Medtechs At The Wheel In New Health Care Landscape

2016 was a year of surprise and change in political circles, but that's nothing new for the medtech industry, which over a number of years has become accustomed to health care systems demanding different and ever-higher levels of service. Smart medtechs have been ahead of the curve, but the whole industry now factors in clients' wider needs in a holistic approach to patient care. Many companies' current M&A policies are already reflecting the changes to come.

• Medtech M&A deal volumes in 2016 matched those of 2015, with Abbott Labs grabbing most of the headlines with the second biggest ever medtech takeover bid. But deal numbers were relatively high, and orthopedics companies were especially active in M&A.
• The need for companies to reinvent themselves, adopt collegiate approaches to business dealings with providers and maximize the benefits that genomics, big data and the Internet of Things present are new pressures that are being added to the perennial challenges in regulatory and reimbursement circles.
• 2017 promises to offer both the toughest and most unpredictable of operating environments for medtech companies; however, manufacturers seem better prepared and better armed to face these stiffer challenges in a market set to be worth $360 billion. It could be said that the measures they are taking are giving them back control of their own futures.

"As it stands, we can see that if we don't intervene strongly, health care systems are going to come to a full hard stop," Rob ten Hoedt, chair of Medtech Europe (MTE), told In Vivo during MedTech Europe's 2016 MedTech Forum in Brussels in December 2016. He was ostensibly referring to European health care systems, but the message is generic and globally applicable, especially to mature health care delivery systems.

The current situation is unsustainable with health care expenditure going up 3 to 4 to 5% per year and average GDP languishing far behind. That cannot last, says ten Hoedt (also Medtronic PLC executive vice president and president of EMEA). "We all need to come together on the subject of health care and work out how to reorganize ourselves in that space."

It's easier to say than do, but it is nonetheless vital if health care in general – and medtech in particular – are to play their full part in the Fourth Industrial Revolution, which is all about making the best use of interconnectivity. This was incidentally the theme of the MTE 2016 Forum.

Integrated health care is part of the solution, the MTE president believes. "Right now our very siloed fee-for-service [FFS] model is structured in such a way that there is no one entity – company or hospital – that's responsible for and owns the true outcomes of the patients." Clinical trials on a selected subset of patients are all very well, but then the product is released for use in the whole population. "And then we don't track and trace what is the impact of all these investigations and interventions," noted ten Hoedt.

It's a tough time to be in global medtech (when is it not, some rightly ask). Perhaps tougher than it’s ever been: demand is changing and rising; prices are under pressure; margins are under pressure; global exchange rates have gone haywire; and scrutiny of medtech is more comprehensive than ever, with no shortage of subeditors willing to craft a negative headline about the industry. And the barriers to market entry are ever-higher, in both the pre-market regulatory phase and post-market HTA and reimbursement phases.

These factors are encouraging manufacturers to change their approach, to get wise, in the knowledge that the delivery and commercial models of the past will not cut it in 2016–17 and beyond. They fear no longer remaining competitive or retaining business unless they factor in how their own customers are having to cope in the multi-pressured health care environment.

The key in 2016 and years to come was and will be providing the primary, acute and chronic settings with products, services and solutions that can be integrated easily and advantageously into practice. Improve clinicians' performances and patient outcomes cost-neutrally – or better – and the door will open.

Still King Of The Hill

In this evolving world, clinicians are still king of the hill, but economic administrators are snapping at their heels, curtailing the decision-making freedoms that they have routinely enjoyed all of their working lives.

Surgeons are facing the new challenge of robotic surgery in the workplace; clinicians and nursing staff are adapting to using remote care in the inpatient and community setting; and point-of-care molecular diagnostics are becoming more engrained. These are examples of evolution that was once seen as a threat to the norm. But now they are seen as opportunities in a holistic health care system.

Steering through the new health care landscape is a challenge to medtech manufacturers, but encouragingly, they are no longer merely being swept along, but are increasingly drivers of the change. Many are even helping to plot the course on a journey that, however, has many risks: over-committing, under-committing, committing too late, or too early, and thereby losing competitive position. And the manufacturer also worries: are health systems actually ready? Can they budget for and be responsive to innovations? Are they being driven by people with enough vision?

