Medical device products and technologies are used in the diagnosis, prevention and treatment of diseases. The global medical device market is currently valued at $228 billion, up from $164 billion in 2010 and projected to reach $440 billion by 2018, up to $477.5 billion by 2020, growing at an approximate 4.1% to 4.4% compound annual growth rate per year and over the next five years. This growth is expected to outpace the prescription drug market by 2018, which is in comparison growing at a rate of 2.5%. Diagnostics are predicted to be the industry’s top segment, achieving global sales of $54.5 billion. Neurology devices are expected to grow the fastest, expanding by 6.1% annually, while orthopedics is expected to grow at slowest rate of 3.1% compound annual growth rate per year and over the next five years.
The largest medical device market is the United States, valued at $125.4 billion. The U.S. market value represented approximately 38% of the global medical device market in 2012. The European medical devices market is the second largest, valued at US$66 billion. The leading EU markets are Germany, France, Italy, the United Kingdom and Spain. China has recently become the third largest medical device market, growing at an average of 20% annually since 2009 and valued at over $48 billion. In case of global market share of medical devices, electro-diagnostic devices accounts for 12.7% of the global market share. Orthopedics and fracture devices account for 7.9% of market share, while dental fittings account for the smallest share of 1.4%.
The medical device R&D expenditure forecast to grow by 3.5% per annum to reach $29.5 billion in 2020, where Medtronic ranks number one with R&D with expenditure forecast to reach $2.5bn. The new registrations for PMAs and HDEs increased 43% in 2014, while 510(k) clearances are up 5%. FDA approves new PMAs (cardiology medical device sector being at number one position) in 2015 with a 50% increase compared to 2014.
Top 10 Medical Device Companies
Johnson & Johnson is currently the leading medical device company in the world with revenue of US$27.5 billion, but Medtronic would be the industry leader in 2020 with revenues of $34.9 billion due to the companies’ divergent strategies. Johnson & Johnson has been divesting its medical device business units, whereas Medtronic is one of the most acquisitive companies in the entire sector including the recent acquisition of Covidien for $42.9 billion and further announcement of 11 acquisitions with a total value of around $1.6 billion. Mergers and acquisitions activity has been the highlight of 2015. Becton Dickinson and Zimmer Biomet would move up the rankings in 2020 following its acquisition of CareFusion, and the merger of the Zimmer and Biomet, respectively.
Johnson & Johnson retains leading position in the orthopedics market in 2020 with sales forecast to reach $10.5 billion; followed by Zimmer Biomet. In vitro diagnostics remains number one device area in 2020 with sales of $67.3 billion and a 14.1% share of the medical device industry. It is also the second fastest-growing area with a 5.1% CAGR between 2014 and 2020. Roche continues to lead the In vitro diagnostics sector with 2020 sales forecast to reach $11.9 billion. Neurology is the fastest-growing medical device area with expected sales reaching $9.5 billion in 2020at an annual rate of 6.9% between 2014 and 2020.