Global Medical Device Market Research
The global medical device industry (a segment of the healthcare industry) is growing rapidly, with value expected to hit $228 billion by 2015, up from $164 billion in the year 2010, marking annual growth of nearly 7%, according to a recent industry research report.
As with most industries, the medical device sector was not untouched by the economic crisis, though it has not deterred the industry’s overall growth. Smaller firms, unable to pick up the slack of product development costs previously covered by venture capital investors - now made more cautious by the economic slump - were obliged to curb their activity. Some other small firms, however, chose to merge with larger firms, thereby continuing technological advances without bearing the full burden of the cost. Domestic and international acquisitions and mergers allow a cross-border sharing of resources and knowledge, facilitating continued medical technology innovation despite the tough economic climate.
More evident challenges to the medical device sector include taxes on products in overseas markets as well as incongruous foreign regulatory controls and varying implementation of standards.
Key Players & Regional Markets
The medical device industry covers a wide spectrum of products used in the treatment of patients, including cardiovascular devices, in-vitro diagnostic equipment, diagnostic devices, orthopedic devices, respiratory devices, dialysis devices, endoscopic devices, patient monitoring equipment and surgical equipment. In the US, medical devices are recognized as such in a book of public pharmacopeial standards, called the United States Pharmacopeia–National Formulary (USP– NF), and its supplements.
Top names in the industry include such medical technology leaders as: Johnson & Johnson, who ranked 40th in the Fortune 500 list for 2011, Abbott Labs (ranked 69), Medtronic (ranked 158), Baxter (ranked 192), Boston Scientific, GE Healthcare Technologies, Becton Dickinson, St. Jude, Stryker Corporation and Beckman Coulter.
Regionally speaking, the US is the leading competitor, holding in excess of 40% of the world medical device market, reports Exvere private investment bank. The US is not only an important player in manufacturing and exporting medical device products but also creates about half of global market demand. It imports lower-technology medical device products, with a notable share coming from China, and tends to export higher-technology device products. While the US may see its stakes in the global market rise in the event of taxes being lowered, practices standardized and standards harmonized, it would also see more staunch foreign competition from countries that, even if they lag behind in innovation or expertise, could compete through the cheaper production of lower-technology medical devices.
Growing domestic production of lower-technology devices not just in China but also in India, Korea, Taiwan and Brazil will help those nations become relative competitors to the US in the future; though the US is set to remain at the top of the higher-technology device market for some time. In fact, the US market is forecast to climb to $140 billion in 2013, over double its worth of $60 billion just a decade earlier, as indicated by the preliminary results of a Washington State biomedical device study.
While demand for medical devices in developed regions such as Japan, Canada, the EU and the US remains steady with annual growth rates of between 3% and 5%, developing regions are to prove lucrative for US exports, with demand in countries such as India and China showing more than twice the rate of developed countries. China’s sizeable population and healthy economic growth make it an increasingly promising target market. India equally shows potential as an export market for the US medical device sector due to its ever-more affluent population and strong accompanying private healthcare system.
At the moment Germany and the Netherlands are key competitors to the US for market share in higher-technology medical devices. However, some companies, such as Dutch firm Philips Electronics, are not completely independent players in so far as a good deal of their production is carried out in the US.
Medical Device Product Life Cycle
To enter the marketplace, medical devices must comply with pre-defined product life cycle parameters intended to maximize patient safety and ensure the highest quality standards. The product life cycle can be divided into three main phases. The first phase, or early product life cycle, consists of a product concept with its relevant market strategy and financing. The second phase, or the middle product life cycle, involves manufacturing and validation through clinical trials along with packaging and labeling. Lastly, the late product life cycle phase consists of not only the market launch of the medical device but also market analysis that subsequently impacts on successive generations of the product.