Industry Insight: Medical Device Manufacturing

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Welcome to the first installment of FuzeHub’s “Industry Insight” series. In these periodic blog posts, we take a look at selected manufacturing industries of strategic importance in New York State, starting with medical device manufacturing. Read on to learn about the industry’s outlook, products and markets, and supply chains, and how the industry’s performance may provide opportunities for your business.

These are manufacturers who produce electromedical devices like MRI equipment, pacemakers, hearing aids, endoscopic equipment, irradiation apparatuses, and related products. The $42.6 billion U.S. industry is expected to grow at a rate of about 3% annually over the next five years, driven by factors including healthcare reform, an aging population, and new technologies like 3D printing that will enable the development of new products. As demand for medical devices increases due to demographic factors, expect demand to also increase for electrical equipment and components, one of the most important inputs for medical device manufacturers.

On the other side of the supply chain, medical device manufacturers’ customers are primarily hospitals, doctors, and medical supplies wholesalers. Twenty-six percent of the industry’s revenue comes from exports, mostly to China and Japan. At the same time, the U.S. imports more medical devices than it exports, primarily from Germany and Mexico.

New York State is home to about 5% of U.S. medical device manufacturing establishments, the fifth highest concentration of all states. This clustering happens in states known for other high-tech industries, and near research institutions that support the development of the biotechnology and microelectronics industries. In the case of New York, these would include the University at Buffalo’s Center for Advanced Technology in Biomedical and Bioengineering, the Icahn School of Medicine at Mount Sinai, Stony Brook University’s Center for Advanced Technology in Medical Biotechnology, and the University at Buffalo’s Center of Excellence in Bioinformatics and Life Sciences.

Medical device manufacturers are heavily regulated by the FDA, imposing costs that constrain investments in innovation. One trend market researchers anticipate is that manufacturers will incorporate new technologies by acquiring smaller innovative companies, increasingly foregoing in-house research and development. Likewise they expect an increasing trend of new, small companies entering the market with niche devices developed through advances in biotechnology and manufacturing innovations.

This post includes market research from IBISWorld Industry Report 33451b, “Medical Device Manufacturing in the US,” April 2017.


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