Report: Medical Device Company R&D Remains Stable

According to Kalorama Information, research and development spending continued to be a high percentage of revenue for most device companies. The healthcare market research firm tracks major device companies and publishes a yearly report on the state of the medical device industry. 

Kalorama found R&D spending averages at 6.7% of revenue, an insignificant change from the last five years of its report. This compares favorably with other industries. The seventh edition of the healthcare market researcher’s report, The Global Market for Medical Devices, covers the broad range of the medical device market, commenting on the drivers of the overall market.

“Device companies live and die by the innovative products they develop, so you’ll continue to see a healthy device R&D spend,” said Bruce Carlson, publisher of Kalorama Information. “There was some discussion that reimbursement changes or the medical device tax while in place might affect spending.” Instead, Carlson says, in medical device terms, revenue is the greatest indicator of how much they will spend on product development.

Compared to the automotive, defense, and telecom industries, the medical device industry invests more of its yearly revenues into product innovation, according to the research group. This reflects the competitive nature of the industry and the need to keep innovating to be selected by hospitals and payors. Customers in healthcare will generally switch a product only if it is lower cost or if it can save money in other ways, such as reducing patient days or improving outcomes, the researchers reported. The only industries that outspend device firms, Kalorama says, are pharmaceuticals and technology companies.

The report contains an overview of medical devices and their regulation in several world markets; market size estimates and forecasts to 2020 for the global market, the United States market, and several country markets, including China, Japan, India Brazil, Germany, Canada; an index of bellwether device companies; markets for specific categories of medical devices; a look at market drivers and limiters; and company profiles of major device concerns.

Kalorama Information, a division of MarketResearch.com, supplies independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare. The Global Market for Medical Devices, 7th Edition, is available at Kalorama Information.