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From Local Labs to Global Scale: How MedTech Companies Can Thrive Amid Innovation and Regulation

Discussion with Leonardo Lago

With over 25 years of experience in the pharmaceutical and medtech sectors, Leonardo Lago has held leadership positions across regional and global sales organizations in companies such as Menarini, Allergan, AstraTech, Straumann, and Sweden & Martina. Now the founder and general manager of his own dental implant distribution company, as well as a consultant to several medtech players across regions, Lago offers a seasoned perspective on how companies can remain agile and innovative while navigating increasingly complex international landscapes.

Balancing Innovation and Cash Flow: R&D Investment Across Market Tiers

Innovation is often hailed as the backbone of medtech competitiveness, but for smaller companies, the cost of R&D can create a paradox. As Lago explained, “Smaller and medium companies spend 40% of their incomes in research and development. But obviously, if they spend this much money for this, they cannot invest in sales force development”. This imbalance leaves firms with highly advanced technologies, but without the commercial infrastructure to monetize them effectively.

While large companies can acquire smaller innovators to bolster their pipelines, mid-sized and small players often face an uncomfortable trade-off between future readiness and present-day viability. “The big guys are able to do the job by themselves or, if they find something interesting in the market, they might even decide it’s so good that they’ll buy the entire company”. For smaller firms, the path to competitiveness lies in specialization, agility, and regional intelligence. Lago described, “If you don’t have your own products and you cannot develop them, at least you can be really useful for the bigger companies to allow them to be introduced in other countries”.

Lago stresses the importance of these companies staying deeply attuned to their local markets. “You may not have the resources to develop a product from scratch”, Lago noted, “but your understanding of local regulatory processes and distribution networks makes you a valuable partner for bigger firms seeking market entry”. This capability to act as a conduit between innovation and market access transforms small players into strategic allies for global giants.

The ability to maintain an innovation pipeline can significantly influence a company's longevity. Lago advises allocating at least 20-30% of income to future products. “If you are researching something on implantology nowadays, you will be able to launch this in two or three years”, Lago emphasized, “so if you want a steady stream of new products, you need to maintain a constantly full pipeline of potential innovations ”. Without a reliable top line, this vision is difficult to maintain, which is why small companies must assess where their investment brings the highest long-term return—be it in innovation or commercial infrastructure.

Adapting Go-to-Market Models to Fit Diverse Needs

When entering new markets, choosing between building a direct salesforce or partnering with local distributors is a strategic decision with major implications for cost, speed, and control. 

Lago suggests that working with distributors is often the most feasible starting point, especially for companies with limited resources. “Your margins are lower because you sell at a reduced price to leave room for the distributor”, he explained, “but you gain strong local support when you may not have the capital to build a salesforce”. Distributors not only bring market knowledge but also help companies navigate regulatory hurdles and establish early traction.

Still, Lago points out that going direct offers clear advantages in the long run—particularly in terms of profitability and brand presence. “You have more profit”, he added, “but you’ll also need to invest more each year to keep that salesforce running”

For many medtech firms, the most effective route is a phased strategy: leveraging distributors in the early years to learn the local landscape, and then gradually shifting to a direct model as operations stabilize and scale. This hybrid path balances risk and return while ensuring that companies remain agile and adaptable as they grow.

Navigating Global  Regulation: From Europe to Emerging Markets

For medtech companies expanding internationally, regulatory complexity remains one of the most formidable challenges. “Every major company has to pay close attention to regulatory changes”, noted Lago, pointing to the significant impact of the EU’s Medical Device Regulation (MDR). But compliance within the EU is only one piece of the puzzle. “When it comes to, for example, the Middle East, each country has its own regulation. So having the MDR isn’t necessarily enough to enter those countries”. This patchwork of national requirements demands either extensive in-house expertise or trusted local partnerships.

Lago strongly favors the latter. “You need regional players who know their market inside and out. It’s not about arrogance or imposing your product. It’s about fitting in”, he explained. Local consultants bring not only regulatory knowledge but also cultural sensitivity—both essential for effective market entry. In the dental sector, for instance, Lago’s team worked with dedicated consultants across regions to handle country-specific nuances with tact. “They helped us respond to those particular markets in a polite and appropriate way”, Lago said. In this light, local partnerships are not just a strategy—they’re a necessity for effective, scalable international growth.

The scale of global variation makes it nearly impossible to manage every country’s requirements internally. “We have more than 240 countries in the world”, Lago pointed out. “So it’s impossible to think that they may know the regulations for each country”. Instead, strategic collaborations with consultants and distributors allow companies to move faster and reduce risk. “We had consultants for Georgia and Turkmenistan”, he added. “They helped us respond to unique requirements without risking losing a lot of money and time”. This kind of precision—only achievable with on-the-ground expertise—enables companies to avoid costly delays and adapt their strategies early on. 

