As we look to the future, the medical device industry faces a world of opportunity. New markets continue to emerge, the enactment of legislation like the Affordable Care Act has introduced new patient populations and existing patients continue to drive the need for novel solutions. The much maligned medical device excise tax has been suspended for 2 years and while industry growth has slowed recently, it still greatly outpaces Gross Domestic Product in many countries.

But uncertainty lies ahead as well. New regulations and standards are emerging, healthcare dynamics are evolving, reimbursement rules are becoming more complex and companies are facing an increasingly competitive landscape. This challenging climate requires that device companies reduce costs, streamline their operations and innovate more quickly.

Changes in a Global Environment

In recent years, changes to the global regulatory environment have burdened medical device companies with greater accountability to authorities and higher costs, with little or no commercial gain to be had. The FDA’s introduction of the Unique Device Identification (UDI) system aims to improve patient safety and track affected devices in the event of a recall, but it is costly and complex to implement. Similar legislation is expected to be introduced in Europe and other countries around the world, adding to the complexity of running a global operation. In addition, while the much-debated Medical Device Excise Tax has been suspended until 2018, it still looms on the horizon.

Beyond the regulatory challenges that exist, market dynamics are changing. Emerging economies have seen huge growth but that growth comes with risks for foreign companies looking to capitalize. Regulatory environments often favor local device companies and foreign entities have found partnering with local firms for sales and distribution to be a potentially risky move. The threat is very real that companies will copy their devices, capture their treasured intellectual property and become direct competitors.

The Opportunities Ahead

Amid these challenges, however, there is great opportunity and technology will play a large role.  From X-ray tubes to pacemakers to complex imaging equipment, the medical device industry has always embraced innovation with the goal of improving and saving lives. A recent trend in that evolution is the concept of additive manufacturing or 3D printing.  Unlike traditional manufacturing, additive manufacturing does not remove material. Rather, 3D printing involves adding successive layers of material to form a 3D object. This concept is exciting for the industry as it creates the possibility of personalized medical devices, the creation of models for clinical trials, mass customization and even 3D printed human organs.

QAD: A Partner to an Industry Transition

While there is little doubt that the medical device industry faces an uncertain future and challenges abound, organizations will adapt, and advances in technology and manufacturing will play a role in the transformation.

For more information on QAD’s proven record of providing effective ERP solutions to global medical device manufacturers, visit