A survey conducted by Emergo Group indicates that sales growth in 2014 was lower than in 2013. A number of factors may have contributed to this negative change.
Firstly, the European economy has been in a slump for several years now. This has affected companies which export to Europe as well as German medical device companies which specialize in the export. However, economists are optimistic that 2015-2016 will bring positive changes to the European economy. In fact, business activity picked up in February 2015 in the 19 countries that use the Euro. This is good news for the medical device industry.
Another factor is the downturn in Brazil’s economy. Brazil has the largest and most established medical device markets in Latin America and a low per capita expenditure, allowing room for expansion. But its economic recession has limited export opportunities and affected medical device companies around the globe.
A strong US economy has helped offset some of the issues with European exports, but the strengthening of the dollar has made American devices more expensive for overseas buyers. Since the United States accounts for 38% of the total medical device industry worldwide, this is a significant factor.
Large companies reported that they are most challenged by regulatory changes and pricing pressures. Regulations in China, Russia, Japan and Brazil have tightened, leading to greater difficulties in exporting medical devices.
Although experts predicted that the US excise tax would affect the industry significantly, most companies did not make any changes based on it. Larger companies were more likely to downsize than smaller ones, but overall the effect has not been great.
Despite the issues, medical device companies are optimistic about their prospects for 2015-2016 . 75% of those surveyed expect positive change in the coming year. Companies in North and South America and in Asia are the most optimistic. European companies are still facing challenges posed by their economic downturn and are less optimistic.
At Triode, we specialize in developing new products and services for complex industries like medical devices and transportation. We work with you closely to help define product strategy, with an emphasis on reducing the risks associated with innovating in these sophisticated and often regulated consumer-oriented environments.