EY – Medtech Report, 2023

EY's 17th annual Pulse of the Industry report on the medical technology (medtech) sector highlights a time of uncertainty and change. The industry has experienced strong performance in recent years due to the COVID-19 pandemic, driving the demand for new non-imaging diagnostics and research equipment. However, early signs of more challenging conditions have emerged, including a decrease in mergers and acquisitions (M&A) and public market valuations, as well as a decline in overall industry financing. The disappearance of special-purpose acquisition company (SPAC) deals, a significant decrease in initial public offerings (IPOs), and a drop in venture capital (VC) funding have contributed to this financing slump. In the past year, these challenges have intensified with geopolitical upheaval, slow recovery in commercial and supply chain disruption, changing regulatory environments, and global inflation adding to the uncertainty. Questions have also arisen about the impact of GLP-1 therapies on the medtech sector in the long term. However, despite these challenges, the aging global population and the increase in underserved chronic disease patients provide a strong foundation for long-term growth. The digitalization of the industry, particularly advancements in data analytics and artificial intelligence (AI), opens up new possibilities for the future of medtech. This convergence of technological advances and the demand for personalized and flexible healthcare has led to the concept of the intelligent health ecosystem (IHE), which will be further explored in the report. Overall, the medtech industry has experienced a reset, returning to pre-pandemic norms, but is now faced with key strategic decisions in response to the shifting forces and opportunities in the sector.