COVID-19 is here: Medtech may never be the same | Page 4 of 11

3. Is it time to reshore some medical device production?

U.S. China trade war medical device industry suppliers

[Image by art director Matt Claney]

Over the past two decades, medical device makers have sought the same efficiencies and lower costs as those in other industries by moving manufacturing to China and Mexico and to countries with emerging economies. But the nationalism evoked by COVID-19 in the U.S. and other countries revealed vulnerabilities in the supply lines that delivered devices and protective equipment to U.S. hospitals.

Even as car manufacturers and smaller device makers stepped up to fill the ventilator gap, the task of securing parts through traditional channels was more difficult as the pandemic hit suppliers in other parts of the world or were pressured by their own governments to stem the supply of parts headed out of the country.

This exposed a vulnerability that medtech companies must correct, according to industry professionals. Medtech companies will likely be looking to bring at least some of their operations back to the U.S.

“I don’t believe it’s going to be that drastic,” said Michael Heyl, a partner at the international law firm Hogan Lovells. “But I do believe companies will be diversifying their supply chains so there aren’t sole-source suppliers or regions for things that they need.”