Founder and President of Bonifacio Consulting Services Mark Bonifacio shared his thoughts on the future of the medical device merger and aquisition cycle for Orthopedic Design and Technology. Here are 11 takeaways.
1. Mr. Bonifacio's largest takeaway is that if the market remains unchanged, he believes merger and acquisition activity will continue throughout the rest of this year and into next year unchanged. However, he cautioned that the presidential election could affect the future of medical technology investment.
2. Mr. Bonifacio said the Patient Protection and current form of the Affordable Care Act will continue to drive value based care. While an aging population, a growing middle class and an increase in chronic diseases will continue to support a growing medical technology field. He added that while the U.S. is the largest spender and sees the largest returns in global healthcare expenditures, developing countries are growing their spending by double digit figures.
3. Mr. Bonifacio believes that with healthcare accounting for 18 percent of the United States' gross domestic product, the expenditures cannot continue to grow on that pace. Especially considering China, the closest competitor, is only at 12 percent.
4. The medical device industry has seen several merger and acquisitions recently because of a fragmented market at the original equipment manufacturer and contract manufacturer levels.
5. Growing competition from strategic buyers in the market and private equity looking to acquire assets in the market will continue to fuel new mergers and acquisitions.
6. Over the last few years, the market has seen growth from companies entering it, and medical technology contract manufacturing is a valuable commodity when secured through acquisition. Mr. Bonifacio believes the market "appears to be hungry for more deals."
7. Mr. Bonifacio looked at the success that healthcare devices bring to the market today and claimed that the device sector will continue to be a winner in the value-based market. He said the companies that continue to innovate and look for disruptive changes will lead the pack.
8. Mr. Bonifacio believes collaborations similar to the one between Medtronic and Apollo Hospital will continue in the United States and around the world. He believes the market will begin to see deeper ties between devices and services/procedures as original equipment managers manufacture more disease-specific devices.
9. Mr. Bonifacio does caution that healthcare trends are adopted slowly throughout the industry and that any technological change will take time.
10. Telemedicine/telehealth is a market, Mr. Bonifacio believes, will see growth because of the influx of patients. Although it's different from what has been traditionally offered, he thinks the demand for patients to get the healthcare and products they need is great.
11. Mr. Bonifacio's final point is if original devices manufacturers and contract manufacturers embrace the changing healthcare landscape and adapt new ways of doing business, they will be rewarded in the future.
More news relating to orthopedic and spinal devices:
1. Medline to build new distribution center; adds 100 jobs in Florida — 6 points
2. 3D technology makes its mark in medical device industry — 3 observations
3. Spine Wave launches Velocity L Expandable Interbody Device & lateral system: 5 takeaways