Medtech Market to Approach $478B in 2020, Led by Medtronic

Where will the medical technology industry be in five years? That question takes center stage in a new report by Evaluate Medtech, which predicts a global market of about $478 billion in 2020.

After years of domination, Johnson & Johnson is expected to lose its lead in terms of sales. Last year, J&J raked in $27.5 billion in medtech sales, but its move toward divesting medical device and diagnostics units likely is going to cost it the top spot, particularly with the recent wave of megamergers.

Replacing J&J’s in the top slot will be Medtronic, which continues to swallow up companies, the report, titled EvaluateMedTech World Preview 2015, Outlook to 2020 says. Since its nearly $50 billion megadeal with Covidien, Medtronic has bought 11 more companies with a combined price tag of $1.6 billion.

Elizabeth Cairns, who authored the report, says the device industry still may see megamergers, but smaller “tuck-in” deals also could be more prominent.

Device Giant

With all of its acquisitions, Medtronic is expected to be the leader in cardiology, raking in sales of about $11.6 billion by 2020. That represents a 21.4 percent market share, nearly double that of St. Jude Medical’s 11.7 percent.

Other companies expected to gain ground are Becton, Dickinson (climbing to the number five spot) and Zimmer Biomet (climbing to number 13). Zimmer had been 20th in sales prior to its merger with Biomet.

Despite losing its title as top medtech company, J&J is expected to remain the leader in orthopedics, with about $10.5 billion in sales in 2020, while Zimmer Biomet is anticipated to increase its market share. Overall, the orthopedics arena is expected to grow about 3.2 percent each year to $42 billion.

In diagnostics, Siemens is expected to remain number one, but GE will be nipping at its heels. The report predicts Siemens sales of $10.8 billion in 2020, followed by GE sales of $10.1 billion — 26.5 percent and 24.8 percent of the market, respectively.

The industry is also benefiting from a slew of FDA PMA and humanitarian device exemption approvals.

Compared with 2013, first-time PMAs and HDEs grew 43 percent to 33 in 2014 — and that total already has been reached this year.

Cairns says the FDA’s performance, in combination with the merger trends, should help companies develop innovative technologies. — Elizabeth Hollis