The medical device market has experienced tremendous growth, reaching more than $330 billion worldwide. While the industry remains healthy, several challenges face those who design and manufacture medical devices. ADMET serves this market by developing materials testing systems, and we took a closer look at some of the key players, industry trends, and solutions deployed. Following are some of the key takeaways from our recently published Medical Device Sector Review:
Large Market/Slowing Growth
Revenue for the global medical device marketplace has exceeded $330 billion, but pundits agree the heady days of double-digit and even high single-digit growth are over. The industry is adjusting to the reality of more modest 2% to 5% annual growth through the decade. According to VisionGain, a London-based business intelligence firm, medical device industry revenue will reach $398 billion by 2017.
Factors contributing to the industry’s slowing growth are a stricter regulatory environment including the Affordable Care Act’s excise tax, longer FDA review, and tightening rules in Europe of CE Mark approval. Adding to margin pressures is increased competition through greater globalization and the emergence of group purchasing organizations (GPOs), which effectively limit the pool of potential customers. Lessening reward for R&D investment and pressuring pricing and profitability are trends related to cost containment initiatives such as lower reimbursement from government programs and increased awareness and cost sensitivity from patients and their healthcare providers.
Slowing revenue growth means that industry players must pursue ways to conserve costs. The bottom-line trend for medical device manufacturers and their suppliers is to look inward to contain operating costs, strengthen competitiveness, and, of course, innovate. Options include bolstering supply chain processes as well as strengthening internal processes.
One important area for containing costs is to beef up testing. Medical device manufacturing is one of the least innovative industries in deploying advanced technologies in measurement and inspection. One result of lagging test standards is the increase in device recalls: A Medical Device Recall Report published by the FDA in March 2014 reported that the annual number of medical device recalls increased by 97% from 604 recall events in FY2003 to 1,190 in FY2012, with U.S.-based manufacturing firms accounting for most of the events in recent years.
In addition more details on market industry trends, the 33-page report includes insight from key players Abbott Laboratories, Medtronic, Stryker, and St. Jude Medical. Also featured are case studies from three organizations involved in the medical device industry: University of Massachusetts Medical School, which is studying the fracture healing properties of various orthopedic implants; Karl Storz, which develops meter-long endoscope tubing; and Orchid Orthopedic Solutions, which does contract product development for orthopedic medical devices including bone screws.
The full 33-page report is available at no charge by visiting the ADMET site.