Just 3%. Not the kind of growth that inspires new entrants into a field and venture capital ivestment. But that was the conlcusion of our recent report on the medical device industry. The global medical device market reached 331 billion dollars in 2012 Those companies that did growth launched new products or acquired companies with novel
products.
In
the U.S. Medicare, Medicaid, as well as state governments implemented anemic
spending increases to hospitals, the key buyer of medical device
products. The cuts took the form of non payment for patients for
infections acquired at the hospital, or code recovery fees. In
Europe, the extreme economic downturn in Spain, Ireland, Greece and Portugal
led to layoffs and proposed reforms to the health care systems.. Even
emerging markets have grown spending less quickly than had been expected.
Hospitals continued to purchase through group organizations and insist on
transparent prices.
The
beginning of 2013 saw the medical device industry make the first payments to
the IRS for a new 2.3% excise tax on all classes of medical devices, as part of
the 2009 Patient Protection and Affordable Care Act (referred to in this report
as US healthcare reform.) Many companies attributed layoffs to the tax in
widely-publicized announcements, or said that they would not build additional
U.S. facilities. Kalorama didn’t think the device tax factored into slow
growth in 2012, but the report does predict long-term effects on venture
capital investment and research spending in the industry.
In
a slower-growing device market, there was little room for new entrants and
giants dominated. Johnson & Johnson is the world’s largest medical
device company, followed by imaging giants GE Healthcare and Siemens and
cardiology and spinal device expert Medtronic. Other leading companies
were Stryker, Covidien and Philips.
Emerging
markets were a key strategy for leaders and the report notes a new trend last
year: the acquisition of Chinese local companies by device giants. Johnson
& Johnson acquired local Chinese company Guangzhou Bioseal Biotechnology
Co. Ltd, while Medtronic announced it would acquire China Kanghui Holdings, a
developer and producer of trauma and spine orthopedic transplants.
The
full report, The Global Market for Medical Devices, 4th Edition
covers these trends, lists company revenues and provides estimates of specific
device markets. The report is available from Kalorama Information at
