A team of seasoned managers wants to renew the medical procurement system from the ground up with Hystrix Medical
Giorgio V. Müller, NZZ-E-Paper, 06.08.2019 (translated from German)
If you want to make a difference, you have to risk a lot and also make sacrifices. For 38-year-old Philippe Hügli, this meant giving up a well-paid job as head of Switzerland at the American medical technology group Boston Scientific a good two years ago and in one fell swoop getting by on just a quarter of his previous salary. It is already an achievement that a young company like Hystrix Medical is able to pay its employees wages right from the start.
Since then, the Zurich-born entrepreneur has put all his energy and time into the company, which has established a digital marketplace for medical products and has a vision of becoming a “healthcare hub”, as the young entrepreneur explains in an interview. Hügli is well aware of the risk of clustering, because his wife, a lawyer, is also a member of the staff, which has now grown to 12 people.
Hügli studied biomechanics and logistics at the ETH Zurich. His idea for a digital marketplace came to him years ago when he was still working for well-known American medical technology companies in Switzerland. He was always at the interface between the suppliers of medical products – his employer – and the customers, mainly hospitals and clinics. Hügli is therefore well aware of the concerns and needs of both sides. At St. Jude, he was responsible for the sale of implants and pacemakers, then at Boston Scientific it was artificial heart valves and stents.
Consumables at the centre
This process was extremely complicated and cumbersome, he recalls. He often negotiated back and forth with the purchaser in a hospital for months until a contract was concluded. For highly complex products, this procedure may be tolerable. But for mass-produced goods such as plasters, sanitary facilities and hospital furniture, but also simple implants, this is superfluous. Hügli estimates that this is the case for 50 to 70% of all medical products.
With Hystrix, he wants to simplify the procurement of medical consumables. The online platform is a web-based software-as-a-service application to which suppliers and buyers have easy access. Initially, only 150 products were available on the digital marketplace, the first deal was a measly CHF 150. But now the range includes 72,576 products and 586 brands, offered by four dozen affiliated suppliers. The whole thing is financed by a 3% transaction fee, which the supplier pays to Hystrix. Currently, more than 30 clinics, including university hospitals, are connected. The service is free of charge for the customers. The same 10,000 medical devices are available in every hospital, currently about a quarter of them are available on the platform.
In concrete terms, a supplier offers his articles for sale on the platform, including price and discount structure. For security reasons, a two-factor authorization including a personal password is required. The competition does not see his conditions, and he only knows who the actual buyer is when the contract is concluded. Instead of months, the purchase takes only minutes. The payment process takes place outside the platform to keep the technical requirements as simple as possible. To ensure that everyone is informed about the market prices of the articles, the respective conditions are published in anonymous form.
Everything still in the early stages
Hystrix Medical is still in the start-up phase. Over two financing rounds, CHF 2.6 million have been raised so far. The three-man management team consists of Hügli and his two co-founders Jonathan Campbell and Roman Eminger. Campbell was most recently Executive Director at JP Morgan, but now he is responsible for day-to-day business as CFO. Eminger came from Actelion, the Swiss biotech company acquired by Johnson & Johnson.
The board of directors of the young company also includes top-class members. Hans-Peter Güllich, a proven IT entrepreneur, serves as Chairman. Florian Teuteberg, the founder and CEO of the Migros online subsidiary Digitec Galaxus, sits on the board. Stephan Wehrli represents the lead investor of the first round of financing, Zühlke Ventures, and the second round was joined by Stephan “Essi” Fischer from the Start Angels Network.
At the end of March Hystrix moved its headquarters from Solothurn to Langenthal. “The Berne-based location promotion agency was by far the friendliest and most sincerely interested,” is how Hügli explains the decision.