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Despite the indispensable nature of medical devices, the recession and slower growth in total health expenditure and capital investments took a toll on a number of operators, forcing a wave of large medical device manufacturers to close underperforming plants. For these reasons, industry research firm IBISWorld has added a report on the Medical Device Manufacturing industry to its growing industry report collection.
Los Angeles, CA (PRWEB) February 23, 2013
The past five years have been rocky for the Medical Device Manufacturing industry. Despite the indispensable nature of medical devices, the recession and slower growth in total health expenditure and capital investments took a toll on a number of operators. As a result, a wave of large medical device manufacturers closed underperforming plants. “The exodus has been largely attributed to the lack of incentives to grow and develop in this market, as well as regulatory pressure,” says IBISWorld industry analyst Anna Son. “Indeed, some international companies have avoided entering the Canadian medical devices market due to this difficult operating environment.” The Medical Device Manufacturing industry is primarily composed of small- and medium-size enterprises. Small operators typically specialize in developing technology and products for a niche area. Larger players frequently seek to acquire these firms to expand their product offerings or gain access to a particular technology. Two of the industry’s larger players include Medtronic Inc. and Stryker Corporation.
During the five years to 2013, IBISWorld estimates revenue will contract at an average annual rate of 3.6% to $3.8 billion. As the economic and regulatory climate improves, however, revenue is expected to grow 2.6% in 2013, signaling a turnaround for the Medical Device Manufacturing industry.
“Driven by cost containment and reduction across the healthcare sector, healthcare providers have been seeking competitive pricing to cut costs and manage budgets,” says Son. “Therefore, many health agencies have joined group purchasing organizations, which have power to negotiate prices with medical device manufacturers and other providers of goods and services.” Over the past five years, these pricing pressures and downstream consolidation have spurred mergers and acquisitions within the industry. Meanwhile, shorter product life cycles and the high cost of developing new technology have provided further impetus for industry operators to consolidate.
Given its financial stability and abundant resources, Canada has potential to grow into a hub for medical device innovation. Canada is home to some of the world's most recognized and cutting-edge scientific research institutions, as well as a large number of experienced, highly trained researchers. In addition to its considerable strength in the information technology sector, Canada also holds a strong track record for conducting clinical trials, which stimulate innovations in the healthcare and medical devices sector. Still, despite these advantages, the industry will have to overcome a number of hurdles, such as a shortage of public and private investment, lack of sufficient incentives to attract and retain industry participants, and stringent regulations that constrain industry growth. For more information, visit IBISWorld’s Medical Device Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry includes manufacturers of electromedical and electrotherapeutic apparatus, such as magnetic resonance imaging equipment, medical ultrasound equipment, pacemakers, hearing aids, electrocardiographs and electromedical endoscopic equipment. The industry also manufactures irradiation apparatus and tubes for applications such as medical diagnostic, medical therapeutic, industrial, research and scientific evaluation.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.ca or call 1-800-330-3772.
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