Despite such potential upcoming challenges as cost-cutting trends, the impending U.S. medical device tax, and austerity programs in several major healthcare markets, the global medical device market is predicted to grow from $322 billion in 2011 to $415 billion in 2016, according to a new report by healthcare market research publisher Kalorama Information. "The Global Market for Medical Devices, 3rd Edition," examines the current medical device market in addition to evaluating the potential impact of major obstacles for the industry as well as the revenues and activity of several market-leading medical device manufacturers.

"2011 was a year of cost control," according to Bruce Carlson, publisher of Kalorama Information. "Governments implemented policies unfavorable to medical device makers and hospitals took steps to reduce device pricing. These trends are likely to continue." In the face of a troubled economy and challenging business environment, however, the medical device industry managed to experience 5% growth between 2010 and 2011, according to the report. Among the key drivers of this modest increase were the substantial aging population, the development of innovative technologies, and sales to emerging markets.

Increased sales to emerging markets during the next several years, in fact, are expected to help offset some of the anticipated cutbacks in major developed healthcare markets. And while the United States remains the largest medical device market, coming in at $142 billion in sales, companies' sales outside the country edged out domestic sales. European medical device sales, on the other hand, account for approximately 29% of the market and are bolstered by what is viewed as an easier regulatory environment in which to launch new products.

Market-leading 'bellwether' companies in the medical device sector exhibited several interesting trends in 2011, the report found. For example, major medical device companies increased R&D spending by 8% in 2011, on average. "It's an indication of long-term optimism and a signal that the strategy is to find new products and product innovations in order to get around the lower reimbursements," Carlson comments. Furthermore, dominant companies such as Johnson & Johnson, Medtronic, and Siemens experienced growth at lower levels in 2011 than the medical device market as a whole, the report states. Many medical device powerhouses, the report notes, also maintained aggressive acquisition strategies in 2011, led by J&J's purchase of Synthes.