Medical Device Link.

Originally Published MDDI April 2003

NEWSTRENDS

Gregg Nighswonger

Figure 1. The medical device industry is estimated to be growing at a compound annual rate of approximately 8% (Click to enlarge).

The medical device industry is, by most measures, faring better in the current economy than most business sectors. For example, the United States has continued to maintain a trade surplus of $4 billion to $5 billion every year from the sale of medical devices to foreign markets. Yet the industry is continuing to be shaped by a number of key factors. These influences were the topic of a Webcast in February by Frost & Sullivan that offered one view of what the industry may look like in 2013. Discussion also included forecasts for some key business sectors. 

Cardiovascular products remain the largest single sector of the device industry, according to presenter Charlie Whelan, industry manager for Frost & Sullivan. Says Whelan, “The market is one of the most competitive and rapidly changing in the industry, and is expected to grow significantly in coming years.” In addition, “Orthopedics will remain one of the largest and fastest growing device sectors,” he says. “Reconstructive implants are the largest segment of that market and it will continue to grow.” Whelan adds, however, that growth rates in the spinal and biologics segments will be much higher. He predicts that devices that enable minimally invasive procedures in all areas of medicine will also experience strong growth—especially as these procedures become the standard of care for more treatments. 

A number of factors are shaping the device market that will exist in 2013, including changing disease patterns and populations. “Certainly, as the number of aging Americans continues to grow, cost-containment and the ability to maintain adequate staffing and facility capabilities will remain a priority,” says Whelan. 

Frost & Sullivan’s analysts expect that medical research and technology will be focused less on infectious diseases and acute conditions and more on the expensive and debilitating effects of chronic disease. Manufacturers are expected to “respond in kind with better technology to reduce costs and improve the lives of these patients,” says Whelan. “We are likely to see greater advances in the development of restorative or implantable devices that allow patients with chronic conditions to regain more of their original health.” He cites the development of Medtronic’s artificial pancreas and AbioCor’s artificial heart as examples of this trend. 

AbioCor’s Powerheart is part of a trend toward developing restorative devices.

Analysts also suggest that evolving synergies between information technology, medical imaging, pharmaceuticals, and medical devices will result in therapies that take clinical benefits to a new level. Says Whelan, “Drug eluting stents and telemedicine are two examples of this growing trend.” He adds that the number of cosmetic procedures performed in the United States has grown from approximately two million in 1997 to more than nine million last year. “As patients continue to make their own quality of life an important healthcare priority and are willing to invest their own money in these treatments, manufacturers of associated devices will experience significant growth,” he says.

Whelan also offers a number of business strategies to aid in launching new products, capturing market share, and ensuring growth in the years ahead. Among these is the use of continuum-based methods for assessing the potential for developing a new technology. Says Whelan, “By examining the context in which treatment for a patient’s condition is delivered, manufacturers can spot ways to improve treatment with new technology.” 

Whelan cites the growing U.S. nursing shortage as an example of how continuum-based strategies can be used. “The United States faces a serious shortage of nurses and primary-care physicians that will continue to have serious consequences on our healthcare infrastructure and ultimately lead to higher healthcare costs because of a lack of sufficient preventative care,” says Whelan. He adds that the American Association of Critical-Care Nurses expects that there will be more than one million vacant nursing positions by 2008. In addition, only one-third of practicing doctors in the United States are devoted to primary care, compared with other countries where primary-care physicians are usually in the majority. 

According to Whelan, “manufacturers should use continuum-based strategies to identify where there are significant labor limitations in care delivery because of shortages of nurses and doctors. After identifying these needs, manufacturers will be able to successfully launch technologies such as remote patient monitoring, minimally invasive products that allow for outpatient procedures, and products that allow patients to care for themselves into a market eager for ways to save time, effort, and money.” In essence, the role of medical technology will be to fill the gap created by the “labor voids” among nurses and physicians. 

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