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The U.S. Medical Equipment Industry: 4 Key Insights

Posted by IndustrySelect on Tuesday, September 10, 2019

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3 MIN. READ

Medical equipment manufacturers provide much more than just scalpels and stethoscopes. These companies offer a vast array of devices and tools utilized by the health care industry. The following are four things you should know about this sector.

1. Regulations Abound

Health care is one of the most highly regulated industries in the United States. When it comes to new devices and tools, each one must go through a rigorous FDA approval process. Categories range from Class I to Class III, and regulatory controls increase with each level. This process often takes millions of dollars and years of testing, depending on the class of the device.

2. Slow and Steady Stays Safe

Medical and surgical instrument suppliers have a slower product release cycle than most manufacturers. Compared to tech firms, where partially completed beta versions of software are rapidly released and improved on the fly, medical and surgical instrument companies (including those that heavily rely on tech) move at a deliberate pace. This is to ensure that products are safe for various populations under dozens of unique circumstances.

3. A Good Investment

Traditionally this regulatory barrier to entry meant that only well-established companies could afford to build complex new medical instruments. However, recent interest from venture capital firms and investors has made it easier for smaller start-up companies to enter the market. With companies gaining access to sufficient funding to get through FDA testing, a deluge of breakthrough ideas and technologies is now pouring into the health care market.

4. Growth is Guaranteed

Failure to have the right tools on hand can cost a patient's life, so sales are driven by necessity rather than desire. This tends to insulate the industry against economic downturns. After all, a person in need of surgery cannot wait for the stock market to recover or a trade war to end.

A global increase in lifespan has also occurred over the last few decades. In both modern and developing nations, improved nutrition, sanitation and health care are adding years to people's lives. The increase means more individuals will require health care over a longer time overall, plus a larger population of elderly who will, on average, require more care than younger individuals.

Evidence of these factors at work can be seen in current sales figures. Despite the recent display of brinksmanship in the trade war with China, industry sales exceed $263 billion and show slight growth. According to data collected by MNI, compiler of the industrial data that powers IndustrySelect, the number of employees sector-wide rose 2.48% in the same period. This is even more impressive considering the sector's substantial international distribution. While manufacturing overall has an approximate 29% international distribution rate, the rate for medical and surgical instrument suppliers is over 66%.

For More Information

IndustrySelect can help your marketing team make the right connections and improve efficiency. All of the data in this article was collected by MNI. The same level of detailed information is available to IndustrySelect subscribers. Subscribers can use up to 30 data points to help them identify and pre-qualify the best leads. Profiles also include the names, titles, and email addresses for hard-to-reach executive decision makers. With access to over 400,000 manufacturers in our database, you are certain to find the company you are seeking. Try out a demo today!


Article Sources:

http://www.healthdata.org/news-release/life-expectancy-increases-globally-death-toll-falls-major-diseases


https://www.morganstanley.com/ideas/healthcare-costs-2016

https://www.marketsandmarkets.com/medical-device-market-research-11.html

https://www.prnewswire.com/news-releases/global-medical-device-market-2018-with-forecasts-to-2023---driven-by-healthcare-expenditure--technological-development--aging-population--chronic-diseases-300634442.html

https://www.trade.gov/topmarkets/pdf/Medical_Devices_Executive_Summary.pdf

https://www.marketwatch.com/press-release/home-medical-equipment-technologies-market-2019-global-analysis-industry-size-share-leaders-current-status-major-key-vendors-and-trends-by-forecast-to-2025-2019-05-17

https://www.mddionline.com/medical-device-distribution-international-market

https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html

https://mercercapital.com/insights/5-trends-to-watch-in-the-medical-device-industry-in-2018/

 

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