Medical Devices and the Great Deflation (MassDevice)
The medical device industry's financial growth has been cut dramatically following the Great Recession, even as sales volume has returned to pre-crisis levels. Is there an end in sight?
The medical device industry has “lost” about $131 billion in revenues since the financial collapse of 2008, according to analysts at Ernst & Young.
The findings, taken from the audit firm’s annual “Pulse of the Industry” report, paint a glum picture for the medtech industry, once considered to be “recession proof.”
Annual revenues for medical device companies in the U.S. and Europe grew at an annual rate of 13% from 2000 to 2007, according to the report. But even as the economy has recovered and sales volumes returned to pre-recession levels, sales growth across the medical device sector has increased just 7% since 2008. E&Y analysts estimated that the gap in growth totals about $131 billion in lost sales.
“The hard part is that a lot of that [drop-off] has come strictly off the top, from a pricing perspective, with companies dropping pricing,” Kevin Casey, a partner at E&Y in Boston, told MassDevice.com.
Current conditions represent a...