These partnerships are more than just a workaround—they’re often the foundation for long-term growth. Lago highlights the added value of distributors in particular, especially during early-stage entry. “If you have a distributor there, they’re already familiar with the context and the regulations", he explained. “Having a distributor in the first few years can help you better understand the situation in the country you're trying to enter”. As companies gain traction, they can then reassess whether to maintain partnerships or transition to a direct model—armed with the knowledge, credibility, and presence those early alliances helped establish.

Training the Sales Force for a Digital World

Digital transformation is radically reshaping how MedTech products are sold, especially in dental and implantology sectors. From intraoral scanners to AI-assisted surgical planning, sales teams need to understand increasingly complex solutions. But retraining an entire salesforce is rarely realistic.

Digital tools have revolutionized the MedTech value chain—but training a traditionally analog salesforce for this transformation is far from simple. “If you look at dental in the last 10 years, we have had many new things that completely changed the process, that now can be done completely digitally”, annotated Lago. But legacy sales reps often struggle to keep up with this change. “You cannot think that you can train a sales force of 50 people at the same level on these products“, Lago observed. “What works is pairing traditional reps with new specialists who focus on technical sales”.

This dual-layer approach—sales reps for relationship-building and specialists for product depth—ensures customers receive the expertise they need without overwhelming legacy teams. Lago advocates for a structure that combines traditional reps with digitally fluent specialists. “We found it really beneficial to introduce new specialists that can help those guys find a person interested in these new technologies”. Rather than forcing uniform adoption, companies should lean into role differentiation, pairing experienced sales reps with tech-savvy specialists who can drive technical conversions.

Lago also emphasized the importance of strong middle management to transmit corporate vision and training from headquarters to field teams. Middle managers play a critical role in connecting local teams with global strategy. “You need the middle management and the specialist to be trained centrally and to have a common view to ensure that the level of performance of the sales guys it's more or less the same throughout the countries”, he explained. “That’s how you ensure consistency in customer experience”.

Maintaining Human Relationships in Scalable Sales Models

As medtech companies scale, preserving quality customer relationships becomes both more complex and more vital. Lago has witnessed this shift firsthand. “20 years ago, 25 years ago, we were not completely connected in each moment of our life. So nowadays you can have a connection with your manager immediately”.

Sales models now operate on a hybrid system, blending direct human engagement with digital self-service tools. “The customers can be addressed by a person—which is the classical model, a sales rep, a specialist—but many companies are investing a lot of money on other channels like social media or eShop channels”. This allows companies to remain accessible and responsive even outside of business hours.

Yet, the human touch remains irreplaceable. “The person is still important in my opinion in medtech, but the other factors are becoming way more important than what we expected 10 years ago”, Lago annotated. By offering both digital convenience and human guidance, companies create a more responsive, resilient customer engagement model—crucial in high-precision fields like dental implants and guided surgery.

Looking Ahead: AI, Software, and MedTech's Evolving Core

The convergence of AI and digitalization is rapidly redefining the medtech industry—transforming not only the products being sold but also the very essence of value creation. What was once a hardware-dominated field is now evolving into a tech-driven ecosystem. “Now we  are speaking about softwares, milling units, AI applications to some software”, Lago noted. “So we  start selling things that are not at all connected with the titanium screws anymore”. This transition marks a fundamental shift in how medtech companies operate, requiring them to move beyond traditional product lines and into the realm of digital solutions.

The future of medtech, as Lago sees it, is undeniably digital. AI is already playing a significant role in diagnostics and surgical guidance, with the potential to revolutionize clinical decision-making. “AI can suggest surgical approaches that doctors might never think of”, he observed. “It’s not just about better outcomes; it’s about democratizing expertise”

This transformation also forces companies to rethink what they’re actually selling. “We used to sell screws”, Lago said. “Now we’re selling software, machines, and algorithms”. It’s a paradigm shift that demands a new mindset—one centered on flexibility, open-mindedness, and embracing non-traditional value propositions. Companies that invest in understanding and integrating AI and digital tools will gain a competitive edge. “Even if you don’t become an expert you need to understand the value AI can offer your customers. That alone can be transformative”.

Thanks to the application of AI to computer-assisted surgery software, even a non-expert user can now easily plan an implant surgery: many of the necessary and preparatory steps are in fact facilitated compared to what happened in the past.

For commercial teams, this requires a major shift—not just in sales strategies, but in knowledge and capabilities. Selling AI-driven solutions demands understanding complex ecosystems, educating customers, and aligning offerings with clinical impact. 

“If you would have told me that I will be selling softwares, machines, and disposables for those things, I would not have believed you because it changed so fast”, he admitted. 

Strategic Priorities for Medtech Leaders

  • Regulatory expertise is essential: Successfully entering new markets requires deep understanding of local compliance standards, whether through in-house teams or external partners. As Lago put it, “You cannot think of entering a new market or a new country without this help”.
  • Go-to-market choices shape innovation capacity: The decision between direct sales and distributor-led models affects not just margins but a company’s ability to invest in R&D and operations.
  • Digitalization demands agility and openness: Companies must remain flexible and curious to adapt to rapid technological shifts. Lago emphasized,don’t need to become an expert, but you have to have a space in your mind open to acquire at least a small view on this”.

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