GROWTH IN THE IMPLANTABLE DEVICE MARKET

The implantable medical device market is growing organically due to increased incidence of obesity, osteoporosis-related fractures, and cardiovascular disorders as well as technological developments allowing for safer surgical procedures in an aging population. However, fiscal uncertainty in the US, new regulatory requirements in Europe, and ongoing cybersecurity threats on wirelessly connected devices may impede market growth.

Implantable Device Market: Segmentation and Dynamics

An implant is a medical device that temporarily or permanently replaces, supports, or enhances a biological structure. While estimates of the implantable medical device market vary, industry experts agree that is generates at least $70B annually and is projected to top $100B in the coming years.

The orthopedic segment generates one-third of the global revenues in the implantable device market with reconstructive joint replacements (hip and knee) accounting for two-thirds of that value. This segment is growing due to rising obesity rates and corresponding increases in osteoporosis-related fractures. Additionally, higher procedure safety and better implant materials have made orthopedic implant surgery an option for more patients (including patients over 80 years of age). Experts anticipate continuous segment growth due to technological advancements such as patient-specific implants from 3D printing.

The cardiovascular implants segment is the second largest revenue generator divided between pacing devices, stents, and structural cardiac implants. The cardiovascular implants segment is also expected to grow steadily in the coming years due to the rising prevalence of cardiovascular disorders and an aging population.

Regulatory Challenges

North America accounts for nearly half of the global implantable medical device market and is projected to maintain its dominance followed by the European market. This hegemony may impede overall market growth due to upcoming regulatory challenges. For example, the US Medical Device Excise Tax was introduced under the 2013 Affordable Care Act and levies a 2.3% tax on the sale, use, or lease of specified medical devices. While implementation of the tax was delayed to the end of 2019 and the future of the tax is still in question, its implementation would almost certainly impact US market growth.

Meanwhile, in 2017, the EU introduced the Medical Device Regulation (MDR), which will come into effect in 2020, as a result of a push for more transparency. The MDR strengthens requirements for clinical data to improve device safety and efficacy. The need for more transparent medical device development was also highlighted in a 2018 report by the International Consortium of Investigative Journalists which details how medical devices are tested, approved, marketed, and monitored. The investigation reports that 1.7 million injuries and 83,000 deaths could be linked to malfunctioning medical devices over a 10 year period in the US. It concludes that rapid technological development and the need for manufacturers to reach the market quickly compromises the safety of devices.

Industry consensus is that the EU MDR will make medical device development and marketing more challenging. For instance, existing products must be recertified and may be reclassified as higher risk. This reclassification would require updated clinical data, technical documentation, and labelling. There will also be new reporting requirements for incidents, injuries and deaths in a publicly accessible EU database. It is unclear whether UK standards will align with the EU MDR after Brexit. If they do not, device development and sales in the UK may suffer due to duplicate regulatory efforts.

The Cybersecurity Threat

Rising cybersecurity concerns also cast a pall of uncertainty on market growth. There is no confirmation that an implantable device has ever been successfully attacked, but it has been proven as a technical possibility. The first practical demonstration of cybersecurity vulnerabilities of cardiac implants (pacemaker and ICD) was published in 2008. Vulnerabilities have also been demonstrated for other implants including insulin delivery pumps and neurostimulators. Hackers could exploit security flaws in the wireless connectivity of implantable medical devices to access, collect, or alter information about the device or even compromise the device.

While the risk is incredibly low, the WannaCry episode reminded the healthcare industry of the vulnerability of connected systems. The mere existence of risk must, therefore, be taken seriously by implant manufacturers. Customers expect basic technical cybersecurity features such as encryption and/or authentication protocols as well as proactive post-market monitoring of device activity and access events. Rapid reporting of identified security flaws and release of security patches are key in limiting cyberattacks. Close collaboration with hospitals to adapt products to their cybersecurity requirements will be important for building trust between stakeholders.