Medical Device Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,900 medical device manufacturers in the US produce a range of products designed to diagnose and treat patients. Medical devices range in nature and complexity from simple tongue depressors and bandages to complex programmable pacemakers and sophisticated imaging systems. The key products include surgical appliances and supplies, surgical and medical instruments, electro-medical equipment, in-vitro diagnostic substances, irradiation apparatuses, dental-related products, and ophthalmic goods.

Challenges of Complex Regulations

Medical devices are subject to extensive regulation in the US by the FDA, and by comparable government agencies in other countries.

Developing New Hybrid Technologies

New hybrid technologies that incorporate pharmaceutical products with traditional medical device products are becoming popular.

Industry size & Structure

A typical medical device manufacturer generates $10 million in annual revenue and has about 35-36 employees.

    • The overall medical device manufacturing industry consists of about 8,900 companies with $92 billion in sales and 320,000 employees.
    • The two largest segments of the industry, surgical and medical instruments and surgical appliances and supplies, consist of about 2,700 companies with over $75 billion in sales and 245,000 employees. These segments are the primary focus of this profile.
    • The states with the highest number of medical device companies include California, Florida, New York, Texas, Illinois, Indiana, Pennsylvania, Ohio, North Carolina and Minnesota.
    • Major US medical device companies include Medtronic, GE Healthcare Technologies, Johnson & Johnson, Boston Scientific, Baxter, Becton Dickinson, Beckman Coulter, Abbott Labs, and Stryker Corporation.
                              Industry Forecast
                              Medical Device Manufacturers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 1, 2022 - Device Security Needs Improvement
                              • The majority of medical device manufacturers (MDMs) don’t conduct routine third-party risk assessments, according to a report from the Medical Device Innovation Consortium. The findings indicate that “cybersecurity maturity varies significantly between MDMs,” and as a whole, the industry “has a low level of cybersecurity maturity, especially concerning design control.” Specific recommendations offered in the report depend on budgets, priorities, and demographics of the manufacturer, but there’s an overwhelming need for most vendors to improve organizational leadership on security policies and procedures for products, establish end-of-life dates for devices, and remediate medium to severe vulnerabilities within 60 days.
                              • Medical device companies are increasingly catering to ambulatory surgery centers (ASCs), with financing plans for equipment and even teams to help construct and design surgical centers, according to MedTech Dive. Companies have started offering per-procedure prices, leases, and payment plans for larger, pricier devices, such as surgical robots. There are now more than 6,000 ASCs, up from more than 5,000 in 2010, according to the ASC Association, a lobbying group for the facilities. Orthopedic procedures in particular have shifted to outpatient centers, driven in part by the pandemic and by Medicare’s increased willingness to pay procedures performed at ASCs. Total knee replacements were added to Medicare's list of outpatient procedures in 2020, and total hip replacements in 2021.
                              • Supply chain issues are likely to have a more severe impact on medical device manufacturers, according to industry experts. Medical device manufacturers typically must comply with more regulatory standards, many of which have low tolerance for variance, than other electronic product manufacturers. This means that if a component is in short supply, they cannot just replace it with something similar. Medical device components must be approved with the initial design by the regulatory board for that jurisdiction.
                              • Experts note that there are ways to decrease the impact of supply chain disruptions. The manufacturer should try to be as vague as possible about device component specification during the design phase. This will make it easier to source spare components while still meeting the approved design requirements, meaning that the safety and efficiency of the final product will not be compromised. For manufacturers already past the design stage, the best way to combat the negative consequences of shortages is by keeping track of stock and increasing inventory whenever possible – if a popular component becomes available, buy as much as you can afford. Invest in Supply Chain Management (SCM) software can help track inventory, manage shipping, and keep updated on which stocks are decreasing fastest.
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