Report: Medical Technology Industry 'Under-Investing' In R&D by Bruce Japsen
Medical technology firms aren’t investing enough in research and development to keep pace with the needs of consumers gaining more clout in a value-based healthcare system, a new report indicates.
Consulting firm EY’s 2018 report on the medical technology industry shows revenue growth of 4% last year to a record $379 billion , but investment in research and development was largely flat. And that’s a problem, EY consultants say, as those picking up the tab for healthcare demand the latest in digital technology and devices to improve quality and reduce costs.
“R&D investment growth has dwindled in recent years, declining to 4.7% in 2013–17 from an average of 15.5% in 2000–07,” EY’s medical technology industry report said. “Yet, despite the urgency to invest in new capabilities, medtech companies in aggregate are under-investing in R&D. Year-over-year investment in R&D held steady in 2017, but — as with revenue growth — the longer view … reveals that the rate of R&D investment growth has dwindled in recent years, declining to 4.7% in 2013–17 from an average of 15.5% in 2000–07.”
The report is being released during the Advanced Medical Technology Association's annual MedTech Conference. AdvaMed includes some of the nation's largest medical technology companies including Johnson & Johnson, Abbott Laboratories, Medtronic, Zimmer and Baxter International as well as scores of medtech startups, device makers and diagnostic companies.Though AdvaMed's member firms continue to grow and the venture capital climate remains strong, the medtech industry as a whole isn't keeping pace with the technology industry, EY's report indicates. The "urgency" described in the EY report is in part due to the shift from fee-for-service medicine to value-based care, which rewards medical care providers with the best health outcomes and quality. Medical technology is critical to managing the health of populations of patients, making sure they get the right care, in the right place and at the right time.
Source: https://www.forbes.com/sites/brucejapsen/2018/09/24/report-medical-technology-industry-under-investing-in-rd/#5c36401451a7