The Medical Device Market: Up, Up, and AwayThe Medical Device Market: Up, Up, and Away

Originally Published MDDI August 2004

Industry



With successful devices like balloon catheters, the medical device market rose like a hot air balloon over the last 25 years.

Sherrie Conroy, Senior Editor

By 1979, the newly regulated medical device industry was just 3 years old. Over the next 25 years, the industry managed to weather economic storms and to grow steadily. Overcoming regulatory hurdles, it produced many breakthrough devices and remained strong and viable.

Some industry sectors fared better than others or grew at a faster rate, but overall, the industry has seen nothing but upward trends. The information presented here is based primarily on data from various editions of the U.S. Industrial Outlook published by the Dept. of Commerce. The selected quotes provide a snapshot of the forces at work and the state of the industry at a given moment in time. They also provide some context for the market trends shown in the line graph. The graph traces the value of shipments for the medical device industry from 1979 to 2004, the 25 years covered by MD&DI. 

The 1970s and Early 1980s

National concern over rapidly rising costs for healthcare resulted in the late 1970s in voluntary hospital cost-containment efforts, regional planning for health facilities and services, and certificate-of-need justification for many capital expenditures. The Reagan administration has undertaken a general review of government regulations, including many that affect medical equipment producers. The object is to do away with unnecessary regulatory burdens where possible. This policy improves the climate for manufacturers of healthcare products.
—U.S. Industrial Outlook 1982

The 1980s

Continued technological innovation should provide the primary stimulus to growth during this period, as well as increased demand for healthcare services and equipment as a result of the aging of the population. The new hospital cost-containment regulations are certain to have a restraining effect on industry growth.
—U.S. Industrial Outlook 1985

The industry's growth pattern, strongly influenced by medical and healthcare regulations, has shown sharp increases in shipments every 5 years since passage of the Medical Device Amendments in 1976. In the industry's boom years of 1977 and 1982, shipments rose 86% and 26%, respectively. 
—U.S. Industrial Outlook 1987

The 1990s

Despite the slow growth in the domestic economy and buyers' resistance in a cost-conscious healthcare environment, the value of shipments by the U.S. medical equipment and supplies industry rose more than 8% in 1993. This increase was partly due to the strong overseas demand for U.S. medical equipment.
—U.S. Industrial Outlook 1994

The 21st Century

The U.S. medical device industry is undergoing radical change in direct response to the factors that affect it. The trends that will affect the device industry the most in the next 5 years are cost containment, consolidation, demographics, the regulatory environment, and global financial instability. …The elderly will influence the direction of the industry through their particular health needs. The next 5 years look very positive for the industry as it takes advantage of a more liberal regulatory environment, an aging population, shifts to home healthcare and alternative sites, and more efficient manufacturing and distribution.
—U.S. Industry & Trade Outlook 2000

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