Changing regulations for medical devices will inhibit growth, but revenue will remain stable.
Los Angeles, CA (PRWEB) April 15, 2012
The Medical Device Manufacturing industry has enjoyed strong revenue growth recently and is forecast to continue expanding in the years ahead. Since 2007, revenue increased at an average annual rate of 12.8%, and sales are expected to grow 7.4% in 2012 alone, to $64.7 billion. The US economic downturn did little to deter hospitals and other customers from purchasing medical devices, according to IBISWorld industry analyst Nima Samadi. In fact, more industry companies gained sales in 2008 and 2009 than lost them. The aging US population is a major factor driving demand, as the occurrence of health issues that require medical devices is higher in the elderly population. This demographic is forecast to expand further as a percentage of the total population during the five years to 2017, which will help maintain industry growth.
But revenue in the Medical Device Manufacturing industry will not grow as quickly over the five years to 2017. The changing regulatory environment will be the main hindrance, Samadi said. For example, the Patient Protection and Affordable Care Act of 2010 will place an excise tax on medical devices, eating into revenue and reducing profit. Also, potential reform to the approval process for new devices will likely hamper innovation and encourage more companies to shift functions overseas.
Foreign outsourcing of manufacturing, research and development and other operations, combined with industry consolidation, is forecast to decrease the number of industry operators during the next five years. This industry has traditionally had a low level of industry concentration, with no one firm dominating. Small operators are common in this type of industry, and typically specialize in developing technology and products for a niche area. Larger players frequently seek to acquire these firms to expand their product range or gain access to a particular technology. But during the five years to 2012, consolidation has swept the industry, with the number of companies decreasing at an average annual rate of 5.5% to total 828. Meanwhile, emerging markets like China and Brazil will attract medical device manufacturers, as US customers face more stringent Medicare reimbursement requirements and other cost-cutting pressures. For more information, visit IBISWorld’s Medical Device Manufacturing report in the US industry page.
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IBISWorld industry Report Key Topics
This industry includes manufacturers of electromedical and electrotherapeutic apparatus, such as magnetic resonance imaging equipment, medical ultrasound equipment, pacemakers, hearing aids, electrocardiographs and electromedical endoscopic equipment. The industry also manufactures irradiation apparatus and tubes for applications such as medical diagnostic, medical therapeutic, industrial, research and scientific evaluation.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.