The same goes for R&D directions, with all eyes still on how the new themes of the day – genomics, big data integration (91% of companies are using big data and analytics as part of their deal process, according to EY), biosensors, bioinformatics, the Internet of Things (IoT) – will affect traditional medtech businesses that are grappling with how or whether to get involved. US-based ZS Associates Inc. predicts that some manufacturers will be content to focus on what they do best: striving to develop a best-in-class solution to meet a specific demand, whereas others will identify a bigger role in health care delivery. (Also see "The US Health Care Market In Transition For Medtechs" - In Vivo, 21 Aug, 2016.)

None of these concerns deter the likes of those developing the solutions that the US Cleveland Clinic thinks will be the technology game changers in 2017 (see below – Medtech Talking Points For 2017).

All of which means the entrepreneur or technology inventor must view the consumer's end-point as the start-point of their own research, because starting at their own beginning, as manufacturers have done in the past, is no longer a guarantee of commercial success.

But just how well have these new realities been factored into R&D and commercialization plans as industry continues to strengthen its case to be a full decision-making partner in the wider health care stakeholder spectrum?

2016 Head-Turners In The M&A Field

It was a year of extremes in terms of medtech M&A: a slow, steady and largely unexciting script, punctuated now and again by blockbuster-class deals, and then finishing with a flourish. On a macro, all-industry level, the end-of-year M&A surge helped make 2016 the second-best year for dealmakers since the financial crisis of 2008–11. Brexit, Trump, the Italian constitutional referendum (defeated) and the uncertainty they engendered did not seem capable of halting the boom in global takeovers.

This is set to be the story in 2017, and as in 2016 for medtech M&A, it's not a question of if, but whom. Informa's Strategic Transactions database of M&A, deals and funding decisions in the medtech space documents around 80 M&A deals in the first 50 weeks of 2016, including Abbott Laboratories Inc.'s late April bid for global top 20 company St. Jude Medical Inc., the standout deal of the year. [See Deal]

As 2016 wound down, the expectation of the Abbott-St. Jude deal completion confirmation rose, and on December 30, Chinese anti-trust regulators granted conditional approval to the $25 billion merger, subject to the sale of St. Jude’s small vessel closure device business within 20 days of the deal closure. US FTC clearance had been granted shortly prior to this, and EU approval in fall 2016. The green light came on January 5.

But St. Jude was not the only big M&A plan in Abbott's strategic briefcase last year. Neither was St. Jude the only active mega-M&A player in 2016, as Medtronic and Stryker Corp.joined it to form a trio of medtech majors who dominated high-value M&A activity. Recent history shows the latter two have led the way in terms of strategic deal volumes, and of course Medtronic wrote itself into the record books in fourth-quarter 2014 with its tax inversion deal to acquire Covidien Ltd.(See Exhibit 1.)

Exhibit 1

Top Medtech M&A Deals By Value – The $1 Billion Club Of 2016

Strategic Transactions | Pharma Intelligence, 2017

Acquirer	Acquiree	Business	Deal Value ($bn)	Date
Abbott Labs (US)	St. Jude Medical (US)	Cardiovascular (AF, structural heart, HF) and neuromodulation	$25 – cash and shares deal	April 28 (completed Jan. 5, 2017)
Canon Inc. (Japan)	Toshiba Medical Systems Corp. (Japan)	Diagnostic imaging and medical technology	¥665.5 ($6) – 1.7x sales of $3.5bn	March 17
Johnson & Johnson (US)	Abbott Medical Optics Inc. (US)	Cataract surgery, laser refractive surgery and consumer eye health	$4.325	Sept. 16 (closure due Q1 2017)
Stryker (US)	Sage Products Inc. (US)	Disposables, to prevent HAIs	$2.775 paid to PE firm Madison Dearborn Partners – 6.5x sales of $430m	Feb. 1
Svenska Cellulosa Aktiebolaget SCA (Sweden)	BSN Medical GMBH(Germany)	Wound care, vascular and orthopedics	€2.74 ($2.82) – including debt – paid to private equity investor EQT VI	Dec. 18
Fujifilm (Japan)	Wako Pure Chemical Industries (Japan)	Regenerative medicine, clinical diagnostic reagents, specialty chemicals and equipment	¥154.7 ($1.31)	Dec. 15
Stryker (US)	Physio-Control International, Inc. (US)	Monitors, AEDs, defibrillators and CPR devices	$1.28	Feb. 16 (completed on May 4)
Terumo (Japan)	Abbott assets, in conformity with St. Jude takeover	Vascular closure (Angio-Seal and Femoseal) and steerable sheath (Vado) devices	$1.12	Oct. 18
Medtronic (Ireland)	HeartWare (US)	Cardiovascular – VADs	$1.1bn	June 27 (completed on Aug. 23)
ICU Medical Inc. (US)	Hospira Infusion Systems (US)	Infusion therapy	$1bn ($400m in stock and $600m cash) paid to Pfizer Inc.	Oct. 6
Zimmer Biomet (US)	LDR Holding Corp. (France)	Devices for treating spine disorders	$1bn ($37 per share)	June 7
Teleflex Inc. (US)	Vascular Solutions Inc. (US)	Complex interventions, radial artery catheterizations and embolization procedures	≈$1bn ($56 per share)	Dec. 5

