Growth in Pharma and Medical Devices Industries

The pharma and medical device industries have experienced unprecedented changes for the last 10 years due to the overall demand of their products in the healthcare industry. As the market for their products continues to evolve, manufactures from both companies have faced a great challenge. They have to adjust to a new and open environment and also need forward thinking to help maintain an innovative edge.

According to recent studies, the growth of the pharma andmedical device industries has been influenced by several factors. Among the top five include personalized care, increased consumer demand, increased use of outside contract services, collaboration of the two industries and tightened government regulation on drugs and medical devices.  The factors are discussed in details below:

5 Trends that have led to the Growth in Pharma and Medical Device Industries
  1. Increasing Government Regulations

The increase in government regulations has impacted pharmaceutical and medical devices for the last 10 years. With many of these companies ready to meet the government regulations, the companies are thriving unprecedentedly. According to recent statistics, more than 49% of pharma and medical device industries are willing to meet government regulations in manufacture and marketing of their products. In the next 2 years, it is estimated that more than 75 percent of the world’s medicine will be protected under legislation.

The government has used serialization, regulations, track and trace, and Unique Device Identification (UDI) for all medical device manufacturers which means that the manufacturers have to come up with new machinery for their operations. After evaluation of new machinery, the medical device makers say they are concerned with Preventive maintenance, automation, flexibility, and cleanability in the new machinery.

2. Increase in Consumer Demand

The demand for pharmaceutical and medical devices has experienced growth for the last few years. The growth has been driven by:
·         The world’s aging population. As these people need assistant at home such as monitoring health, there is need to buy medical devices to help them monitor their health and connect with their doctors.
·         The increase in rate of insurance coverage in the United States. After the introduction of the ACA, almost 70 percent of Americans have obtained insurance coverage. When both the poor and marginalized have insurance coverage, they can obtain medical devices as advised by their doctors which can be reimbursed by their insurers.
·         Increased healthcare availability in emerging markets.
·         Increase in number of chronic diseases has also led to an increase in demand for drugs and medical devices.
Many pharma and medical device companies can move up with the rising demand through automation, but about 40% have not yet integrated their manufacturing lines.

3.Collaboration Between Pharma and Medical Device Manufacturers

About 67 percent of these companies have predicted spending more on capital equipment in the next 1 to 2 years. The collaboration of pharmaceutical and medical device companies have come up with new technologies that will help them:
·         Utilize the new sophisticated drug delivery methods
·         Improve the integrity of their packages
·         Enable better compliance with the consumers
·         Improve product safety

According to research, the medical device technologies have overlapped with pharmaceutical products, forcing the two companies to work together to improve operations and meet consumer demand for their products. With a majority of these companies predicting more spending in capital equipment, United States remains the top market for medical devices and pharmaceuticals. Both companies also create great opportunities for OEMs.
4.Personalized Care

Pharma and medical device companies have shifted to operational solutions which are more suited to personalized care. The operational solutions are concentrated around:
·         Shorter batch runs
·         Highly-valuable items
·         Fastened production changes
·         Specialized packaging

5 Elevated use of Outside Contracting Services


According to recent statistics, about 30 percent of all packaging and processing operations in the medical device and pharma currently use contract packagers (CPOs) and contact manufactures (CMOs).

About 75 percent of medical device companies and more than half pharmaceutical companies predict elevated use of outside contract services in the future.
The need to use outside contractors is fueled by:
·         The need to meet the increasing consumer demand
·         The need for the companies to run smaller batches
·         Reduce the total capital spending

Pharma and Medical Device Market Trends

According to the Association for packaging and Processing Technologies (APPT), the market for medical devices and pharmaceutical products continues to grow. In 2015 alone, the medical device industry produced $350 million in global sales while the pharma industry reached $1.1 trillion. Medical devices make up to 30 percent of United States shipment while pharmaceuticals account for 70 percent. The growth in pharma and medical device market has been influenced by:
  •         Market Growth and Industrial Consolidation

Mergers and acquisitions have impacted the two industries’ market landing to a 2-digit growth over the past 5 years. Market growth has also been catalyzed by the increased life expectancy leading to increased aged population. In 2020, it is estimated that the number of people over 65 years will increase by 8.5 percent surpassing that of children under 5 years for the first time in human history.
Developed markets have shown the innovative medical devices and special branded drugs drive market growth. It is estimated that 40 percent of pharma industry market growth has been catalyzed by specialty drugs.

Also, it is estimated by 2020 that more than half of the world’s population will consume more than 1 dose of medicine per individual per day. This is an increase of about 34% from 2005. The emerging markets will as well see growth due to the overall increase in the use of medical devices and pharmaceutical products and the burgeoning middleclass.

Meeting Consumer Demand

To help meet the growthexpectations and industry trends such as smaller batch runs, serialization, and increased number of SKUs, 2/3 of these industries have predicted increase in capital spending in the next 1 to 2 years.
The top improvements in pharma and medical device industries that have led to increased purchase of new equipment include:
·         Use of measuring OEE
·         Increasing throughput
·         Expansion in integration and automation
·         Increased utilization of robots in the industries
·         Enhanced versatility during changeover

Location: New York, NY, USA

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