Strong Dollar Puts Brakes on Medtech Exports

Currency fluctuations have had negative effects on the business of U.S.-based medical firms as well as European companies, according to an Emergo survey. 

Brian Buntz

Starting about one year ago, the U.S. dollar began to strengthen in value compared to the euro and other currencies. For American companies exporting to Europe, this was not a good trend. By early 2015, American medical devices were 25% more expensive to European buyers than they were six months earlier. Conversely, European exporters suddenly found their devices to be more price competitive with U.S. made products.

At first glance, the situation might seem to be good news for European medtech companies, and bad news for U.S. device makers But a recent survey from Emergo finds that both U.S. and European medtech firms claim to have been negativity affected by currency fluctuations. 

In all, 59% of international medical device firms claim they have lost business as a result of currency changes. Only 6% of respondents say they had seen "very positive " changes in their profitability, while 17% claimed to experience "somewhat positive" changes in their business. 

Check out medical device companies with worst-performing stock values this year, and many count currency fluctuations among their problems. Such companies include 3M Co., Johnson & Johnson, Zimmer Biomet, and Varian Medical Systems.

Understandably, more executives in the United States claimed to have witnessed negative changes in their business as a result of currency changes. A total of 43% say they were "somewhat negativily" affected while 17% report being "very negatively" affected. 

The Emergo report did not really explain why the situation is also tough for European companies. Here's an educated guess: China's devaluation of its currency amid its economic troubles could be negatively affecting both U.S. and European medical device makers. 

Roughly half of the executives, based throughout the world, reported making changes to their medical devices' prices in the past year. About 68% of them stated they hadn't planned further strategic adjustments (corporate speak for restructuring, selling off businesses, layoffs, etc.) to keep up with the currency changes.

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Brian Buntz is the editor-in-chief of MPMN and Qmed. Follow him on Twitter at @brian_buntz.