The medical device industry outlook and trends follows:The U.S. Medical and Dental Equipment Industry Overview
All industries across the board have been hit by the global economic recession. The medical device and equipment industry is no exception, but being a part of the healthcare industry it's not hit as hard as the automotive or the
retail sector. At the same time the 2009 financial crisis
does pose challenges for the industry as a whole.
The US industry with its high investments in Research and Development is regarded worldwide for making sophisticated and high quality devices incorporating advanced technologies. The medical device and equipment manufacturers run about 15,000 companies employing about 423,000 employees around the country. Of which relatively few are mid-sized medical device companies, while a majority is that of small start-up firms. A large share of firms, over 80 percent, employ less than 50 people. Also, the innovative start-ups experience weak or no sales revenue.
According 2006 data, the average annual earnings for workers in medical devices were $59,441, this rate of wages exceeds that of many major industries.
US Medical Devices 2009 Outlook
- As people in the US and Europe age the inherent demand for healthcare continues will continue to grow. In the US about 13,000 individuals are expected to turn 60 each day over the next 20 years.
- Since most of healthcare in the US is linked to Medicare, it turns out that the funding for healthcare will be rather stable.
- A major portion of the demand for healthcare doesn't fall under discretionary expenditure, so it won't be hit as hard.
- Lower tech products that aren't affected much by state of the economy, such as surgical instruments, as syringes, catheters, sutures, blood products, etc will continue to be in demand.
- Considering the overall demand for healthcare, employment and medical insurance will take a hit.
- Medical devices and medical instruments such as cast instruments, dermal instruments, scalpels or scissors associated with elective cosmetic procedures may shrink in demand as people postpone such treatments.
- Several high technology medical devices e.g. pacemakers may experience a modest growth owing to the fact that these are often used on senior adults funded mostly by Medicare, which is a stable source.
The World Medical Device Market and Trends
- Smaller companies unable to finance their growth will become takeover targets for larger medical device companies with a better cash position.
- The USA is the largest consumer of medical and dental instruments, equipment and supplies. The country's market was valued at nearly $80 billion in 2005. In addition the U.S. medical technology companies are leaders in the world's medical device production.
- Over the past couple of years many countries have faced skyrocketing costs of health care just as the U.S., causing some of them to trim costs by cutting back on reimbursement rates, or by introducing price caps.
- The competition within the medical device industry has risen and an increasing number of multinational companies are trying to make their mark in the global market. As a consequence, international sales, joint ventures, mergers and acquisitions are a commonplace. Further, in order to facilitate expansion, medical device companies are increasingly looking at developing economies as an opportunity to drive future growth. Aside from being growing markets, due to the availability of cheap labor manufacturing costs of medical instruments such as curette, knives, forceps, scissors, etc can be very low.
- Increasing expenditures on healthcare viz. hospitals, clinics, public health insurance, etc by governments around the world is driving the global demand for medical devices.
As a result of so much activity happening within the industry and around the world, the medical devices industry has been transformed into a truly global industry.