Delivered June 30, 2020. Contributor: Toyoabasi E.
To identify 10 of the fastest-growing trends in the medical device industry over the last 5-10 years and five of the trends most likely to continue over the next 5-10 years, including the amount of capital that has been allocated to each trend.
Some of the fastest growing trends in the medical device industry in 2016 include aging demographics, third-party coverage and reimbursement, and competitive factors and regulatory regime.
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.
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.