medtronic
MEDICAL DEVICES

sector Overview:

The medical device and diagnostics industry is evolving rapidly. Demographic and societal changes have converged on the sector – chronic disease has become more prevalent, the population in the developed world is ageing, and, thanks to the internet, patients are increasingly better informed. There has been steady growth across the whole market and this is expected to continue to rise throughout the century. Accelerating globalisation and strong growth in the core emerging markets of China and India are both important factors. In the current primary markets of the US, Europe and Japan the main challenges are in the areas of healthcare economics, reimbursement strategies and new product introduction. The first two concerns are the focus of continued negotiation between the big players such as Stryker, J&J, Becton Dickenson and Zimmer, regulatory bodies and government policy makers.

The heart of these negotiations has been to agree rapid change that will help to contain expanding healthcare costs. As cost-containment spreads to the US from Europe there has also been a push to create ‘world pricing’ which will have a significant impact on the higher margins currently being achieved in the US, where the majority of profits in this sector are correspondingly made. Both market growth and demands for cost-control alliances and strategic relationships are playing an ever more important role here. However, it is in the last of the three identified areas, new product introduction, where companies themselves are gaining greatest differentiation and value creation. Most companies envisage future growth of around 5% annually will be delivered primarily through organic development of new products although there has also been increasing M&A activity in recent years.

ONES WE ARE WATCHING

 

Smith and Nephew
Smith and Nephew has been growing a niche around such areas as advanced wound management and endoscopy as well as orthopaedic reconstruction and trauma products. Having embarked on a mission to grow ahead of the market through investing in R&D and innovation, the company is now focused on building and exploiting three enabling technology platforms of novel bioresorbable polymers, tissue engineering and non-invasive stimulation across the group’s business units. With sales of $2.8bn and strong poistions in all markets, the focus is now on increasing margins through new product development.

Johnson & Johnson
Johnson & Johnson is the world's most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. Always at the forefront of new developments in the sector, it has been investing heavily in creating an environment in which innovation can flourish. Recent new products include the Band-Aid liquid bandage, which creates a clear, flexible, breathable seal, and the OneTouch Ultra Blood Glucose Monitoring System, which is the first product to combine a less painful alternative to traditional fingerstick testing with the fastest test time.

  

 

 

 

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