FORBES: Medical Technology Sales To Hit $500B Within Five Years

Despite global challenges and escalating consolidation, the medical device and technology market will eclipse $500 billion in sales by 2021, according to a new analysis.

evaluate-medtech-sales-2015-2022By Bruce Japsen, Forbes, Contributor

The optimistic outlook comes despite the economic slowdown in China and various financial challenges in the European Union like Brexit and, most recently, the troubles of banking powerhouse Deutsche Bank. Meanwhile, large device makers have consolidated amid a downturn of medical device sales.

But a new report by market research firm Evaluate expects global medical device and technology growth to be five percent or more annually until 2022, reaching nearly $530 billion . “The sector is already seeing a resurgence of smaller acquisitions on which start-ups, a significant source of disruptive new technologies, depend,” Ian Strickland, EvaluateMedTech product manager said of the report, released at the Advanced Medical Technology Association (AdvaMed) annual MedTech meeting this week in Minneapolis.

In recent years, large medical device makers have largely seen flat or falling sales. From 2014 to 2015, Evaluate said 12 of the 20 largest companies in the “medtech” space had negative growth , contributing to investor pressure to merge and cut costs as health insurers and government health programs squeeze payments for devices.

In the first half of this year, Evaluate said merger and acquisition activity dropped nearly 80 percent to $17 billion. This year’s consolidation pace is in sharp contrast to last year’s “flurry of mega mergers” that led to Medtronic becoming the largest company with nearly $29 billion in sales of devices after its purchase of Covidien.

Perhaps the only “sector-changing” deal in the pipeline is the pending acquisition by Abbott Laboratories of St. Jude Medical should that deal be completed. There have recently been investor concerns following last week’s disclosure by St. Jude that batteries have malfunctioned in its implanted heart defibrillators.

“The device industry is growing reasonably rapidly, and the calming of the M&A scene does not pose a problem for the expected growth,” EvaluateMedTech’s Strickland said.



Categories: Technology, Trends

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