Diving into 2025

The MedTech industry has demonstrated resilience and innovation in the face of a global pandemic and economic fluctuations. With remarkable agility, it has adapted to meet the changing needs of healthcare providers and patients, setting the stage for continued transformation in healthcare delivery in the year ahead.

As we move into 2025, the MedTech industry stands at a crossroads, poised to capitalize on the achievements and lessons of 2024. With the healthcare ecosystem undergoing rapid transformation, the sector faces both opportunities and challenges, driven by rising cost pressures, empowered patients, evolving care settings, and the relentless pace of technological disruption. In response, MedTech companies are reshaping their strategies, rethinking traditional business models, and reimagining how they compete in established markets while unlocking new opportunities.

In the past year, we have seen companies streamline operations, divest non-core assets, and reinvest in emerging technologies, such as artificial intelligence (AI) and connected devices. These moves reflect a broader trend toward building capabilities that not only meet current demands but also prepare for future growth. The emphasis on innovation and agility is redefining the competitive landscape, where success hinges on a company’s ability to deliver value-driven outcomes and improve patient care.

Some of the MedTech trends to watch in 2025
Integration of AI in healthcare will play a critical role, enhancing diagnostics, personalizing treatment, and streamlining administrative tasks. Its ability to analyze vast data sets will enable early disease detection and tailored care, improving patient outcomes. Additionally, AI-driven automation will boost efficiency, allowing physicians to focus more on patient care.

Hyper-personalized medicine based on genetics, lifestyle, and environment, enhancing precision and effectiveness. Innovations like CRISPR and real-time health data from wearables enable proactive care and targeted therapies. By 2025, these advancements will revolutionize patient outcomes and treatment strategies.

Predictive analytics will optimize hospital resources, streamline workflows, and enhance patient experiences. Proactively identifying health risks through data patterns will enable early interventions, shifting focus from treatment to prevention.

Blood testing will become faster, less invasive, and more accurate. Microfluidic technology enables multiple tests from a single drop, enhancing diagnosis speed and patient comfort. Advanced point-of-care devices will expand access to timely testing, especially in remote areas.

Virtual healthcare assistants will offer 24/7 support, handling tasks like scheduling and medication reminders. They provide personalized health advice, empowering patients to manage chronic conditions proactively. For providers, these AI-driven tools reduce administrative work, enhancing efficiency and patient care.

The future of telemedicine will be integral to healthcare, offering patients convenient virtual consultations and expanded access to specialists, especially in remote areas by 2025. It ensures equitable care and flexibility in meeting patient needs. Continuous patient monitoring through telehealth will enhance engagement and improve outcomes.

Wearable technology and IoT will offer advanced insights into patient health, enabling continuous monitoring and real-time alerts. Internet of Things (IoT) connectivity allows seamless data transfer between patients and healthcare providers, enhancing timely interventions. This technology empowers healthcare professionals with valuable data to personalize treatment and improve outcomes.

3D printing will revolutionize healthcare with custom implants tailored to patients’ anatomy, improving outcomes and recovery times. 3D-printed organ models will enhance surgical planning, reducing risks and improving precision. This technology is transforming medical practices, enhancing patient safety and satisfaction.

Value-base procurement and sustainability initiatives
The Asia-Pacific (APAC) region faces unique challenges in the medical devices industry due to diverse regulatory requirements, official languages, and country-specific labeling standards. Overcrowded paper labels and frequent regulatory changes disrupt supply chains, leading to product shortages. Adopting electronic labels (e-Labels) and electronic instructions for use (e-IFUs) offers a solution, providing digital, accessible product information while improving operational efficiency and aligning with sustainability goals.

Sustainability has become a critical focus in the MedTech sector due to concerns about climate change, resource scarcity, and social inequality. Regulations, such as Germany’s Supply Chain Act and the EU’s Medical Devices Regulation (MDR), and In Vitro Diagnostic Regulation (IVDR) are driving companies to innovate with environmentally friendly products, optimize production processes, and promote reusable or biodegradable medical devices. This approach integrates environmental, social, and governance (ESG) principles and corporate social responsibility (CSR), ensuring resource efficiency, social responsibility, and accessibility while reducing health inequalities.