Back To The Front – Abbott M&A In 2016

Abbott's $25 billion bid for St. Jude almost took us back 10 years to the tussle between Boston Scientific Corp.and Johnson & Johnsonto acquire troubled cardiac device maker Guidant Corp. Boston finally won that bidding battle only to soon after become embroiled in recalls, multi-year write-downs and loss of business value that was to last for years. In losing out, J&J was spared those travails and also gained a $600 million legal payout in fall 2015 over Boston's violation of takeover rules. (Also see " Boston settles Guidant spat with JNJ and emerges not too dented " - Medtech Insight, 18 Feb, 2015.)

As businesses, St. Jude and Guidant are not to be compared, notwithstanding the ICD and CRT-D battery depletion issues revealed by St. Jude in November 2016. (Also see "St. Jude Warns Of Battery-Depletion Issues With Some ICDs" - Medtech Insight, 12 Oct, 2016.) Rather, the common denominator is Abbott Laboratories, which back in 2006 won rights to acquire Guidant's vascular business for $4.1 billion as part of Boston's 2006 takeover package, as well as a 4% stake in Boston.

Abbott thus emerged as the quiet winner in 2006 and as the not-so-quiet victor in 2016. It is now targeting cardiovascular giant status along with Medtronic, and Boston Scientific, which is finally re-emerging from its poor decision a decade ago (its share price has been recovering slowly, but in week 52 of 2016 it was still only 85% of January 2006 levels). Abbott would thus become one of the three world leaders of a cardiovascular market segment valued at $30 billion, and growing in the mid-single digits. It paid St. Jude shareholders $46.75 in cash and 0.8708 Abbott common shares for each share held.

Abbott itself has built a strong position in mitral valve repair with its MitraClip transcatheter device, but adding St. Jude's portfolio would broaden its presence in virtually every aspect of cardiovascular care, significantly adding CRM and HF, where it was not represented. It also brings major strengths in ICDs, pacemakers and HF monitoring (boosted via the 2015 purchase of Thoratec Corp.). Reed Miller, an editor on In Vivo's sister publication Medtech Insight, notes that St. Jude is a leader in mechanical heart valves and also brings into the Abbott portfolio neuromodulation devices for a variety of neurological indications. (Also see "The Rumors Were True: Abbott Buys St. Jude For $25b To Create Third Cardiovascular Giant " - Medtech Insight, 28 Apr, 2016.)

In a big year for Abbott Labs, the company also scooped up cardiovascular device maker Kalila Medical the day after announcing its $5.8 billion acquisition of Alere Medical Inc., which, as reported elsewhere in this month's issue of In Vivo, hit several problems since the January 2016 takeover agreement, and a year later was still unresolved. (Also see "MTI 100: Medtech Giants Trade Places" - In Vivo, 8 Jan, 2017.) [See Deal]

So what? By 2030, more than 40% of US adults are expected to have cardiovascular disease. More than 8 million of them will be HF patients, and annual US HF expenditure is already some $39 billion. The combined Abbott-St. Jude unit, which will have annual sales of roughly $8.7 billion, is expected to hold a leading or co-leading position across a broad range of medical technologies. This combined pipeline is aligned to health care and demographic trends, and will make providers more efficient and reduce costs for payers. Hospitals are increasingly looking to buy across clinical service lines from individual vendors as a cost-saving approach.

These are the sentiments of Abbott CEO Miles White, who also sees benefits for the shareholders in the creation of "significant value to enhance global scale, infrastructure and capabilities, and better positions for Abbott to deliver top-tier growth and income for shareholders over the long term.” Analysts expect Abbott's mid-single-digit revenue growth to continue, but they note that uptake of the St. Jude CardioMEMS HF monitoring system has failed to impress. (Also see "St. Jude's CardioMEMS Showing Results In HF" - In Vivo, 8 Dec, 2015.) Nevertheless, they are positive on the deal, for the foregoing reasons, and say it will boost Abbott’s under-scaled and under-performing device business.

