The medical device industry makes an enormous number of products— ranging from surgical gloves to artificial joints to imaging equipment—and plays a crucial role in developing new medical technologies that can improve the ability to diagnose and treat illness. The industry has a relatively small number of large, diversified companies and a large number of smaller companies that are mainly engaged in research and development of new devices for specific therapeutic areas. The industry is distinctive both for its tendencies to make frequent, incremental changes to its products and its extensive ties with physicians.
The market dynamics for medical devices can vary greatly depending on the device. Markets for conventional devices such as surgical gloves and other routine surgical supplies are more competitive; companies compete heavily on price and often need high sales volumes to be profitable.
Because of the wide range of items that can be considered medical devices, there is no standard way of defining the medical device industry, and estimates of its overall size vary.
International trade also plays a significant role in the medical device industry. Between 35 percent and 40 percent of domestic U.S. production is ultimately exported, and a similar share of domestic U.S. consumption is imported. The largest export markets for U.S. medical device companies have traditionally been the countries of the European Union and Japan. The United States is the largest single market for medical devices and accounts for about 40 percent of worldwide sales.