Christopher Delporte, Editorial Director, Medical Devices07.24.12
Is your glass half empty? Perhaps you usually look on the bright side of things and the glass is always half full. Or maybe you’re just a realist and you accept the level of liquid in the glass for what it is. Maybe you’re a pragmatist. You wish that the glass would be half full but realize that it is what it is, and you go about logical ways to improve the volume of contents in the glass, in the end accepting that worthwhile pursuits often take time. But I digress.
Is the medical device industry a “half-full” kind of group? Overall, I think it is—though that mind set isn’t as evident lately as it has been at other times during the sector’s rich and innovative history. All the chatter about the impending medical device tax certainly has supplanted discussion of many industry issues. The unknowns surrounding healthcare reform now that the U.S. Supreme Court has upheld the law’s constitutionality (see Washington Roundup), an economy that remains as wobbly as a toddler roller skating across ice, and an upcoming presidential election, all have pushed discussion of other medtech topics to the proverbial back burner. Granted, all of these impact the opportunities for the continued success of medical device companies in the United States, but a quick look at other angles helps provide context and perspective to some of the more menacing demons we tackle.
Every year, Medical Product Outsourcing publishes its list of top-earning medical device companies. This issue of MPO, like the ones before it, chronicles the bottom-line ups and downs of the firms banking billions of bucks in annual sales. The bigger story isn’t about the dollars, pounds, euros or yen, but about the technology (and lives improved as a result) that these multinational companies churn out year after year. This year’s report, as always, is an impressive rundown of just how innovative this sector can be. Yes, most companies reported increased sales (some even in the double digits), but what’s remarkable is the slew of new devices with such a broad array of improvements and end uses—everything from next-generation imaging to drug-coated stents that dissolve in the body. There are so many that it’s impossible to chronicle them all in the space we have available.
The point? We’re still an incredibly prolific industry. And even with the tax looming and despite some maturing markets, a number of fast-growing sectors continue to spell opportunity that will drive global industry growth in the next several years. According to a new report from Visiongain, a London, United Kingdom-based analyst firm, global medical devices will benefit significantly from emerging markets as well as “extensive research that will produce new and innovative products,” particularly in the cardiology and neurological sectors, not to mention the needs of an increasingly older population.
“The medical device industry will experience growth in the next decade, primarily due to a global aging population and an increase in the prevalence of chronic diseases, particularly in emerging markets like China and India,” said Rodrigo Gutierrez Gamboa, healthcare industry analyst with Visiongain.
“The expected approval of innovative devices in fast-growing sectors of the market, such as the neurological sector, will also help drive growth in the coming years. However, continued economic weakness in major markets of the industry and the introduction of healthcare reforms, such as the U.S. medical device excise tax, will continue to be the major constraints to further growth in the industry.”
Visiongain’s analysts predict that despite the constraints, the global market will continue to grow steadily from 2012-2022, worth $397 billion by 2016. The market generated $309 billion in sales in 2011, according to the firm’s data. Increased wealth in places such as China and India will result in lifestyle changes that are expected to increase the prevalence of chronic diseases in those countries, which is an opportunity for medtech expertise, study authors postulated. Furthermore, the fast-expanding middle class in emerging economies will result in a higher proportion of the population being able to afford devices that previously were too expensive. Efforts by organizations such as the International Medical Device Regulators Forum (formerly the Global Harmonization Task Force) to harmonize the approval process for medical devices across major international markets also will help drive gains.
Maybe it’s not as easy as it used to be, but judging by the performance of the companies on this year’s Top Company list and financial results so far in 2012, the industry remains resilient. The Wall Street Journal recently reported that the U.S. medical device industry reported stable growth in the second quarter of this year and “solid results” in the first quarter. U.S. markets have improved, but the European debt crisis may still dampen revenue growth, the Journal article noted. The challenge, of course, is to have systems in place that continue to foster growth (which may be tougher to achieve than new product development).
The cup may not runneth over at present, but it certainly is far from half empty.
Is the medical device industry a “half-full” kind of group? Overall, I think it is—though that mind set isn’t as evident lately as it has been at other times during the sector’s rich and innovative history. All the chatter about the impending medical device tax certainly has supplanted discussion of many industry issues. The unknowns surrounding healthcare reform now that the U.S. Supreme Court has upheld the law’s constitutionality (see Washington Roundup), an economy that remains as wobbly as a toddler roller skating across ice, and an upcoming presidential election, all have pushed discussion of other medtech topics to the proverbial back burner. Granted, all of these impact the opportunities for the continued success of medical device companies in the United States, but a quick look at other angles helps provide context and perspective to some of the more menacing demons we tackle.
Every year, Medical Product Outsourcing publishes its list of top-earning medical device companies. This issue of MPO, like the ones before it, chronicles the bottom-line ups and downs of the firms banking billions of bucks in annual sales. The bigger story isn’t about the dollars, pounds, euros or yen, but about the technology (and lives improved as a result) that these multinational companies churn out year after year. This year’s report, as always, is an impressive rundown of just how innovative this sector can be. Yes, most companies reported increased sales (some even in the double digits), but what’s remarkable is the slew of new devices with such a broad array of improvements and end uses—everything from next-generation imaging to drug-coated stents that dissolve in the body. There are so many that it’s impossible to chronicle them all in the space we have available.
The point? We’re still an incredibly prolific industry. And even with the tax looming and despite some maturing markets, a number of fast-growing sectors continue to spell opportunity that will drive global industry growth in the next several years. According to a new report from Visiongain, a London, United Kingdom-based analyst firm, global medical devices will benefit significantly from emerging markets as well as “extensive research that will produce new and innovative products,” particularly in the cardiology and neurological sectors, not to mention the needs of an increasingly older population.
“The medical device industry will experience growth in the next decade, primarily due to a global aging population and an increase in the prevalence of chronic diseases, particularly in emerging markets like China and India,” said Rodrigo Gutierrez Gamboa, healthcare industry analyst with Visiongain.
“The expected approval of innovative devices in fast-growing sectors of the market, such as the neurological sector, will also help drive growth in the coming years. However, continued economic weakness in major markets of the industry and the introduction of healthcare reforms, such as the U.S. medical device excise tax, will continue to be the major constraints to further growth in the industry.”
Visiongain’s analysts predict that despite the constraints, the global market will continue to grow steadily from 2012-2022, worth $397 billion by 2016. The market generated $309 billion in sales in 2011, according to the firm’s data. Increased wealth in places such as China and India will result in lifestyle changes that are expected to increase the prevalence of chronic diseases in those countries, which is an opportunity for medtech expertise, study authors postulated. Furthermore, the fast-expanding middle class in emerging economies will result in a higher proportion of the population being able to afford devices that previously were too expensive. Efforts by organizations such as the International Medical Device Regulators Forum (formerly the Global Harmonization Task Force) to harmonize the approval process for medical devices across major international markets also will help drive gains.
Maybe it’s not as easy as it used to be, but judging by the performance of the companies on this year’s Top Company list and financial results so far in 2012, the industry remains resilient. The Wall Street Journal recently reported that the U.S. medical device industry reported stable growth in the second quarter of this year and “solid results” in the first quarter. U.S. markets have improved, but the European debt crisis may still dampen revenue growth, the Journal article noted. The challenge, of course, is to have systems in place that continue to foster growth (which may be tougher to achieve than new product development).
The cup may not runneth over at present, but it certainly is far from half empty.