Recycling, resource reduction, and sustainable supply chains are emerging practices in MedTech. Despite challenges, such as balancing safety with environmental goals, the adoption of these practices offers long-term benefits, including reduced waste and improved efficiency. Companies investing in sustainable supply chains can mitigate risks, enhance brand value, and stay competitive. As hospitals are increasingly tasked with reducing their environmental impact, the MedTech sector has a key role to play in providing sustainable solutions that benefit both patients and the planet.

Sustainability in medical devices manufacturing is rapidly evolving as the industry adopts green practices to reduce carbon footprints and align with global climate goals. Companies like Cardinal Health are leading initiatives focused on eco-friendly solutions, emphasizing the reuse and reprocessing of devices to minimize waste while achieving cost efficiency. Their Sustainable Technologies™ reprocessing business exemplifies how circular economies can create win-win outcomes by balancing environmental impact with financial savings.

Efforts to localize manufacturing further enhance sustainability. For instance, India’s push for domestic production reduces import dependency and transportation-related emissions while fostering innovation through shared infrastructure and skill development programs. These initiatives lower the carbon footprint and align with global climate goals.

Collaboration across the MedTech ecosystem is vital for achieving sustainability objectives. Events like FICCI HEAL 2024 underline the importance of interdisciplinary partnerships and regulatory reforms. By adopting green manufacturing strategies and strengthening partnerships, the MedTech sector not only advances environmental stewardship but also reinforces its competitive position in global markets.

MedTech R&D investments
The MedTech industry is poised for significant expansion by 2025, driven by strategic R&D investments that foster innovation and value creation. Unlike pharma, which often invests heavily without guaranteed returns, MedTech companies maintain focused R&D intensity, typically around 9–10 percent of revenue. This measured approach, coupled with operational efficiency, consistently yields high patent output and FDA approvals, fuelling growth and technological advancement.

Key R&D areas include cardiology, neurology, and AI-driven technologies. In cardiology, innovations, such as implant miniaturization and remote monitoring, are expected to revolutionize patient care. Companies like Medtronic and Boston Scientific are leading the charge, prioritizing minimally invasive devices and smart implants. Neurology R&D efforts focus on brain stimulation and wearable monitors, enabling early detection and intervention for conditions like epilepsy and Parkinson’s disease.

Beyond product innovation, MedTech firms are adopting digital tools like generative AI to streamline R&D processes and improve productivity. AI-driven insights help optimize clinical trials, enhance design efficiency, and accelerate time-to-market for new devices. Companies are also reshaping portfolios through strategic mergers and acquisitions (M&A), expanding into emerging markets and unlocking dormant value in underutilized assets.

By maintaining disciplined R&D spending, leveraging digital technologies, and focusing on high-impact innovations, MedTech companies are well-positioned to drive transformative growth and improve patient outcomes in 2025 and beyond.

Digitization and the XaaS revolution
The MedTech industry is undergoing a paradigm shift driven by digitization and the rise of everything-as-a-service (XaaS) models. Digital transformation is reshaping operational frameworks, enabling companies to enhance efficiency, reduce costs, and improve patient outcomes. Automation tools powered by AI are streamlining processes, such as sales, billing, and pricing, helping organizations achieve real-time data insights and operational agility. Moreover, cloud-based platforms facilitate seamless data sharing and storage, ensuring better collaboration across healthcare ecosystems.

XaaS models, including pay-per-use, subscription services, and managed solutions, are gaining momentum as MedTech companies move beyond traditional product sales. These models align with the growing demand for cost-effective and scalable healthcare solutions. In a XaaS framework, customers pay for access to services rather than owning expensive equipment, creating a more flexible and predictable cost structure. This shift requires comprehensive changes in pricing strategies, contract management, and customer engagement. Subscription-based services, for example, allow hospitals and clinics to access cutting-edge technologies without the burden of capital expenditures, fostering broader adoption of innovative tools.

