Age Demographics

• The dominance of demographically oriented technologies is listed as one of the trends in the medical device industry by the Food and Drug Administration (FDA) and Mercer Capital.
• The aging population in the United States is driven by increasing life expectancy and declining fertility rates, representing one of the major demand drivers for medical devices.
• In 2016, the elderly population (persons aged 65+) in the U.S. was 49 million in 2016 (15% of the population) and estimated to double to 95 million (23% of the total population) by 2060.
• The elderly account for about one-third of total healthcare consumption in the country with a personal healthcare spending of $19,000 per person in 2014, which was five times the spending per child ($3,700) and about three times the spending per working-class individual ($7,200).
• The increase in the demand for medical devices for this age group will result in increased investment and output in medical device technologies.
• Examples of companies involved in this trend are Apple and Google.

Third-Party Coverage and Reimbursement

• The presence of third-party coverage and reimbursement organizations is seen as one of the trends in the medical device industry by Mercer Capital.
• The source opined that third-party coverage takes away the possibility of medical device manufacturers to liaise the price of the products with the final consumers (patients). Instead, they are forced to do business with physicians and the product approval committees at hospitals.
• Since device manufacturers receive payments from insurers, which in turn, reimburse healthcare providers for routine procedures rather than for specific components like the devices used. This tends to disconnect the decisions regarding the price of medical devices from its actual use.
• Ultimately, "lower reimbursement rates and reduced procedure volume will likely limit pricing gains for medical devices and equipment."
• An example of this scenario was CMS, which partially canceled bundled payment programs for a particular joint replacement and cardiac rehabilitation procedures in November 2017.

Competitive Factors and Regulatory Regime

• Competitive factors and regulatory regime is listed as one of the major trends in the medical device industry by Mercer Capital and Medical Design & Outsourcing.
• According to Mercer Capital, growth in medical technology has led to the continual production of innovative devices that help doctors improve health outcomes. The successful development of these products requires significant R&D planning and can lead to elevated market prices, followed by market penetration.
•  Government regulations tend to limit competition in two ways to help such firms recover their R&D investments. The methods employed by the government include the provision of patents and intellectual property protection to inventing organization, thereby, giving them a competitive advantage for a finite period and the regulations governing "medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotions, sales and distribution, export and import, and post-market surveillance."
• Medical device approval takes about (90-365) days for completion and results in delays in bringing in the products into the market.
• Also, the Medical Devices User Fee Act (MDUFA IV) authorizes the FDA to collect almost $1 billion in user fees (over $320 million increase from MDUFA III).