both distributors and direct customers. We did this by outsourcing warehousing and logistics to a national partner. This was an effective strategy to maintain a lean cost base.

There would be many other factors to consider depending on how you decide to do business in the US. One route we were considering at a future date - building a national sales team. This would of course mean several considerations related to HR and employment.

We were acquired before we got to that stage (I would say fortunately!) and the product was then put into the hands of a national sales force. We saw the benefit of this immediately, but did not have that luxury previously with resources as a start up being limited.

A brief note on the author - Nish Varma

After several years working in finance, I partnered with my father, an obstetrician who invented a medical device (Fetal Pillow) to solve an important clinical problem in his field (detailed in issue one).

After initially launching into the UK market in 2011, several years later, Fetal Pillow was cleared by the FDA in 2017. We then focused our efforts on bringing Fetal Pillow to the US market.

I spent the next few years building our US business and in early 2021, our company (Safe Obstetric Systems) was acquired by CooperSurgical, a leading global player in Women’s Health. I spent one year post completion working for the company during an earnout period to support the national launch strategy.

It was a 10 year journey to commercialise and bring the product to market - we were able to prove our business model in the US and that garnered interest from some of the key industry players.

Since the company sale, my father and I have started developing a new obstetric product and hope to bring this to market in the near future. I also consult for early stage medical device companies looking to expand their operations internationally.

This newsletter is a passion project to share some of our journey with others who might be on a similar path.

I appreciate you taking the time to read this week’s newsletter. Any questions, comments, or specific topics you would like to hear about - feel free to mail me at: [email protected]

Hope you have a great weekend!

Nish Varma

Cofounder - OBSolve Ltd

Consulting Services - OBG Access Ltd

Previously - Safe Obstetric Systems (Fetal Pillow)