An increasing number of elderly Americans with chronic conditions has supported growth.
New York, NY (PRWEB) June 10, 2014
Manufacturers of transcutaneous electrical nerve stimulation (TENS) devices, which provide electric currents to the nerves to stimulate them for therapeutic purposes, have experienced a significant threat to revenue growth during the past five years. Prior to 2012, industry firms enjoyed robust growth, as the expanding elderly population (who use TENS machines for chronic pain management) provided a growing market for industry devices. However, according to IBISWorld Industry Analyst Jocelyn Phillips, “a 2012 Medicare decision to eliminate coverage of industry devices prescribed for chronic lower back pain dealt a severe blow to the industry, which relies on Medicare for a significant portion of its funding.”
As a result of this change, industry growth slowed considerably and is expected to remain subdued during the next five years. Revenue for TENS machine manufacturers is expected to increase just 1.0% in 2014, to $502.2 million. Robust pre-2012 revenue growth, coupled with the growing elderly population, higher disposable incomes and increased access to private health insurance will likely keep annualized industry revenue growth afloat at 2.9% during the five years to 2014. However, even that modest growth is expected to slow during the five years to 2019.
Average industry profit margins managed to inch up during the five years to 2014, as small, low-profit companies exited the industry, leaving behind firms with higher margins. However, profit margins will likely decrease during the five years to 2019 due to both the continued imposition of a 2.3% medical device excise tax and the industry's increased spending on wages, as companies scramble to create cutting-edge devices to compete with low-cost imports. Nonetheless, there may still be hope for the TENS Machine Manufacturing industry. “The portion of the population aged over 65 is expected to increase from 2014 to 2019, potentially expanding the market for industry devices,” says Phillips. Disposable income is also expected to increase, allowing even those patients left unassisted by Medicare to consider buying industry devices out of pocket. Moreover, Medicare is continuing to approve TENS device payments for clinical trials designed to assess the therapy's effectiveness, and any potential successful outcome of these trials may pave the way for expanded Medicare coverage of industry products.
For more information, visit IBISWorld’s TENS Machine Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The TENS Machine Manufacturing in the US industry manufactures transcutaneous electrical nerve stimulation (TENS) devices. These machines provide electric currents to the nerves to stimulate them for therapeutic purposes, mainly for pain relief.
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