All About the Data

Well, OK, realistically I’m sure the love of industry statistics isn’t universal. Fine. I’m a geek; I made my peace with that a long time ago. To put it another way, it often helps to know what other people are thinking (with all due respect to the mavericks out there who couldn’t care less about the other guy’s opinion). But when there are business decisions to be made, of course it helps to cast your options in the light of broader market trends.

The Emergo Group, an Austin, Texas-based medical device regulatory affairs consulting company, recently released the results of its annual industry survey. The 2013 installment was conducted in January with approximately 3,500 respondents. Clearly, due to the nature of Emergo’s business, quality and regulatory specialists (57.3 percent) make up a significant chunk of the survey’s respondents. But, as usual, the results—though not scientific—provide an interesting glimpse into a small, but highly engaged subset of medical device professionals. A total of 16.3 percent—the next-highest—subset of survey-takers identified themselves as “CEO, COO, president or managing director.” Roughly 54 percent of those surveyed were in North or South America, followed by the grouping of Europe, the Middle East and Africa (EMEA), and then Asia-Pacific. A total of 74.6 percent work for medical device or in-vitro diagnostic manufacturers.

What’s particularly noteworthy about Emergo’s survey is how responses vary by region. Overall, about 71 percent of respondents are positive about the business environment for the medical device industry in 2013 (49.7 percent were “somewhat positive” and 21.4 percent reported being “very positive”). That’s up from 67 percent from last year. Respondents in Asia were more optimistic than their Western counterparts (30.9 percent of survey takers in Asia were “very positive” compared to 20.9 percent in North and South America and 17.8 in EMEA countries). According to Emergo, 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.

For 2012, more than 43 percent of companies participating in the survey reported sales increases of 10 percent or more. Small to midsize companies reported much stronger sales growth in 2012 than those with more than 250 employees. Out of those firms, medical device companies in Asia-Pacific led the way with 44 percent reporting sales gains of more than 10 percent. A total of 31 percent of respondents from North and South America reported such growth, and 35.1 percent of EMEA firms reported the same.

When CEOs, COOs and managing directors only were asked about the biggest challenges they face, 44 percent of respondents said a changing regulatory environment. New product development was high on the list with 41.8 percent saying it’s an obstacle. The third-biggest challenge noted (by 40.6 percent) was access to capital. A total of 80 percent of the CEOs, COOs and managing directors run companies with fewer than 50 employees. Emergo analysts said that North and South American companies are more likely to struggle with regulatory issues, while companies in Asia more often tackle issues with employee recruiting and increasing competition.

“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,” Emergo’s analysts noted. “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. Midsize 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.”

Interest in the BRIC markets (Brazil, Russia, India and China) continues to grow, and Mexico is drawing more attention as its regulatory system becomes more efficient. Brazil led the way for small (20 percent), midsize (21 percent) and large (17 percent) companies. China came in second for midsize 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,” analysts wrote. Nearly 18 precent of firms in the Americas and 19 percent in EMEA plan to expand into Brazil this year.

There is a lot more information in the survey than I have room to detail here, but take a look for yourself (www.emergogroup.com). There’s great info about companies’ responses to the medical device tax as well.

While you’re checking out new things, keep an eye out for the latest content addition to Orthopedic Design & Technology. In the next issue of ODT, you’ll find a section called “The Last Word.” Going forward, the last page of ODT opposite the back cover will be used for short parting thoughts, insights, interviews and other reporting from our editorial team and contributors. The topic may change in every issue, but the value of the content won’t. We know there will be news you can use and maybe some good data, too.

Christopher Delporte
Editorial Director, Medical Devices