MedicalDevices – Supply and Demand
MedicalDevices – Supply and Demand
Medicaldevices market is a unique business field with its own uniquechallenges. It is, therefore, imperative to treat it specially interms of meeting its demand and supplies while at the same timeensuring profitability and sustainability of the venture. Statisticsfrom the past indicate that the medical device industry has alwaysmaintained an annual growth of 5 percent with their margins beingbetween 23 and 25 percent. Generally, it has also been observed thatdespite the challenges faced, the medical devices market has oftenoutperformed other industries in the market by a great margin.
Thenational market for medical supplies is mainly affected bycompetition from imported devices, government regulations andstandards, which have to be maintained ("Capturing the new‘value’ segment in medical devices", 2015). Finally, withthe advancements in the field of science and new challenges in themedical field, it is important to have continuous research anddevelopment, which then affects devices in the market and theirprices. On the other hand, demand is affected by several factorsincluding the population age, the health of the economy and othermarkets that relate to the medical devices markets.
Governmentregulation plays a major role in the decision regarding the type andquantity of goods available in the market. These goods are usuallyeither used or new. If the government is not strict on the age andquality of goods available in the market, it then follows that thesupply of any one type of good will rise while the quality will godown. As a result, the prices of all goods go down, affecting theprofit margin especially that of the new goods ("AccuVal |Insights | Industry Insights | Supply and Demand Increasing Overall",2016). It is, therefore, important to be aware, as a seller, to havethe best quality and most affordable devices while also ensuring thatthe required regulations and standards set by the government aremaintained.
Internationalmanufactures and the general international market more than oftenaffect the national market of medical devices, unlike most of othergoods market. If the production costs of countries such as India andother East Asian countries is low, their good may be imported intoour national market and have prices much lower than the locallyproduced devices ("AccuVal | Insights | Industry Insights |Supply and Demand Increasing Overall", 2016) . The influx insupply will also affect the prices greatly, thereby affectingsustainability of local industries and sellers who specialize onlocally manufactured medical devices.
Athird factor affecting demand and supply of the medical devices isthe research and development invested in gaining deeper knowledge,better devices and cheaper production while maintaining quality.Rapid changes for the better in technology have affected the expectedtrends of the manner in which medical devices are used to treatpatients. The new devices that embrace results of recenttechnological research have reduced the time the patients take torecover and are geared to ensuring more affordable health care forthe patients ("Medical Device Technologies Market Dynamics,Segments and Supply Demand 2015-2025 |", 2016). It, therefore,follows that the equipment already stocked may be outdated in amatter of months regardless of the cost.
Demandof medical devices is very reliant on the population requiring themedical attention. Generally, the aging population requires moremedical attention compared to the youthful population. This is themajor determinant of the devices required in terms of type, qualityand quantity. With an expected rise from below 12 percent of peopleaged 65 years and above in 2000 to over 20 percent in 2030, it Iobvious that medical devices markets is expected to gradually have arise in demand in the coming years. In addition, due to the emergingmarket trends and requirements of healthcare, users of medicaldevices might prefer to use these devices at the comfort of theirhomes and, therefore, a rise in demand. Some of the devices have beenshared and sometimes forced patients to remain in hospitals underhealthcare workers. This lead to a rise in the demand by customers totake care of themselves.
Thehealth of the economy in general affects the healthcare industry aswell. The rate of usage of medical devices improves with animprovement in the general health of the economy. Other factors inthe industry such as insurance helps meet the healthcare requirements("Medical Device Technologies Market Dynamics, Segments andSupply Demand 2015-2025 |", 2016). With a more stable healthiereconomy, the access and demand for these services increases, therebyaffecting the frequency of need of use of medical devices.
Sellersof medical devices in future, have to divert from the conventionalsale of clinical features and devices in established markets. Ratherthey will have to venture into new segments and focus on specificend-to-end solutions in order to ensure an increase in revenue andmaintain margins (Loisance, 2004).
Finally,the medical devices market is reliant to the health sector ingeneral. Therefore, for it to be performing well, all other relatedmarkets have to be performing well too. It therefore is important toensure there is adequate research in other healthcare fieldsincluding drugs and cures to various newly emergent disease andconditions ("AccuVal | Insights | Industry Insights | Supply andDemand Increasing Overall", 2016). This will ensure the field ofmedical care is always on the rise.
Forthe future medical devices businesses to be more successful, theywill need to be market oriented and increase specification. Today’sbusinesses are generally undifferentiated and less proprietary. Themedical devices industry needs to follow the nature of other consumerindustries to specialization ("Medical Device TechnologiesMarket Dynamics, Segments and Supply Demand 2015-2025 |", 2016).Other questions that this industry might have to face include thepossibility of partnership. In order to beat the challenges in pricesand regulations, the sellers might have to consider collaboratingwith the manufacturers in order to lower costs and increase profitmargins.
Itwill also be prudent to embrace IT fully both in market decisionmaking and in the manufacturing and operations of medical devices.This can be expected to reduce errors and operation costs of medicaldevices. Other aspects of healthcare may also be included in thesupply of medical devices to increase the values of the medicalsystem while ensuring no dilution of margins. Another importantconsideration is taking up the whole production line of medicaldevices to carry out the manufacturing to distribution to consumersand possibly providing the advice on usage. The supplier would usethis strategy to reduce costs while increasing the profit margins.
AccuVal| Insights | Industry Insights | Supply and Demand IncreasingOverall.(2016). Accuval.net.Retrieved 31 July 2016, fromhttp://www.accuval.net/insights/industryinsights/detail.php?ID=10.
Capturingthe new ‘value’ segment in medical devices.(2015). McKinsey& Company.Retrieved 31 July 2016, fromhttp://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/capturing-the-new-value-segment-in-medical-devices.
Loisance,D. (2004). Cardiac assist devices: present status and futureopportunities. ExpertReview of Medical Devices,1(1),43-48. http://dx.doi.org/10.1586/17434418.104.22.168.
MedicalDevice Technologies Market Dynamics, Segments and Supply Demand2015-2025 |.(2016). Medgadget.Retrieved 31 July 2016, fromhttp://www.medgadget.com/2016/07/medical-device-technologies-market-dynamics-segments-and-supply-demand-2015-2025.html.