Dive Brief:
- The outlook for the U.S. medical device industry in 2019 is positive, according to a report released Thursday by Moody’s Investors Service. The credit ratings agency said industry success will be aided by earnings growth from new products and solid demand in emerging markets, which is expected to see a double-digit percentage increase.
- The forecast for earnings before interest, tax, depreciation and amortization is for growth of 4.5% to 5.5% for companies on an organic basis, the credit ratings agency said in the report.
- Headwinds on the horizon for the industry include the potential for rising trade tensions and the reinstatement of the medical device excise tax in 2020, Moody’s said.
Dive Insight:
Moody’s sees the U.S. medical device industry as a bright spot in healthcare in the year ahead. In contrast to the positive outlook for devices, the credit ratings agency gave a stable outlook to the global pharmaceuticals and U.S. for-profit hospital industries.
Healthcare will represent a rising portion of the gross domestic product for most countries in 2019, but with that growth will come severe budgetary pressures and efforts to control spending. Payers will continue to focus on cost-effectiveness and value as a result.
Medical device makers will see mid-single-digit revenue growth driven by product innovation across most companies and categories, the agency said. Sales in emerging markets will continue to grow more than 10%.
By Susan Kelly | MEDTECHDIVE
Image Credit: Depositphotos
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