Trends and segments for medical devices in the EU market

Industry has benefited from the accession of CEE countries

• The EU market has opened up opportunities for pan-European co-operations. Several medical devices producers have been busy in cross-border mergers and acquisitions.

• This development not only contributes to more intense competition among EU producers, but also enables companies to utilise comparative advantages in different regions to increase overall efficiency.

Outlook : subcontracting to DCs is expected to increase in the long term

• So far, subcontracting to DCs mainly concerns medical disposables. Low labor costs in DCs are a major reason for EU producers to subcontract large volumes of these products.

• This pattern of subcontracting low-value products to DCs is expected to continue. Contrary, the production of technologically sophisticated, high-value products (mostly medical devices) still mainly takes place in the EU.

• Although DCs provide a cost advantage in terms of labor costs, and sometimes also raw materials, DCs generally lack the expertise to manufacture such products.

• The growing cooperation between EU and DC producers of medical disposables however is expected to provide DCs with the knowledge and resources needed to produce also technologically sophisticated products.

Outlook: beyond the recession

• The economic recession has also had its’ influence on the demand for and production of medical devices. However, compared to other industries where sharp declines were registered, the medical devices sector continued to perform relatively well.

• The major effect of the economic recession has been the growing need to contain health costs, among other things as a result of a cut in public spending in several EU countries.

• The outlook for the years to come is moderately positive; demand for medical devices is expected to show stability or perhaps a small growth.

• Within the EU market, it is expected that there will a growing tension between the need for containing healthcare expenditure and the continuous drive to remain leader in innovative medical devices and healthcare technology.

• On the one hand hospitals are expected to keep on with the latest technologies, on the other hand they are expected to increase efficiencies. This is only possible with innovative medical devices that also result in clear efficiency improvements.

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