Medical Equipment Distributors NAICS 423450
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Industry Summary
The 8,500 medical equipment distributors in the US sell and distribute a broad range of medically related products, principally to hospitals, physician and dental practices, alternative care and rehabilitation facilities, and directly to the home healthcare market. Major categories of products include medical/surgical instruments and equipment, medical and hospital supplies, and dental equipment and supplies.
Complex Billing and Record Keeping Requirements
Medical equipment distributors are frequently subject to many stringent and complex billing and record-keeping requirements in order to substantiate claims for payment under both government and private insurance healthcare reimbursement programs.
Growing Industry Consolidation
The medical, dental, and hospital equipment and supplies distribution industries have undergone consolidation in recent years.
Recent Developments
May 2, 2025 - Manufacturer Outlines Response to Trump Administration Tariffs
- Medical device manufacturer GE HealthCare has outlined strategies to mitigate the impact of Trump administration tariffs rather than pass the cost of the tariffs on to customers. The company is expecting revenue to decrease by about $500 million in 2025 due to the Trump administration’s imposition of tariffs. The most significant are the bilateral China tariffs, amounting to about $375 million, according to GE HealthCare vice president and CFO Jay Saccaro. The company said that it plans to offset the impact of tariffs by taking measures including decreasing imports between China and the US with multi-sourcing; using US duty drawback on re-exported goods, free trade zones, and bonded logistics; and by actively driving material price decreases to offset tariff related inflation.
- Medical device makers, hospitals, and other healthcare stakeholders are seeking exemptions from tariffs that have been imposed by the Trump administration. About $303 billion of imported drug, biotech, and device industry goods entered the US in 2024, $294 billion of which entered duty-free, according to professional services firm PwC. Healthcare's heavy reliance on foreign countries for raw materials and manufacturing means new levies could result in supply chain disruptions and higher prices for providers and consumers, according to PwC.
- Medicare payments to Medicare Advantage plans are expected to increase an average of 3.7%, or over $16 billion in 2025, according to the Centers for Medicare & Medicaid Services. Medical equipment distributors are likely to benefit from the increase in expenditures. The finalized the Calendar Year 2025 Rate Announcement for Medicare Advantage is projected to result in payments of between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.
- Medical equipment distributor industry employment and average wages for nonsupervisory employees decreased slightly during the first month of 2025, according to the US Bureau of Labor Statistics. Professional and commercial equipment distributor sales remained above pre-pandemic levels during 2024, according to the US Census Bureau (CB). Medical equipment distributors moderately increased their prices during 2024, according to the BLS.
Industry Revenue
Medical Equipment Distributors
Industry Structure
Industry size & Structure
The average medical equipment distributor employs 35-36 workers and generates $15 million in annual revenue.
- There are about 8,500 distributors with total sales of $129 billion and 310,000 employees.
- The hospital equipment and supplies market is dominated by the influence of Group Purchasing Organizations.
- The physician office-based practice market is increasingly being influenced by the growth of Integrated Healthcare Networks, as more independent physician practices merge and consolidate.
- Dental practices have generally remained small and independent, leaving distributors with unique challenges in servicing a large number of small, scattered customers efficiently and profitably.
- The three largest medical/dental product distributors are Owens & Minor, Henry Schein, and Patterson Companies.
Industry Forecast
Industry Forecast
Medical Equipment Distributors Industry Growth
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