The past few years have certainly been a whirlwind for the healthcare industry, as well as medtech and life sciences businesses alike. Between the settling of the spark caused by the Covid-19 pandemic, followed by its stabilization, and subsequent growth, this industry is projected to continue its boom, albeit on a smaller scale than the one experienced between 2019 and 2020. Now, as we wait to see how major developments in key tech sectors such as robotics and artificial intelligence evolve the industry, we are delighted to expect greater growth in 2024 than in 2023.

Still, companies who want to ride this wave must be poised to handle difficult setbacks and prioritize business decisions that retain competitive positions. Perhaps the most important part is to have operations set up and managed in the right way to avoid risks and unnecessary costs in the first place. However, it can be particularly difficult for foreign companies to break into the US market, and navigate these unfamiliar territories without the help of an expert on the ground.

As Founder and CEO of Preferred Depot, the premier white label operations management and consulting partner for healthcare, medical, and technology startups launching or growing in the US, I have built my career out of paving the way for companies from around the globe as they expand to or within the states. So, to help you start this year off on the right course, I am sharing my outlook for the state of the US medtech and life sciences industry in 2024. Let’s get started!

Demand

Let’s kick off this discussion with what any entrepreneur in the medtech and life sciences industry wants to hear: the demand for medical technology is in fact expected to rise through 2024. This means that it is a good time to break into the industry, take advantage of the pivotal moment in innovation, and expand in the US. According to Statista, the market in the US is expected to continue to grow by nearly 6% in 2024. Even more, the US is expected to generate the highest revenue in comparison to other countries. According to Medical Device and Diagnostic Industry, this is especially true on the west coast, or the hub of innovation. California is widely considered the top state for medtech and life science in 2024. In particular, Silicon Valley, Orange County, and San Diego, California are hot spots to watch out for.

Financials

With demand still intact, many might expect investments and funding to be on a high as well. This is true — in part. For companies looking to expand in the United States, the best location when it comes to funding is clear. According to Medical Device and Diagnostic Industry, the most venture capitalist funding is by far in California, having significantly more venture capital funding for this industry than any other state. As funding has declined in 2023 in comparison to previous years, close proximity to investors make California the best place in 2024 to foster the right connections and ultimately lock down investors.

Compliance and Regulatory

The regulatory landscape and policy implications going into 2024 are as rigid as ever, especially when it comes to healthcare regulatory compliance in the post pandemic era — and we don’t expect this trend to let up. According to the FDA, a number of proposals are up for consideration in 2024 which could potentially affect things like supply chain accountability and transparency, information disclosure, and device shortage prevention. In the event that these or other changes are passed, companies should be ready to provide increasing levels of transparency about their processes. Medtech businesses also need to be aware of hospitals’ VAC, or value analysis committees, in place to assess new technology and select products that offer the best quality of care at the lowest costs. Companies should be prepared to provide evidence of safety and increased transparency about various businesses.

It’s essential for every business, prior to entering the US market, to register with the appropriate state and federal agencies, be they the Food and Drug Administration (FDA), the International Organization for Standardization (ISO), or other authority; as well as to obtain the proper licensing needed for their business. This process, along with being almost prohibitively expensive, also requires organizations to employ or outsource an expert to obtain and maintain these licenses and certifications — ISO alone requires up to 2 audits a year.

Supply Chain

In the previous years, conflicts around the world have had a massive impact on the supply chain. While we can’t entirely predict what is to come, ongoing conflicts are expected to continue to cause challenges with the medical device supply chain. This means that it is more important than ever to have a solid, independent third party logistics plan. Even more, to keep their edge, businesses will need the flexibility and forethought to smoothly pivot when necessary. While storage should not be much of a problem, distribution is heavily dependent on the state of affairs of wherever a particular business runs their operations. In many cases, this could be all around the world. This means it is crucial to have an above board system with customs while also maintaining a cost-effective storage and distribution process that works for your business.

Support

In 2024, nailing the customer experience is more important than ever. While customer support might be the first aspect of service that comes to mind, tech support is no less crucial. As the industry grows there are more options for consumers and businesses looking to purchase the most convenient and effective medtech products. Medtech providers need to be prepared to offer the support their customers need, both with their purchasing experience and using the product too. As tech gets more advanced in 2024, it is essential to have tech support personnel that truly get the products and the customers too.

Complexity

With all of these factors in mind, it is clear that there is a high level of complexity involved in breaking into, or growing within, the US market as a medtech or life sciences company. The good news is that it is still a great time to expand in the US market. However, it might get more challenging to do it the right way by retaining compliance and keeping costs as low as possible to help your business thrive. Plus, the expectation for foreign companies is even more to tackle. Companies must keep in mind that there might be unforeseen challenges with each of these factors that can create potentially detrimental roadblocks for their expansion. Knowing how to do things the right way with the help of a healthcare operations management team and trusted operations consulting can often be essential to mitigating risks and protecting your business.

At Preferred Depot, we know just how important the state of an industry in a particular place and time can be on your company’s success with expansion. As we ease into a new year it’s important to note that the outlook is bright. Although it is complex, it is absolutely possible to break in with the right team. Preferred Depot is the ideal solution to offer your team an operations partner that knows the ropes. To learn more about how our skilled operations management team can help your company expand in the US market, visit us at https://www.preferreddepot.com/.

Sources:

https://www.statista.com/outlook/hmo/medical-technology/united-states 

https://qmed.com/44/resourcefile/05/98/09/Top-US-Medtech-States-1.pdf 

https://www.fda.gov/media/166049/download#:~:text=The%20proposals%20include%20enhanced%20authorities,activities%20when%20inspections%20are%20not