Money Matters

BUSINESS NEWS

In 2007, medical device companies were involved in 385 venture capital deals with an investment total of $3.9 billion, reports the PricewaterhouseCoopers-National Venture Capital Association MoneyTree Report. Notably, 114 device companies received first-time financing, representing a slight decrease compared with the 118 medtech companies receiving first-time financing in 2006. However, the aggregate amount invested in first-time medtech financings in 2007 was $838 million, a 43% increase over the $587 million invested in first-time medtech financings in 2006.

A recent study released by industry association AdvaMed (Washington, DC) reports that the highly competitive nature of the medical device industry has limited the rate at which medical device prices are increasing. Between 1989 and 2004, spending on medical devices and in vitro diagnostics remained relatively constant as a proportion of total national health expenditures. Meanwhile, medical device price increases have been modest at an average annual rate of 1.2%. During the same period, the medical consumer price index grew at an annual rate of 5%, and the overall consumer price index grew at a rate of 2.8%.