EMERGO SUMMARY OF KEY POINTS:

• A third of all medical device companies taking part in Emergo’s 2017 Global Medical Device Industry Outlook survey reported sales increases of 10% or higher for 2016.
• Smaller firms with fewer employees and lower operating margins were more likely to report sales of 15% or more.
• Larger firms with higher operating margins and exposure to more markets with challenging conditions were more likely to report lower sales increases.

One third of all medical device companies participating in a recent Emergo industry survey reported sales increases of 10% or more for 2016.

Results in the 2017 Global Medical Device Industry Outlook show that among more than 3,000 industry participants, a strong majority (90%) of respondents saw 2016 sales increases; only 10% of firms, mostly smaller companies with less than 50 employees, reported sales decreases over the same period.

It was smaller firms that also reported sales increases of 15% or more with greater frequency: 34% of firms with fewer than nine employees and 31% of firms with fewer than 50 employees saw such gains for 2016. Lower operating margins likely explain how smaller firms outperformed larger manufacturers.

A majority of larger firms, on the other hand, reported more modest sales increases for 2016. Nearly 75% of respondents with 1,000 or more employees reported sales growth of 10% or less, and 65% firms with fewer than 1,000 employees also saw increases under 10%.

Performance and market factors

Besides operating margins playing a role in smaller and larger firms’ 2016 sales performance tracks, where these firms were operating in 2016 also partially explains why smaller firms saw such higher growth rates.

In developing markets such as Brazil, China and Mexico, where survey respondents expect lower returns and greater regulatory challenges in 2017, a high percentage of firms reporting higher sales increases also reported little to no experience in these markets. Larger respondents that reported more modest 2016 sales also reported more familiarity with—and exposure to—these markets; lower performance in Brazil, China or other emerging markets may in turn explain these firms’ lower sales increases compared to smaller companies operating primarily in “safer” US and European markets.