It is no question that the world’s population is facing an ageing demographic. Governments and healthcare institutions are in a long term struggle to reduce healthcare expenditures while maintaining quality of care.

The medical equipment segment is large and includes products such as high-tech diagnostic solutions used in hospitals and labs, specialized equipment such as pacemakers and heart valves, simple hand- held devices that can be used at home, computer/cloud-based software designed for early detection checks and precision-based robotic surgery equipment. Most especially, innovation is also strong in this industry with new drugs, medical equipment and devices constantly being launched in order to expand preventative care and improve efficiency of diagnosis and treatments.

The pipeline for new devices is growing, with particular focus on robotic surgery, diabetes and cardiology segments. These new devices/advancements help to improve the efficiency of care, reduce healthcare costs and studies show that such devices can prevent individuals from entering the hospital system through early detection and constant monitoring functionality.

Evidence that the US government is placing more importance on medical devices include: (1) Approvals for new devices are up 4x from 2009 and up 40% vs. the previous peak; (2) The FDA has improved its operations in the past few years in order to streamline and standardize the approval process of medical devices and shorten the time required for applications to be approved; (3) There are potential plans to take steps in order to allow “breakthrough devices” to get automatic temporary coverage by Medicare.

Furthermore, technology companies, such as Apple, Google and Samsung are also looking to enter this segment. In some cases, this may potentially harm medical device companies, e.g. Apple putting a heart monitoring app on their iWatches. In other cases, this could lead to collaboration which benefit the medical device companies, such as Samsung partnering with Medtronic to develop a diabetes app.