EMERGO SUMMARY OF KEY POINTS:

• Emergo 2017 Industry Outlook survey respondents expect better sales prospects in the US and Europe than in developing markets.
• Fewer 2017 survey respondents expect high growth in Brazil, China and India than they did in 2016.
• Issues including economic and political uncertainty and regulatory compliance help explain why medical device firms are more bearish toward BRIC markets for 2017.

Medical device companies expect better sales performance in established markets in the United States and Europe more so for 2017 than in previous years, when developing BRIC markets held more appeal for the industry.

According to Emergo’s Global Medical Device Industry Outlook for 2017, in which more than 3,000 industry participants took part, optimism for traditional—albeit oversaturated and highly competitive—US and European markets increased significantly between January 2016 and January 2017. For the US, 51% of respondents expected strong growth in 2016, while 60% of respondents expressed similar optimism in 2017. Optimism for European growth grew at an even stronger rate from 2016 (40% of firms) to 2017 (51%).

Growth expectancies for major emerging markets, on the other hand, declined over the same period:

• Brazil: 24% of 2016 survey respondents expected strong growth; only 17% of 2017 respondents are optimistic for this market.
• China: Optimism for this market fell 11% over the past year, from 44% of respondents in 2016 to 33% in 2017.
• India: Only 18% of our 2017 respondents expect strong growth in the Indian market, down from 27% of our 2016 respondents.

What might explain this marked turn away from developing markets toward “safe haven” US and European markets, even as those markets present their own challenges in terms of regulatory compliance and competition?

In Brazil, an economic slowdown coupled with political uncertainty may be affecting foreign manufacturers’ heretofore high sales expecations for this largest of Latin American markets. In China, on the other hand, medical device market regulators have sometimes issued significant new requirements with little or no advance notice to registrants, and implemented those requirements in very short or immediate timeframes.

Given these economic and regulatory uncertainties in larger emerging markets, it’s understandable that more medical device manufacturers would look to established markets for stronger sales growth in 2017.