Digital tools, such as telehealth platforms and remote monitoring devices, enable providers to deliver care beyond hospital walls, empowering patients to manage their health more effectively. Wearable devices and AI-driven diagnostics further personalize treatments, aligning with value-based care goals. However, the success of digitization and XaaS adoption hinges on overcoming challenges related to data privacy, cybersecurity, and regulatory compliance.

As the MedTech industry embraces these transformative models, companies must foster agility and innovation, focusing on strategic partnerships and technology integration.

MedTech 2.0 – The role of industry 4.0
The MedTech industry is on the brink of a revolution, driven by the transformative power of industry 4.0 technologies. As healthcare evolves to become more patient-centric, MedTech 2.0 leverages advanced tools like IoT, AI, machine learning (ML), and data analytics to redefine medical devices manufacturing, diagnostics, and care delivery. These technologies are enhancing efficiency, precision, and personalization in unprecedented ways.

Smart manufacturing processes, powered by IoT and AI, enable real-time monitoring, predictive maintenance, and quality control, resulting in faster production cycles and reduced downtime. 3D printing and additive manufacturing have also unlocked the potential for customized medical devices tailored to individual patient needs, reducing costs and improving outcomes. These advancements not only streamline operations but also foster innovation in device design and functionality.

Industry 4.0 also plays a pivotal role in sustainability and regulatory compliance. Blockchain technology ensures traceability across supply chains, enhancing transparency and ethical sourcing. AI-driven systems optimize resource usage, minimizing waste and energy consumption, aligning with environmental, social, and governance (ESG) goals. This dual focus on efficiency and sustainability positions MedTech companies to meet increasingly stringent regulatory requirements while driving positive societal impact.

For MedTech companies to thrive in this new era, strategic investment in digital skills, flexible business models, and innovative technologies is essential. By embracing Industry 4.0, MedTech 2.0 can deliver cutting-edge solutions that are scalable, sustainable, and responsive to evolving healthcare needs.

APAC and SEA – Growth opportunities in 2025
The APAC region is poised for significant MedTech expansion, with its market projected to reach USD 140 billion by 2025. This growth is driven by rising demand for personalized healthcare, digital innovations, economic development, and demographic shifts. As the region accounts for 60 percent of the global population, its evolving healthcare landscape offers immense opportunities. Key drivers include the increasing adoption of telehealth, AI-powered diagnostics, and robotic-assisted procedures, particularly in major markets like China, Japan, and India.

China stands out with its emphasis on domestic innovation, supported by policies like volume-based procurement (VBP), which prioritize cost-efficiency and local production. Surgical robotics and AI technologies are at the forefront of China’s healthcare transformation.

Similarly, Japan is advancing in precision-driven robotic surgeries, ensuring minimally invasive solutions for patients. Meanwhile, India’s focus on local manufacturing, bolstered by initiatives, such as the National Medical Devices Policy and Make in India, is accelerating growth in the MedTech sector.

Southeast Asia, encompassing emerging markets like Indonesia and Vietnam, presents significant opportunities due to increasing healthcare budgets and expanding access to medical services. Economic growth and a burgeoning middle-class further drive demand for advanced medical technologies. However, navigating the complex regulatory landscape is critical for success. Efforts to harmonize regional regulations, localization strategies, and resilient supply chains are essential for MedTech companies aiming to thrive.

Despite macroeconomic challenges, private equity investment in the MedTech sector remains robust, highlighting the industry’s resilience and growth potential. To capitalize on these opportunities, MedTech firms must prioritize innovation, regulatory compliance, and digital infrastructure, positioning themselves to unlock the full potential of the APAC and Southeast Asian markets by 2025.

India’s ascendancy in global MedTech
India is rapidly ascending as a global MedTech powerhouse, currently ranked as the fourth-largest market in Asia and among the top 20 worldwide. The sector is poised for robust growth, projected to expand from ₹99,600 crore in 2023 to ₹4.15 lakh crore by 2030, achieving a remarkable CAGR of 20.1 percent. This surge is driven by a combination of rising non-communicable diseases, an aging population, and an increasing emphasis on preventive healthcare. A supportive ecosystem, bolstered by government initiatives, such as the National Health Mission (NHM), the Production Linked Incentive (PLI) scheme, and the National Medical Devices Policy 2023, is fostering local manufacturing and innovation, reducing dependence on imports.