Back To Form – Stryker M&A In 2016

Stryker's M&A record is second to none in terms of M&A deal volume in recent years, having boosted its position as global leader in joint replacement and trauma against rivals Zimmer Biomet Holdings Inc., DePuy Synthes/Johnson & Johnson and Smith & Nephew PLC, with a continuous stream of business purchases. Its recent M&A deal flow has included: Trauson Holdings Co. Ltd. and robotics company MAKO Surgical Corp. (both in 2013) and Patient Safety Technologies Inc., Pivot Medical Inc., Berchtold Holding AG and Small Bone Innovations Inc. (all in 2014).

After a slow 2015 in terms of Stryker M&A, with just CHG Hospital Beds Inc. added, the group's M&A activity in 2016 was ramped back up to 2014 levels. However, commentators view Stryker's 2016 crop as rather bottom-line oriented. As to Stryker's top line, it has continued to grow impressively, with orthopedic sales of $4.9 billion ($4.22 billion excluding spine) and MedSurg sales of $3.9 billion. With the balance coming from spine neurotech, group sales were just short of $10 billion in 2015 and will breach that for 2016 when figures are released.

So, in 2016, Sage Products Inc., a manufacturer of disposable products (oral care, patient cleaning and hygiene, turning and positioning devices) targeted at reducing "never events," primarily in the ICU and MedSurg hospital unit setting, was bought for $2.7 billion in February. [See Deal] Soon after, Stryker added the $500 million+ revenue company Physio-Control Inc., which makes monitors, defibrillators, AEDs and CPR devices, for $1.28 billion, as a complement to its Emergency Medical Services offering. [See Deal]

In between, it had added Synergetics Inc.'s portfolio of neurology devices (for $32 million). [See Deal] And before the year's first four months had ended, the long-independent UK orthopedic oncology specialist Stanmore Implants Worldwide Ltd. also came into the Stryker fold for $51.9 million. [See Deal]SafeWire's minimally invasive spine procedures product portfolio, Becton Dickinson & Co.'s CareFusion vertebral compression fracture portfolio and Instratek (surgical implants) were also added. All sound buys, but qualified rather more accurately as "interesting" than "exciting." [See Deal][See Deal]

So what? Stryker continually stresses its need to invest in innovation to safeguard competitive positions and guarantee its ability to both develop new products and make improvements to existing products. Stanmore Implants' innovative orthopedic business, focused on adult and juvenile orthopedic oncology with patient-specific and off-the-shelf limb salvage implant systems, neatly fits that remit. Physio-Control has been acquired partly to drive a greater balance between capital and disposables as well to expand Stryker's global footprint.

But where MAKO was a truly transformative M&A play, some of Stryker's other recent buys have been more functional and complementary than out-and-out strategic. But who knows how much backroom work is being done that would give substance to the persistent murmurings about a tie-up with Smith & Nephew and its portfolio of wound care and endoscopy as well as orthopedics? The rationale for a takeover of the UK group in 2017 remains as clear as it has ever been – Brexit or no Brexit.

Back To The Day Job – Medtronic M&A In 2016

Predictions about the Abbott/St. Jude move making cardiovascular device rivals itchy – like Johnson & Johnson, Edwards Lifesciences Corp. and Boston Scientific – proved to be quite astute. In June, Medtronic paid $1.1 billion to acquire the less invasive, miniaturized circulatory support technologies of advanced HF company HeartWare International Inc. (Also see "Medtronic Set To Compete With Abbott/St Jude In VADs After Buying HeartWare " - Medtech Insight, 27 Jun, 2016.) [See Deal]

Its $43 billion purchase of Covidien, completed in January 2015, puts everything in the shade – even Abbott's move for St. Jude. But Medtronic, supplanting J&J as global leader in the medtech sales rankings in 2015, can never be excluded from any conversation on long-game, strategic M&A. In 2016, it bought Smith & Nephew PLC's gynecology business for $350 million – six times the unit's 2015 revenues. [See Deal][See Deal]

Medtronic also augmented its recently formed Renal Care Solutions business with the acquisition of hemodialysis firm Bellco Società Unipersonale ARL. The Italian company offers treatments for renal and multiple organ failure, and sepsis in the chronic, acute and neonatal segments, notably the Carpediem ultrafiltration device. [See Deal]

So what? The HeartWare deal will help Medtronic compete more effectively in the growing HF market, given Abbott's takeover of St. Jude. In fact, these will be the only two companies selling both CRM and VAD systems. But HeartWare's HVAD system has reportedly struggled commercially, and the clinical development of its miniaturized VAD has been problematic. However, the prize is reasonably substantial – Medtronic puts the worldwide VAD market at $800 million and growing at mid-to-high single-digit rates in 2016–17, accelerating more rapidly thereafter. Mechanical support will become another pillar for Medtronic in its overriding goal of achieving mid-single-digit revenue growth.

