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Listen, as he shares important highlights on the state of the industry.
Reigniting Growth and Expanding Markets in Medical Technology
The 19th annual Pulse of the MedTech Industry Report finds the medical technology (MedTech) industry remains in good health. For the first time since 2024, the industry’s annual revenues reached nearly US$600 billion, and commercial leaders are on track to achieve revenue growth of 6-7% again in 2025.
While MedTech companies continue to be a success story from a high-level view, closer examination reveals a more complex picture. This year’s Pulse of the MedTech Industry Report highlights the traits that increasingly distinguish the leaders in this sector and seeks to understand the strategies that drive MedTech company success today — all aimed at reigniting growth and expanding markets.
1. Innovation alone isn't enough: the MedTech industry must prove its right to grow
Markets are not solely interested in growth, but whether MedTech companies have earned the "right to grow" through healthy margins and a resulting strong balance sheet.
Between 2024 and 2025, Wall Street has tended to reward MedTech companies that have demonstrated the ability to effectively deploy capital in R&D and M&A ... because those companies have outperformed the broader MedTech industry TSR.
84% of life sciences CEOs expect investors to increasingly hold companies accountable for the return on investment of their capital allocation strategies.
Source: EY-Parthenon CEO Outlook Survey
2. Key strategies to maintaining the pace on high-growth acquisitions
Value-creation increasingly hinges on one core formula: sustained revenue growth fueled by innovation and strategically executed MedTech M&A, such as how they integrated and preserved innovation value from the acquired company.
In 2024, there were only 61 MedTech M&A deals, compared with 184 in 2023.
But value increased to US$50.5 billion in 2024, compared with $44.2 billion in 2023.
Source: EY analysis, Capital IQ and Thomson One.
3. Structure for success: how MedTech companies are gaining an edge through BU models
Without the right operating model, MedTech companies risk failing to realize the full potential of their growth-driving assets, leading to discounted growth prospects.
Key metrics increasingly confirm that, for many MedTech companies in this space, this specific operating model clearly outperformed others ... An operating model organized around business units (the BU model), functioning as autonomous businesses, outperforms a regionally-organized model.
Over the past three years, evidence from the leading 25 MedTech companies indicates a distinct performance advantage for BU model companies ... as measured by average market cap growth, revenue growth, and earnings before interest and taxes (EBIT) growth.
MedTech companies should consider rethinking manufacturing footprints, pursuing M&A to gain strategic capacity in key regions, and re-evaluating organizational structures.
Several MedTech companies are exploring the creation of a cross-functional, tariff task force and governance structure.
MedTech companies are struggling to establish a strategy and adapt to the rapidly evolving global business environment that has dominated the last year, due to high levels of uncertainty around trade, tariffs, and geopolitical circumstances.
5. How AI and new technologies are reimagining MedTech supply chains
As they plan for the future, MedTech companies need to conform with global trends towards nonlinearity, acceleration, volatility, and interconnectedness - traits that define what is characterized as the “NAVI” future.
84% of life sciences CEOs agree that “to optimize the impact of MedTech AI, we need to focus on data quality and integration rather than new tools.”
MedTech companies must leverage data and AI to reimagine their supply chains. By placing technology at the center, crafting innovative strategies that emphasize agility and flexibility throughout the supply chain.
