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Press release
19 Oct 2026
EY Pulse of the MedTech Industry Report 2026: Blockbuster performers and innovation drive record MedTech industry growth
Broader MedTech industry at turning point, seeking positioning to optimize portfolios, differentiate technology and improve R&D
- Innovation drives increased dealmaking and R&D investment: MedTech saw a resurgence in deal size with M&A value up 160% in the first half of 2026 vs. the same period in 2025, reflecting investments in next-generation technologies, including AI-enabled diagnostics, robotics, structural heart, diabetes care and minimally invasive therapies.
- AI is reshaping the future of value creation: AI integration in MedTech is unlocking new business opportunities and scalable value creation, alongside a record and growing number of FDA-authorized AI-enabled devices.
- Industry growth is expanding into alternative care settings: MedTech is increasingly moving beyond traditional care settings and capturing growth in alternative care markets, particularly the rapidly expanding ambulatory surgery center (ASC) market and direct to consumer/patient.
NEW YORK, October 19, 2026 – The 20th edition of the Ernst & Young LLP (EY US) Pulse of the MedTech Industry report finds that the global medical technology (MedTech) industry is at a turning point. Following a period of record-setting growth and investment across the US and Europe, the sector finds itself at a revenue high point, even amid challenges, including negative investor sentiment and persistent global trade and supply chain uncertainties.
Despite a challenging operating environment, the MedTech industry saw sustained growth in 2025, reaching approximately US$650 billion in revenue and representing growth of 11%, and continued to demonstrate top-line performance in the first half of 2026, generating $325 billion in revenue, a 7.1% increase compared with the same time period in 2025. Therapeutic devices led industry growth, followed by non-imaging diagnostic, imaging, and lab equipment and tools. However, growth was highly concentrated among commercial leaders, highlighting a widening performance gap across the industry.
“MedTech has rebounded from YTD June lows and has underperformed the broader markets in 2026. The sector has continued to demonstrate resiliency, with record revenue financing and strong M&A activity setting the stage for a bright future,” says John Babitt, EY Global MedTech Leader. “The broader sector players are at a turning point where discipline is essential to convert innovation into profitable growth.”
Other key findings include:
- MedTech financing reached a record US$63 billion for the year ended June 30, 2026, up 87% year over year – the highest seen in the last decade. Together, initial public offerings and debt accounted for around 80% of total capital raised, indicating that recovery has been driven primarily by public-market reopening and strategic balance sheet financing rather than broad-based funding strength.
- MedTech M&A reached its highest level in more than a decade, with total disclosed deal value surging to roughly US$130 billion. However, this recovery was driven by a limited number of blockbuster transactions.
- Innovation remains at the core of MedTech’s heartbeat, with growth largely driven by a breakout group of high-performing, high-differentiation, high-innovation strategic leaders. Companies that delivered both high R&D productivity and EBIT margin expansion generated an average total shareholder return of approximately 13.8%.
- AI in MedTech is observing a transformation, with intelligence being deeply embedded into devices and the care pathways around them. Hardware design, clinical evidence and manufacturing quality will remain fundamental and are increasingly being complemented by the quality of the algorithms, data and digital services surrounding the product.
- Venture capital fundraising remained resilient in 2026, with overall activity skewed toward earlier-stage innovation, highlighting improved investment activity and continued investor conviction in differentiated technologies addressing significant unmet clinical needs.
“MedTech is entering a new era of growth, and today’s challenges are the catalyst for the industry’s next transformations,” says Diana Hoff, EY Americas Life Sciences Sector Leader. “As companies navigate margin pressure, supply chain risk and global trade uncertainty, the leaders of the next decade will be those that embrace AI, make more deliberate portfolio choices and build productive, resilient operating models that turn innovation into sustained growth and value.”
Looking ahead, MedTechs that maintain innovation while also building conviction across capital allocation and portfolio optimization will be best positioned to set the pace of the pulse of the industry in the years to come.
To read Pulse of the MedTech Industry, please visit https://www.ey.com/en_us/life-sciences/pulse-of-medtech-industry-outlook
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