But go back to the Covidien deal to see Medtronic's sustained M&A rationale: the broadened spread of products that that deal brought will enable it to partner more closely with hospitals, control costs, make care more accessible and thereby retain its business. Medtronic wants to be seen as a problem-solver for hospitals and governments, and to be rewarded based on outcomes. It has also put itself in a better position to negotiate with the newly empowered hospital administrators, who are increasingly influential in brand selection. As an M&A move, Covidien was as defensive as it was daring. And Medtronic has been steadily adding businesses in 2016, continuing its 2015 momentum, when it made eight M&A deals.

Orthopedic M&A Dominates Volumes

Where cardiovascular deals dominated M&A in 2015, orthopedics proved to be the standout medtech segment for M&A in 2016, in terms of sheer deal numbers. (Also see "Value-Based Medtech Rides The Money-Go-Round Into 2016" - In Vivo, 25 Jan, 2016.) Active buyers in the segment included Smith & Nephew, MiMedx Group Inc., Merit Medical Systems Inc., Corin Group PLC, SeaSpine Holdings Corp. and Norgine BV. The notable, sub-$1 billion deals in this segment, were:

• NuVasive Inc.'s $380 million cash plus milestones acquisition of Ellipse Technologies Inc., a private musculoskeletal device firm, and purchase of Brazilian distributor Mega Surgical. [See Deal]
• Zimmer Biomet Holdings Inc.'s acquisition of Ortho Transmission LLC, a Colorado-based skeletal implant developer, for an undisclosed sum. [See Deal]
• Zimmer Biomet Holdings Inc.'s purchase of a majority stake in public French neurosurgery device company Medtech SA(robotic assistance devices), and the potential to acquire the rest of the company for up to $132 million. [See Deal]
• DePuy Orthopaedics Inc.'s purchase of closely held orthopedic device firm Biomedical Enterprises Inc.[See Deal]
• Medtronic's acquisition of US low-cost joint replacement system producers Responsive Orthopedics.
• Globus Medical Inc.'s purchase of Alphatec Holdings Inc.'s international operations and distribution channels, including wholly owned subsidiaries in Japan and Brazil, and sales operations in the UK and Italy. [See Deal]

Back To The Future – Medtech Talking Points For 2017

Market growth won't slow down. The global market is set to rise by 6.3% to $360.8 billion in 2017, according to the US Department of Commerce's 2016 ITA Medical Devices Top Markets Report. A further 7% rise is predicted in 2018 and by 2020, the market will be worth over $435 billion, almost half of which will be generated in the Americas ($208 billion), with western Europe around half as big ($106 billion) and the Asia/Pacific market being worth $88 billion.

M&A won't dry up. Johnson & Johnson got the class of 2017 underway very early in the new year, with DePuy-Synthes signing a purchase and development deal with Interventional Spine Inc. relating to expandable cages designed for minimally invasive spinal fusion surgeries. The conventional wisdom is that we'll see more spine M&A in 2017.

So as in the second half of 2016, so in 2017. It seems that no amount of political uncertainty (Brexit, Trump, etc.) will shock global industries into halting their M&A activity, which will likely even increase in pace in 2017 in the medtech space, as acquirers seek to strengthen asset bases as insurance against the uncertainties ahead.

But the consensus is around a 2017 shift in strategic focus toward smaller bolt-on deals in targeted therapeutic areas that will boost pipelines for future growth. In this way, defensive M&A could be seen as an economic antidote to the expected layers of regional political instability, given, for instance, national elections in the Netherlands (March), France (April) and Germany (fall – October 22 at the latest).

The M&A table and listings above reveal that the most common medtech M&A pairing is US-taking over-US. Indeed, EY reveals in its Pulse of the Industry 2016 report that US medtechs dominated the overall industry deal flow last year, accounting for more than 90% of the aggregate M&A value in 2015–16 (the 12 months to June).

