5 major developments in the U.S. medical device industry

The medical device industry's global annual sales are projected to grow more than 5 percent annually and reach almost $800 billion by 2030, NASDAQ reports.

With more than $180 billion in revenues, the U.S. medical device market is the largest in the world.

Here are five key developments in the U.S. medical device market:

1. MedTech tax is abolished. The 2.3 percent excise tax on MedTech manufacturers was suspended for two years. It will go back into effect beginning Jan. 1, 2020. The repeal has spurred investments in the sector and is expected to boost hiring and investment at 9,000 U.S. medical device manufacturers.

2. Mergers and acquisitions surge. There has been ongoing merger and acquisition activity in the industry. The MedTech arena saw a 50 percent spike in M&A activity in 2017, putting the aggregate M&A value at more than $200 billion. Major recent acquisitions include Becton, Dickinson and Company's acquisition of C. R. Bard and Johnson & Johnson's buyout of Actelion.

3. Pharmacy benefit managers and health insurers consolidate. Health insurers have been collaborating with PBMs in the MedTech space to streamline drug supply chain costs. Through strategic M&A policies, dominant medical device players have expanded customer bases, gained leverage and improved cash flow while alleviating pricing pressure and competition.

4. MedTech undergoes digital revolution. Robotic surgery, big-data analytics, bio printing, 3-D printing, EHRs, predictive analytics, real-time alerting and revenue cycle management services are trending in the medtech industry. According to some reports, AI adopters have reduced healthcare costs by 50 percent and improved patient outcomes by at least the same amount. Meanwhile, the industry has seen a rise in minimally invasive surgeries, increased demand for liquid biopsy tests and IT leveraged to improve patient care.

5. Trade war fears take hold. President Donald Trump has targeted 10 sectors for higher tariffs. The trade dispute will likely have a significant impact on healthcare and medical equipment, as U.S. medtech firms currently export $4.7 billion to China each year and medical device imports from China amount to $5 billion. U.S. medical device exports totaled $52 billion last year.

More articles on supply chain:
AMA report: drug shortages a public health problem — 3 things to know
Allergan snags former Abbott exec for board — 4 insights
Researchers: Up to 1K patients harmed by cybersecurity attacks on medical devices

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