Economics Will Drive The Evolution Of The Medical Device Industry
There has been a fundamental structural shift in the US medical device industry; economics are the driving force as early-stage financing has dried up, reimbursements have been steadily reduced and hospitals and clinics are forced to operate more efficiently. Technology Commercialization Group (TCG) looks at these changes and the implications for both large and small companies.
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Medtech M&A activity has been on the rise for several years along with a surge in the number of higher-valued mega-deals, those worth at least $1 billion. Yet a survey of all deals with known values indicates that median deal value has actually declined.
The M&A bonanza for companies in the medtech sector continued into 2015 and there is no end in sight in 2016 as manufacturers seek to augment and fine-tune portfolios to meet the new demands of payers and providers. Longer term, there are signs of a change in the top global medtech rankings.
Medical device companies working on the global stage are undergoing price and innovation productivity pressures just at the time that the markets are demanding a different type of service delivery from their suppliers. Smart manufacturers are reacting positively, with new commercial models, but they remain the exception to the rule, says the Boston Consulting Group, which is soon to release the second edition of its commercial benchmarking initiative.