California Home to Almost One-Fifth of U.S. Device Industry

Medical Device & Diagnostic Industry Magazine
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An MD&DI October 1997 Column

BOTTOM LINE

The Golden State has nearly 2000 medical device manufacturers and contract manufacturers, making the Pacific the largest region for device makers in the United States.

With almost one out of every five medical device manufacturers, California tops every other state in the union. This year the Golden State boasts nearly 20% of the total number of U.S. device manufacturers with just under 2000 companies, according to figures compiled by the FDA Center for Devices and Radiological Health's Division of Small Manufacturers Assistance (DSMA).

Figure 1. A breakdown of U.S. medical device manufacturers (including contract manufacturers) showing their geographic distribution among the top six states and the remaining states.

DSMA's deputy director, Lynne Rice, has noticed little rotation among the states. "Over the years, five states—California, New York, Illinois, Massachusetts, and Texas—have consistently led the list," she explains. "Unfortunately, because DSMA doesn't factor into the statistics the types of devices the firms manufacture, we can't pinpoint whether there is a relation between products and location."

The main reasons DSMA compiles these numbers, says Rice, are for planning workshops and watching for any shifts in the industry. "We want to know where the regulated industry is so we know where to put our resources," Rice explains.

Overall, the total number of registered medical device establishments, a group that includes initial distributors of imported devices, domestic distributors, manufacturers and contract manufacturers, specification developers, rebuilders and refurbishers, contract sterilizers, and repackagers and relabelers, has also grown (Table I). Every establishment category save for one—repackagers and relabelers—has expanded. Since 1994, the number of repackagers and relabelers has been declining. But 1997's drop of 313 was the most significant, as compared to 1995's decline of 143 and 1996's decline of 132.

Table I. A breakdown of the number of FDA-registered establishments by type in August 1994, August 1995, July 1996, and July 1997.

The number of U.S. registered medical device manufacturers, including contract manufacturers, increased only slightly (2%), from 10,230 in 1996 to 10,420 this year. Such small growth doesn't necessarily mean the industry is stagnating, however. "It is just the natural growth of the industry," says Rice. "It represents the number of firms both entering and leaving the industry. When there is even a slight growth, it means we have more firms entering than leaving."

A few states did record notable growth, such as California, Texas, and Florida, which acquired 24, 24, and 20 new firms, respectively. (See Table II for the number of manufacturers registered in each state.)

Table II. State-by-state breakdown of the number of FDA-registered manufacturers and establishments as of July 30, 1997.

Home to such large FDA districts as Los Angeles and San Francisco, the Pacific region continues to contain the most manufacturers, nearly 25% of the entire industry. The Northeast region follows with just under 18% (Figure 2).

Figure 2. The number (and percent of U.S. total) of device manufacturers and contract manufacturers registered with FDA as of July 30, 1997, by region.

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