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E&Y Report: Medtech holds steady, but price concerns outpace design for customers

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One underlying trend in the medtech industry is a shift toward commoditization if it doesn’t start mixing up the product offerings, led Ernst & Young’s latest pulse of the industry analysis, which it released today at the Advamed conference in Chicago.

“As purchasing decisions become increasingly centralized and influence shifts from physicians to hospital administrators and managers, the historical value drivers for purchasing a device — brand, quality and design — will lessen, leaving price as a main consideration,” E&Y’s Global Life Sciences Leader Glen Giovannetti said in a statement.

He added that to stand out, companies will have to design and market their products such that they lower costs while demonstrably improving patient outcomes. Much of the innovation will be driven by small and mid-sized companies, as well as startups, the report notes.

Beyond that, here are some of the key trends that occupied the bulk of the report:

– Revenue’s up. Combined U.S. and European medtech revenues from public companies were $336.2 billion last year, a 4 percent increase over 2012. While respectable, it’s still much lower than pre-recession growth rates, E&Y said. The growth’s been primarily in the cardiovascular sector.

– This one’s a gimme: IPOs soar. For the 12-month period ended June 2014, 31 medtech companies went public, raising $1.5 billion – a whopping 600 percent increase over the like period the year previous.

READ THE REST HERE (WITH GRAPHS)

 

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Josh Sandberg

Josh Sandberg is the President of Ortho Sales Partners and Partner for The De Angelis Group. He also serves as Co-Founder and Editor of OrthoSpineNews.

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