But in 2017, will we see more takeovers of non-UK, EU-based medtechs, especially now that the UK is, implausibly, voluntarily severing its favored trading connections with the residual EU 27 bloc of some 450 million consumers? French companies Vexim SAS, SpineGuard SA and Medicrea International SA could be just such candidates, RBC Capital's health care equity research director told MTI reporter Catherine Longworth in a recent interview.

And does this make Smith & Nephew, for instance, less likely to be courted? Given its size and importance, that scenario is very unlikely, but expect investment flows into the UK to be more muted in the wake of the Brexit vote of June 23.

Chinese buyers in the medtech space are hungry. In 2015–16, they bought up 15 EU or US medtechs, and 26 in other global markets. The value of Chinese medtech M&A is likely to continue to grow in 2017, according to EY.

Who else is on the list for 2017? Traders point to higher-than-average trading volumes as a possible precursor to underlying activity such as an M&A event. That was happening at year-end 2016 at peripheral and coronary vascular disease device maker Cardiovascular Systems Inc., which had been rumored to be a takeover candidate at the same time as HeartWare, now part of the Medtronic group. MTI editor-in-chief Tina Tan has tracked Wright Medical Technology Inc., and considers it might be being readied for a suitor. Sports medicine's revival could see more valuations being put on candidates in that segment.

EY also claims that 43% of life science companies have more than five M&A deals in the pipeline. But the company also suggests that, due to rising payer and provider power and the linking of device prices to patient outcomes, life science companies will seek to achieve leading positions in fewer therapeutic areas in order to compete commercially. All things considered, M&A held its own in 2016, and the core growth challenges will continue to drive the industry’s M&A agenda.

Investment in innovation won't decelerate. Cleveland Clinic's annual snapshot of the 10 innovation game changers in the health care setting includes four device/diagnostic technologies for 2017, namely: bioabsorbable coronary stents, first approved in the US in mid-2016, and set to become a $2 billion market by 2022; 3D visualization surgery stereoscopic systems, allowing surgeons to operate more efficiently and effectively; self-administered, mail-able HPV tests; and liquid biopsy, a $10 billion market in the making, which features up-and-coming participants such as Angle PLC. (Also see "ANGLE Targets A Rich CTC Niche In Liquid Biopsy" - In Vivo, 14 Mar, 2016.)

Cyberattacks won't wane in pace and intensity. IT-based devices are ingrained in the medtech industry, but cybersecurity is not, and a very real concern in 2017 will be cyberattacks on IoT devices. A report by the TrapX Security group claims that over 6.4 billion IoT medical devices were online in 2016, and by 2020 that number is projected to increase to 20.8 billion. Most of them have no integrated cyber defense and do not allow third parties to install security software. The standard defense of installing a firewall is no longer a guarantee of total safety.

Global medtechs will have their work cut out for them in 2017. US President Trump's approach to Obamacare is yet to be defined precisely. It is unlikely he will dismantle it entirely, for all the pre-election rhetoric. How will this affect private health care companies and, down the line, their uptake of medtech innovations? The fate of the ACA in general, and the 2.3% excise tax on medtech sales (abolished ad infinitum or reinstated at the end of 2018) in particular are the big unknowns in the US.

In the EU, publication of the final Medical Device Regulation (MDR) and sister In Vitro Diagnostics Regulation (IVDR) are at last expected by mid-2017, and thereafter manufacturers will have three (medtech) or five (IVD) years to adjust to new rules, more regulatory scrutiny and huge compliance cost increases. Just how far can companies pass on the increases costs, is there enough scrutiny capacity, and has the EU set itself on an unfeasible course of becoming a less attractive launch market than the US?

Russia/the Eurasian Economic Union remains a tricky market for foreign companies, especially with Russia's sanctions response of barriers to non-domestic medtechs. But this sizable market won't be out of bounds forever. Energy prices are rising, and when Russia does return to the international fold, the medtechs that are not already monitoring their value propositions there and preparing the ground will be down on the second rung of the ladder.

But that's something that medtechs are increasingly adept at – planning for the future in an economic environment that rewards evidence-based solutions that provide sustainable value. After the shock of the global recession (2008–11), 2016 saw the medtech industry getting its confidence back – and those manufacturers at the front of the curve in 2017 will also be maximizing the connectivity benefits that the Fourth Industrial Revolution is bringing to health care.