The largest medical device market in the world today is located in the United States. It has already exceeded $100 billion in total size and expected to exceed $130 billion by the end of 2016. From a global standpoint, this reflects about 40% of the total medical device market that currently exists. If US exports of medical devices are included, an additional $40 billion per year gets added to the US total and exports are increased at an annual rate of 7%.
What is unique about the medical device market size in the United States is that no one large company dominates the industry. There are over 6,500 medical device companies that are currently in operation right now and most of them are either small- or medium-sized businesses. Over 80% of these businesses employ fewer than 50 employees.
Why Does the US Dominate the Medical Device Market?
The medical device market size is dominated by the US because many of its 6,500 companies are highly regarded globally for their innovation and emphasis on hi-tech solutions. Since the mid-1990s, the medical device market in the US has seen a doubling of the revenues dedicated to research and development, bringing this industry to a domestic sector investment figure that is more than 2x that of the average business sector.
It also helps that the US market has a dominant footing in a number of different manufacturing sectors that support the medical device industry. From telecommunications to biotechnology to software development, local collaborations have led to many recent advances that have dramatically increased treatment options and improved the diagnostic process.
This means the future growth of the medical device market is stable and strong. Positive results are expected throughout the next decade.
What Is Driving the Medical Device Market?
There are 5 subsectors that are seeing tremendous growth globally in the medical device market. These subsectors are going to continue to be the focus through the next decade of manufacturers because they offer the industry the greatest potential for profit.
1. Electronic equipment.
This includes pacemakers, patient monitoring devices, diagnostic imaging, and the full suite of powered products that are available to medical providers and consumers today.
This niche of the industry is being fueled by the innovations in gamma knife technology and other advanced cancer treatments. X-ray devices are also part of this specific sector.
3. Surgical equipment.
This segment of the medical device market is consistently strong because the components used in it are consumable. They include rubber gloves, surgical drapes, medical kits, and bandages.
4. Medical appliances.
This sector includes devices that assist patients with daily living activities, such as artificial joints, stents, and other orthopedic needs.
5. Dental equipment.
Everything the dentist uses is grouped into this one category. This would include plaster, cements, hygienist supplies, and even the patient chair.
The medical device market is constantly fueled by a desire of the general public to have more effective treatment solutions. There is a need to diagnose medical issues more quickly and create effective treatment plans that are able to provide results in a short amount of time. As long as this demand continues to exist, there will always be a need for innovation. That means there will always be a potential for growth in the medical device market size of the US.
Isn’t the Health Care Sector Expected to Slow Down?
Health spending is expected to decrease in the United States over the next 5 years. Medical device excise taxes from the Affordable Care Act are creating uncertainty within the market. Despite these two concerning factors, growth is still expected because of an expectation of export growth as emerging markets gain in global influence and wealth over the coming years.
Increasing access to medical devices through better health insurance coverage may also promote growth within the industry. Many people do not seek treatment for their medical needs because of the cost of those treatments. If mandatory health insurance in the US makes those treatments more affordable, then more patients will be tempted to invest into a medical device that could make their lives a lot easier.
Increased patient appointments. More effective treatment options. Emerging markets that are seeking modern care solutions. These factors all point toward a bright future for the medical device market size, especially within the United States. As long as innovation can keep up with demand, there will be growth within this industry for the foreseeable future.