10 medical device trends for 2017

Kalorama Information, a market research firm based in Rockville, Md., released a report detailing 10 trends that will likely affect the medical device industry in 2017.

The trends are based on the company's Global Market for Medical Devices report, which details the current market, projections and profiles of major companies.

Here are the 10 trends.

Trump Administration and MDUFA Fees: Under existing Medical Device User Fee Agreements laid out by the FDA, devicemakers must pay more than $200,000 to launch a new device. According to Kalorama, the Trump administration's stance on MDUFA agreement fee negotiations could set a precedent for the government's relationship with the medical device community.

Trump Administration and ACA/FDA: The report states the medical device community will be pushing for improvements to the FDA regulatory process and a permanent repeal of the medical device tax. Industry lobby group AdvaMed will also seek ACA repeal, although it indicated it would like to see newly insured individuals to maintain coverage.

Revenue growth slow, but steady: According toKalorama's estimates, the $390+ billion medical device market will experience growth this year, although not as rapidly as the firm would have estimated five years ago. The company projects a 2.8 percent average growth rate for the next five years.

No slowdown in mergers and acquisition: The industry saw 153 significant device market mergers and acquisitions from 2015 to early 2016. Kalorama expects mergers and acquisitions to remain popular in 2017.

Hospital consolidation unfolding:  In the last five years, up to 100 hospital consolidation transactions occurred, which results in fewer buyers for medical device products. The Federal Trade Commission is also taking a more aggressive stance to consolidation, which might slowdown the trend, according to the report.

Slow in pricing growth: Unlike other areas of medicine, the price of medical devices has grown slower than inflation as a whole. Group purchasing organizations, value analysis committees, reimbursement reductions to hospital buyers of devices, competitive bidding schemes and other similar programs have led to this slow pricing growth. 

Optimistic devicemakers seek innovation: Kalorama estimates devicemakers spend about 7 percent of their revenue on research and development — a higher figure than most industries. The firm expects to see a continued emphasis on the development of innovative devices.

United States still a focus, Asia rising: A majority of medical device revenue will be earned in the U.S. in 2017, according to the report. China and Southeast Asia will also see much larger growth than the overall device market this year.

Cybersecurity: As devices rely more on the cloud or online reporting, the ability of hackers or criminals to break into security systems will continue to be an increasing concern in 2017.

Wearable features grow revenues:  The global wearable medical device market peaked at just over $13.2 billion for 2016. Kalorama expects the wearables market to undergo average revenue growth double that of the overall device market in 2017.

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