From the September 2021 issue of HealthCare Business News magazine
By David Magnani
In 2017, the U.S. medical device market was a $156 billion industry, accounting for approximately 40% of the total global market. As staggering as those numbers are, they’re growing. By 2023, it’s expected to top $208 billion.
Despite the booming potential of the medical device market, the path forward won’t be an easy one. While there’s absolute demand for a broad array of medical devices, challenges persist in getting them into the hands of the people and practitioners who need them. As we become further removed from a global pandemic, lingering headwinds could blow strong against this sector, bringing turbulence to growth prospects.
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Here’s a look at the top three challenges facing the medical device market in 2021 and how the industry can overcome them as demand persists.
1. Continued supply chain disruptions
COVID-19 was absolutely devastating for supply chains — particularly global supply chains. In 2021, there’s continued push-pull from suppliers and producers that’s leading to everything from manufacturing delays, to back orders, quality control issues, rising costs and more.
Consider the composites industry, which is deeply entwined with medical device manufacturing. Thermoform producers, injection molding companies and similar producers aren’t able to get the raw composites they need — and when they do, they often come at significant price hikes. A recent Composites World/Gartner survey of 144 composites fabricators found that 69% dealt with some form of supply chain shortage, while 66% faced issues with lead times. The report also found price inflation among epoxy, polyester and vinyl ester resins — all materials common in medical device manufacturing.
These factors all add up to problems for medical device manufacturers. More importantly, they add up to a growing gap between patient demand and medical device supply.
2. The cost of innovation is rising
Continued supply chain woes aren’t the only factor driving up costs in the medical device market. The cost of healthcare itself is also on the rise. Moreover, emerging medical devices tend to fall into a sort of “no man’s land” when it comes to insurance coverage. While most plans and policies will cover the cost of durable medical supplies, modern devices aren’t always covered. For patients who need to pay some or all of the cost out of pocket, that cost can be prohibitive.
So why don’t companies lower the cost of medical devices? In a thought: they can’t. More than 80% of medical device companies in the U.S. are small businesses or startups, employing fewer than 50 people. These companies have little to no sales revenue and aren’t profitable. And while their novel device is likely to solve a problem or improve a patient’s quality of life, it’s often unrealized because companies can’t afford to reduce the price. Those companies that do manage to bring a product to market generally do so on the back of decisive medical device leadership.