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May 04, 2021 03:13 PM

Freudenberg Medical CEO: Sustainability, technology defining post-COVID medical device industry

Erin Pustay Beaven
Rubber & Plastics News Staff
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    CUYAHOGA FALLS, Ohio—Transformation is inevitable.

    Given all the world has been through in the last year, and given the ways in which technology is changing consumer lifestyles and expectations, it's inevitable that the medical device industry would change, too.

    During a keynote presentation that kicked off Rubber & Plastics News' Healthcare Elastomers Conference, Max Kley, CEO and president of Freudenberg Medical, explored some of the trends that are driving the industry forward through a decade that began with a global pandemic.

    Trends that traditionally have driven growth throughout the medical device industry remain at the core of the market today. The growing, aging world population is pushing suppliers and manufacturers to find new solutions to support quality and longevity of life.

    But in the wake of a transformative global pandemic, other trends are emerging. Sustainability, innovation and technology will be driving forces behind the industry in the years ahead.

    Sustainability in the medical sector looks different than other end markets because patient safety is the core issue that dictates the feasibility of reusable devices and components. In many cases, Kley said, the FDA is encouraging the use of single-use devices.

    While this approach is not environmentally sustainable on the surface, sustainability of medical devices are built in the manufacturing processes. How you make a device or material becomes the critical sustainability approach.

    "There is still a strong trend toward single-use devices," Kley said, noting he doesn't think that will change. "On the other hand, our customers are asking us for more sustainable solutions and are asking us how do we manufacture their devices? Are we using renewable energy?

    "I think the medical device industry is trending in this direction. When it comes to materials, this is a trend that will certainly play out. Materials that may use less energy to be manufactured or use less-hazardous ingredients will have an edge in the marketplace."

    The U.S. remains the largest market for medical devices, accounting for about 40-45 percent of the overall market share, and it is worth about $173 billion annually. Europe and Japan follow the U.S., with market shares worth about $114 billion and $30 billion, respectively.

    All of these markets are set to grow as well. The compound annual growth rates for all three hovers around 4.5 percent.

    Max Kley

    When it comes to growth, however, China's market is poised to expand most quickly, with a CAGR of around 10 percent.

    In the years ahead, Kley expects the medical device manufacturing industry to experience a significant amount of M&A activity. Globally, medical device manufacturers are looking to streamline and simplify supply chains. Part of that involves reducing the number of suppliers.

    "There is not one of our major customers that is saying they do not want to reduce their number of suppliers," Kley said. "… (This is) playing out all over the industry, and it favors global organizations. It favors organization that have the necessary critical mass to keep pace with demand."

    As suppliers look to diversify their offerings and expertise or expand their reach in strong and growing regions, it's likely, Kley said, that M&A will play a key role in helping to achieve those aims.

    And given the pace of innovation, it is likely that there will be plenty of opportunities to expand capabilities and technologies.

    Technological advancements are driving the development of medical devices, particularly as connected medicine and telemedicine become more popular. This puts the medical devices in the hands of patients who likely will use their smartphones for diagnostics and testing.

    This trend is, in some ways, redefining what a medical device is, adding software to the long list of products manufactured for the sector.

    Software also will be important for clinicians and hospitals, as they move further toward digitalization of patient records, scheduling and billing.

    "You have this whole microcosm of start-ups and small- and medium-sized companies that are inventing new technologies and bringing them to the market," Kley said.

    Manufacturers, meanwhile, are committed to expanding the capabilities of their devices, particularly on the digital end. This creates new challenges for suppliers and manufacturers who look to include conductive materials in their products.

    "New materials are coming to the market, conductive materials," Kley said. "You need materials that can cure at lower temperatures. We also have to look at new processes. … This is something that keeps us busy in the moment."

    The COVID-19 pandemic had a temporary impact on the innovation of both traditional and software-based medical devices, with investments in research and development dropping off last year during the global slowdowns.

    There are signs that those investments are picking back up, and Kley expects to see companies continue to make innovative strides.

    The FDA issued a record number of emergency use authorization approvals in 2020, but this has created a backlog of device approvals that could take a while to sort through.

    Related Article
    Healthcare Elastomers Conference opens Tuesday, registration still available
    Freudenberg Medical opens new HQ and expanded facility in Massachusetts
    Freudenberg develops new technology for measuring silicone tubes
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