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The Medical Device Market: Up, Up, and Away With successful devices like balloon catheters, the medical device market rose like a hot air balloon over the last 25 years. By 1979, the newly regulated medical device industry was just 3 years old. Over the next 25 years, the industry managed to weather economic storms and to grow steadily. Overcoming regulatory hurdles, it produced many breakthrough devices and remained strong and viable. Some industry sectors fared better than others or grew at a faster rate, but overall, the industry has seen nothing but upward trends. The information presented here is based primarily on data from various editions of the U.S. Industrial Outlook published by the Dept. of Commerce. The selected quotes provide a snapshot of the forces at work and the state of the industry at a given moment in time. They also provide some context for the market trends shown in the line graph. The graph traces the value of shipments for the medical device industry from 1979 to 2004, the 25 years covered by MD&DI. The 1970s and Early 1980s National concern over rapidly rising costs for healthcare resulted
in the late 1970s in voluntary hospital cost-containment efforts,
regional planning for health facilities and services, and certificate-of-need
justification for many capital expenditures. The Reagan administration
has undertaken a general review of government regulations, including
many that affect medical equipment producers. The object is to
do away with unnecessary regulatory burdens where possible. This
policy improves the climate for manufacturers of healthcare products. The 1980s Continued technological innovation should provide the primary
stimulus to growth during this period, as well as increased demand
for healthcare services and equipment as a result of the aging
of the population. The new hospital cost-containment regulations
are certain to have a restraining effect on industry growth. The industry’s growth pattern, strongly influenced by medical
and healthcare regulations, has shown sharp increases in shipments
every 5 years since passage of the Medical Device Amendments in
1976. In the industry’s boom years of 1977 and 1982, shipments
rose 86% and 26%, respectively. The 1990s The U.S. medical device industry has shown phenomenal growth in the last quarter century. The graph shows the growth for each sector. Values are estimated for 2002–2004 (click to enlarge). A comparison of 1979 and 2004 shows only slight changes in the percentage of each sector’s value of shipments during the last 25 years (click to enlarge). Despite the slow growth in the domestic economy and buyers’
resistance in a cost-conscious healthcare environment, the value
of shipments by the U.S. medical equipment and supplies industry
rose more than 8% in 1993. This increase was partly due to the
strong overseas demand for U.S. medical equipment. The 21st Century The U.S. medical device industry is undergoing radical change
in direct response to the factors that affect it. The trends that
will affect the device industry the most in the next 5 years are
cost containment, consolidation, demographics, the regulatory
environment, and global financial instability. …The elderly
will influence the direction of the industry through their particular
health needs. The next 5 years look very positive for the industry
as it takes advantage of a more liberal regulatory environment,
an aging population, shifts to home healthcare and alternative
sites, and more efficient manufacturing and distribution. Article appeared in August 2004 issue of Medical Device &
Diagnostic Industry |
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