The 2013 Medical Device Industry Survey was conducted in January 2013, with a total of 3,509 respondents. Only one response per person was allowed. Survey questions were emailed to an in-house list maintained by Emergo Group. A publicly available online link to the survey also solicited responses from industry via social media channels.
Due to the nature of our business, QA/RA professionals make up a much higher percentage of respondents than they would otherwise represent in the industry. Some results should be interpreted bearing this in mind.
Compared to our January 2012 survey results, medical device firms are even more positive about 2013 than there were about 2012. Overall, roughly 71% of all respondents are positive about 2013, up from 67% a year earlier. Respondents located in Asia were significantly more optimistic than their western colleagues as you can see below. Despite global economic uncertainty, results suggest that medical device firms expect growth opportunities driven by aging populations and growing middle classes in emerging markets including Brazil, India and China. (Based on 3,319 responses. Question posed to all survey respondents.)
Asia Pacific Firms More Upbeat About 2013…But North & South American Firms More Cautious (Based on 3,254 responses. Question posed to all survey respondents.)
We find it interesting that our respondents are more optimistic about prospects for their own company (80.3%) than the medical device industry as a whole (71.1%). We also note a difference between respondents in North/South America and those in the EMEA region as you will see below. This difference highlights the significant ongoing economic challenges within the European Union. Despite a dampened sense of enthusiasm among European companies, prospects for the industry remain bright for 2013. (Based on 2,985 responses. Question posed to all survey respondents.)
14.0% negative about industry prospects versus 6.0% negative about their company. (Based on 2,926 responses, mostly from the United States and Canada.)
More than 43% of companies reported sales increases of 10% or more in 2012. Small to mid-sized companies reported much stronger sales growth in 2012 than those with 250+ employees, as you will see below. (Based on 2,922 responses)
There seems to have been strong growth among smaller companies in 2012. (Based on 2,922 responses)
Sales Growth of 10% or More….
Strong sales among Asia Pacific firms comes as no surprise given the region’s rising middle class and government investments in healthcare, especially in China. (Based on 2,926 responses)
We asked this question of 1,000+ “Senior Management” but further isolated the 420 people who identified themselves as being the President, CEO, COO or Managing Director of their company. Roughly 80% of them run companies with fewer than 50 employees. Regulatory issues and new product development rank high on the list of concerns keeping C-level executives awake at night. Employee size breakdown of the executives who answered this question:
(Based on 420 responses. Asked of device manufacturers only.)
When we examine this question by size of company, the results vary dramatically. While all companies struggle with regulatory issues and new product development, smaller companies indicate that getting access to financing is their biggest challenge. Larger companies struggle with employee recruiting and increased competition. Likewise, large companies seem to feel more pressure on pricing. Our survey list is heavily skewed toward QA/RA titles so the concerns about a “changing regulatory environment” are overstated. However, the difference of opinion between small and large companies is very real. As you can see, mid-sized and large companies struggle with regulatory issues more than smaller companies. This may be due to the fact that larger companies are more likely to sell in markets with less transparent regulatory systems. (Based on 1,087 responses. Asked of device manufacturers only.)
North & South American companies are more likely to struggle with regulatory issues, while companies in Asia struggle with employee recruiting and increasing competition.
(Based on 1,087 responses. Asked of device manufacturers only.)
Nearly 64% of North American companies see negative impact from the new MDET. (Based on 1,097 responses. Asked of North & South American device manufacturers only, with most located in North America.)
We asked this question of senior management worldwide, but isolated 657 senior executives at companies located in North or South America (majority in US in Canada). As you can see the majority of participants said they plan to pass along the 2.3% tax increase in their prices and/or work to lower their production costs without laying off employees. Only 11% of senior managers we surveyed plan to reduce staff in response to the MDET. It remains to be seen what impact the MDET will have on employment. (Based on 657 responses. Numbers add up to more than 100% because respondents were allowed to choose multiple options.)
Based on 1,110 responses from all regions worldwide. Percentages add up to more than 100% because respondents were allowed to choose multiple options.
Medical device companies remain bullish about Asian markets. Japan is still #1 in healthcare spending but China will soon pass Japan and is the engine of growth in the region. Emerging markets in SE Asia are also garnering more attention. Survey participants in all regions—North and South America (61%), EMEA (70%) and Asia-Pacific (71%) rated Asia-Pacific markets highest in terms of five-year growth; interestingly, firms based in Asia rated their own region more highly than firms based in the Americas or EMEA. In terms of company size, 72% of the survey’s largest respondents rated Asia high-growth, as did 60% of small and 62% of mid- sized firms. (Based on 2,486 responses.)
Interest in the BRIC markets (Brazil, Russia, India and China) continues to grow among survey participants. Mexico is also drawing more attention as its regulatory system becomes more efficient. As in 2012, Brazil led the pack for small (20%), midsized (21%) and large (17%) firms alike. China came in second for midsized and large companies, but smaller firms ranked India slightly ahead of China—suggesting a less complex path to market in India for manufacturers with fewer resources. Nearly 18% of firms in the Americas and 19% of EMEA firms plan to expand into Brazil this year. Among Asia-Pacific firms, China ranked highest—29% of these firms plan to enter the Chinese market. (Based on 2,527 responses. Asked of device manufacturers only.)
As you can see on the previous graph, interest in Brazil and China are strong overall. However, manufacturers in different regions are focusing their expansion efforts differently. The prevalence of purple on the chart shows how much Asian firms are focused on exporting. (Based on 2,527 responses. Asked of device manufacturers only.)
A more aggressive regulatory stance by the US FDA, an evolving Chinese registration process, and ongoing challenges in Brazil likely explain the rise in frustration evident in these results. (Based on 1,350+ responses. Asked of device manufacturers only.)
Almost 42% of our QA/RA respondents said the US FDA process is more difficult that it was one year ago. The FDA seems to have taken note. Nearly half of our respondents gave the US FDA positive marks for their efforts to make the registration process easier and more transparent. (Based on 1,468 responses. Asked of device manufacturers only.)
Based on 3,509 responses worldwide.
Based on 3,509 responses worldwide.
Emergo Group fully understands that this research was not conducted in a scientific manner and differences between some subsets of results may not be statistically valid due to a small sample size. Still, our intention in conducting this annual survey is to provide a high-level snapshot of the industry’s current condition and its prospects over the coming year. We hope you found this information interesting and useful. If you have any questions regarding these results, or would like to publish information contained in survey, please contact:
Emergo Group, Inc.
VP of Global Marketing
marketing [at] emergogroup [dot] com