By: Uday kanth Kankekar -- Senior Research Analyst
31 March, 2014
Medical device industry is currently under the high pressure because of the 2.3% of the excise tax in US and the price pressure from all parts of the globe especially from the emerging countries where the healthcare market is witnessing the double digit growth rate. In order to combat the competition and survive in the market the only option that the med-tech firms can do is to reduce their production cost, that can be done by getting the medical device components at the low price but in the market there are less suppliers who can cater to the medical device companies because of this the bargaining power of the buyer is less. Under these conditions medical device companies can look for various gateways to counter increasing cost that they are incurring at various stages of medical device manufacturing. Current supply market of medical devices is fragmented however is heading towards consolidation with major suppliers going for acquisitions and mergers, leaving medical device companies with lower leverage of negotiations. All these hurdles have further elevated the cost for medical device companies. Under the current circumstances the only ray of hope for medical device companies come from non-medical device players venturing in to the healthcare space and other option is to have the best engagement model with the suppliers to leverage on cost without compromising on the quality. This Whitepaper focuses on advantage and different engagement model that company can adopt with current and new entrants and leverage cost savings in this highly complicated and regulated market.