- The number of medtech start-ups has dropped by nearly two-thirds since the late 1970s amid regulatory, payment, and other challenges, according to a report released this week by AdvaMed.
- The number of medical device firms created each year shrank from 1,500 more than three decades ago to about 600 in 2012.
- Early-stage venture investment has also fallen off, with the medical technology industry receiving just 3% of available dollars in 2014, compared with 10% in 1993.
At the trade group’s annual meeting this week in Minneapolis, incoming AdvaMed board chairman Nadim Yared, chief executive at CVRx, called the trends “particularly troubling” as young engineers and other talent opt for jobs in less-regulated industries, Forbes reports.
AdvaMed based the report on a series of roundtables with entrepreneurs and early-stage investors in the medtech field. More than half of U.S. device firms are at least 16 years and one-third are 25 years or older, a sign of a “mature rather than a dynamic industry,” the report notes.
The industry says regulatory changes to speed up FDA approval and Medicare coverage could help to reverse the downward trend. It also seeks repeal of the 2.3% medical device excise tax imposed by the ACA, saying it dampens investment in start-ups.
On the other hand, recent StartUp Health report pegged the total invested in digital health ventures this year at $64 billion, putting the sector on track for a record funding year.
Projections by Rock Health are more muted, with a recent report saying $3.3 billion in funding has been spread across 233 digital health start-ups so far this year.