Justice scale, healthcare, cost

Will the 2020 Elections Affect MedTech Investment? Maybe

By Maria Fontanazza
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Justice scale, healthcare, cost

The outlook for 2020 and beyond is positive, but medical device companies must continue to evolve their technologies and partnerships to keep the attention of investors.

The future continues to look bright for the medtech market, but in order to keep the pace with the evolving healthcare industry, device companies must stay focused on technology that improves patient outcomes. And while last year ended on a high note with the permanent repeal of the medical device tax, it remains to be seen whether the upcoming elections will have any sway on investment in this market. A recent paper released by KPMG, LLP analyzes the results of a survey of 330 healthcare investment professionals and sheds some light on what business trends we can expect in the medtech industry moving forward.

“We saw a high amount of deal activity in 2019 despite some concerns of a bubble, and that is likely to carry over to 2020,” said Carole Streicher, deal advisory leader for KPMG’s Healthcare and Life Sciences practice in a press release. “The election-year political climate, however, has given some cause for concern, but other fundamentals are very positive for deals and investment, particularly around the need to cut costs and invest in innovation.”

The authors project that the medtech sector will grow at more than 5% each year, with annual worldwide sales projected to hit $800 billion in 10 years. The following are some of the highlights from the “2020 KPMG Healthcare and Life Sciences Investment Survey” as they relate to the medical device sector.

  • Factors investors are keeping in mind
    • Precision medicine will help drive the diagnostics market
    • Robotic surgery remains attractive for M&A
    • Devices that integrate artificial intelligence
    • The regulatory environment continues to evolve, taking into consideration EU MDR/IVDR and changes to FDA 510(k) and de novo clearance processes
  • Market Disruption
    • Positive: Shift to value-based care, paying for innovation, and new market entrants
    • Negative: 2020 election
  • Technology implications
    • Interoperability is key: Real-time communication, compatibility with electronic health records, and maintaining security and patient privacy
    • Medtech companies are pursuing partnerships with technology-focused companies
  • Within the survey respondents, 20% were interested in investing in the medical device sector
KPMG, investment
Graphic from the 2020 KPMG Healthcare and Life Sciences Investment Outlook; Appendix: Investment Outlook Data Breakdown. Figure used with permission.

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