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5 Factors That Could Cost Medtech $34B by 20205 Factors That Could Cost Medtech $34B by 2020
October 20, 2014
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1. Payers and Providers Gain StrengthIn the past, physicians wielded an enormous amount of power on the medical device industry. Medtech companies had no choice but to cater to them, hoping their new products would win their favor.Now, however, the providers and payers are gaining power, and are shopping for devices that are efficient from a cost perspective. Buyers want to see data showing that medical devices are not only safe and effective but also provide a good value. “Evidence-based care is edging out physician preference as a key buying factor,” the report notes.
5 Factors That Could Cost Medtech $34B by 2020
The big uptick in medtech megamergers is just the beginning of a profound set of changes facing the medical device industry, according to a new report from ATKearney. The industry’s profit margins are set to fall drastically, falling nine points from 25% in 2012 to 16% by 2020, the report predicts.
While the disruption facing the industry may be unavoidable, the report’s authors note that if the industry plays its cards right, it can offset the forecasted revenue declines. The industry should adapt to find new revenue streams while cutting unnecessary costs.
The report also argues that it is vitally important for the industry to confront these five trends:
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