Medical device manufacturers are struggling to keep up with demand as inflation-driven costs for raw materials shrink their profits, The Wall Street Journal reported Nov. 13.
The issue is widespread, according to the Journal, with specialized plastics, metals and resins all in short supply. Stryker, a company that makes surgical equipment and joint-replacement parts, has slowed its production and hiked its prices as it searches for less expensive electronic components. Some semiconductors are hard to come by, meaning Abbott Laboratories can't meet demand for its first-generation Libre 1 blood-sugar monitoring devices in some markets.
With medical devicemakers clawing for the same limited amount of materials, Intuitive Surgical CEO Gary Guthart likened the supply issue to "an old Western movie bar fight" at a recent conference, according to the Journal. "It starts in the morning and goes all day."
Analysts told the Journal that the medical device industry is partly at fault because these companies have historically prioritized high profits over supply chain improvements. But with recent supply chain hiccups, such as the monthslong contrast dye shortage, industry leaders are seeking new alternatives.
"We're all going through a major modernization in our supply chains," Ashley McEvoy, executive vice president of Johnson & Johnson's medtech unit, said at the industry conference. "We have not been pace setters relative to other industries. We're going to have to get masterful at logistics."