New products and demand from an older population will lead to industry growth.
New York, NY (PRWEB) March 23, 2014
The Medical Supplies Wholesaling industry distributes dental and medical supplies and equipment intended to improve or maintain health. Demand for wholesale activities associated with these products is highly correlated with demand for the products themselves. The median age of the population has risen over the past five years; as a result, the number of age-related nonelective procedures performed in the US increased as well. Accordingly, the Medical Supplies Wholesaling industry has exhibited robust revenue growth in the five years to 2014, with the exception of a temporary decline during the recession. In particular, demand for medical devices used in elderly care (including neurological and cardiovascular products) has increased over this period and is expected to continue rising during the next five years.
In addition to increased demand, rising product prices have also contributed to industry growth. Over the past five years, according to IBISWorld Industry Analyst Jocelyn Phillips, “Industry revenue is expected to increase an annualized rate, including a significant increase during 2014.” However, “rising product prices are largely a result of increasing input prices,” says Phillips. Due to these more expensive inputs, as well as stringent government regulations, average industry profit margins have remained nearly flat in the past five years, consistently hovering at a percentage of revenue.
IBISWorld estimates that the top four firms in the Medical Supplies Wholesaling industry will generate about one-fifth of total industry revenue. Over the five years to 2019, IBISWorld expects industry revenue to grow at an average annual rate. Revenue is projected to rise as healthcare providers that delayed major medical purchases during the recession begin to invest in newer equipment. New product development by medical device manufacturers will also contribute to industry growth by offering solutions to previously unsolved health issues. Mergers and acquisitions among medical device manufacturers will cause wholesalers to consolidate in order to maintain negotiating power and meet the demands of newly expanded customers. While consolidation will help industry firms reduce costs, profitability is still expected to suffer moderately from healthcare reform legislation, which imposed an excise tax on medical device manufacturers in January 2013.
For more information, visit IBISWorld’s Medical Supplies Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Medical Supplies Wholesaling industry purchase medical and surgical equipment, instruments and supplies, store these items at distribution centers, and deliver these products and related services to medical and dental practitioners, clinics and hospitals. The industry does not handle instruments and goods that are distributed to ophthalmologists, optometrists and opticians.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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