Employing more than 20,000 people and generating more than $10 billion of annual economic output, the medical device industry in Indiana is one of the state’s most valuable economic assets, according to a new report from BioCrossroads (Indianapolis). The first report of its kind, "From Hearts to Hips: Indiana’s Leadership in Medical Devices," was compiled by FaegreBD Consulting and BioCrossroads to highlight the sector and identify upcoming challenges.

With the fifth largest percentage of medical technology employees in the United States, Indiana's medical device sector accounts for more than 40% of the jobs in the state’s life sciences industry. In 2010, the state’s medical device companies manufactured more than $2 billion worth of exports, or approximately $100,000 per employee. The average employee earns $60,000 annually, more than 56% higher than the state’s average private sector worker.

“From small towns to larger cities, the economic impact of the medical devices industry is significant and is well-distributed throughout the state,” notes David Johnson, president and CEO of BioCrossroads. According to the report, the geographic diversity of the sector ranges from Warsaw and Indianapolis to Bloomington, Spencer, and West Lafayette.

In addition to its relative size, Indiana’s medical device sector is highly diversified, offering a spectrum of products used throughout the world. Major companies such as Biomet, Boston Scientific, Cook Medical, DePuy, Medtronic, Roche Diagnostics, and Zimmer are either headquartered or maintain major operations in the state and develop a variety of medical products, from cardiovascular and urological to diagnostic and orthopedic devices.

“This report is proof that Indiana’s medical devices sector is robust and resides on a solid foundation that positions us well for future growth,” Johnson remarks. “There are still many external factors like the economic, regulatory, and healthcare reform environment that pose real challenges for this industry.”

In addition to the current economic conditions, which have lowered the demand for some medical devices, the industry faces even bigger challenges in the next decade, including a rapidly changing health care market, tax policies that discourage innovation, increasing regulatory uncertainty, a shift to overseas production and expansion to overseas markets, technological changes requiring that workers receive more education, and an increasingly competitive global market.

“Indiana’s medical device industry is a cornerstone to the state’s life sciences sector and the state’s economy overall,” says Dave Zook, chair of FaegreBD Consulting. “There are several looming challenges that, if unaddressed, will significantly weaken the industry and the state’s economy.”

To read more about the state's crucial orthopedic device sector, check out "Indiana's Medical Device Mecca Has Good Bones."