Technological advancements are revolutionizing the industry, with innovations in low-cost diagnostics, telemedicine, wearable devices, and surgical robotics transforming healthcare delivery. Start-ups are at the forefront of this innovation, with 79 percent of new MedTech solutions focusing on digital integration through technologies like AI, IoT, and cloud computing. These advancements not only improve healthcare access domestically but also position India as a global exporter of affordable, cutting-edge solutions.

Despite facing challenges, such as regulatory complexities and supply chain constraints, India’s MedTech sector presents significant opportunities. Increased R&D investments, strategic collaborations, and partnerships with international companies are driving technology transfer and innovation. Global Capability Centers (GCCs) and public-private partnerships are further enhancing the ecosystem, fostering knowledge exchange and capability building.

The future success of India’s MedTech industry will depend on its ability to embrace digital transformation, implement regulatory reforms, and cultivate a skilled workforce. By leveraging these strengths, India is well-positioned to redefine global healthcare, revolutionize patient outcomes, and solidify its role as a leader in the MedTech landscape by 2030.

Strengthening domestic manufacturing
The recently-introduced ₹500 crore scheme for the medical devices industry by the Indian government is critical to strengthening domestic manufacturing and reducing reliance on imports. The comprehensive scheme targets five key areas – manufacturing of components and accessories, skill development, clinical studies support, infrastructure development, and industry promotion. This initiative aims to boost the medical devices sector, which plays a pivotal role in healthcare delivery in India.

The importance of self-reliance in medical devices became starkly apparent during the Covid-19 pandemic, highlighting India’s dependence on imports for essential medical kits, ventilators, masks, and PPE. Experts argue that while the initial budget may seem modest, it is a significant motivator for the industry, setting the foundation for future growth.

The Indian medical devices market, is expected to grow to ₹2.5 lakh crore by 2030. Enhanced domestic manufacturing capabilities will drive this growth as companies are encouraged to innovate and reduce reliance on imports. The new scheme aligns with efforts to address the country’s historical dependency on foreign suppliers for high-end medical devices, such as diagnostic machines and imaging equipment. India currently imports around 80 percent of its medical devices, especially sophisticated machinery used for cancer diagnostics and imaging, which remains a challenge for the healthcare sector.

The government’s scheme includes multiple sub-schemes aimed at developing medical devices clusters, building manufacturing capacity, and facilitating clinical studies. This will not only foster a more robust local supply chain but also spur innovation by providing manufacturers with the necessary infrastructure and resources to meet the growing demand. Additionally, the scheme supports capacity building for medical devices skill development, a critical component in bridging the gap between available technology and skilled personnel.

Different MedTech companies are already leading the way by designing and manufacturing high-quality medical devices suited to domestic and international markets. These companies increasingly focus on innovation to meet local healthcare needs and global standards. These companies contribute to the country’s shift toward greater self-sufficiency by leveraging new technologies and improving production capabilities. The government’s regulatory reforms, such as the Medical Devices Rules and the Production Linked Incentive (PLI) Scheme, also play a pivotal role in facilitating this transformation by streamlining manufacturing processes and incentivizing domestic production.

This government initiative not only addresses India’s immediate medical needs but also positions the country as a leader in the global medical devices market. By investing in domestic manufacturing, India reduces its dependence on imports, lowers healthcare costs, and improves access to life-saving technologies for its population. Continued support for innovation and local production will be essential for reducing reliance on foreign suppliers and fostering long-term growth in the medical devices sector, ultimately benefiting healthcare systems worldwide.

Innovative financing and investment models
The healthcare and MedTech sectors are evolving rapidly, driven by innovative financing and investment models reshaping global and regional markets. According to the 2024 Jefferies annual healthcare report, stakeholders, including executives and investors, are optimistic about a surge in IPOs and corporate deal-making in 2025, anticipating an increase in healthcare M&A activities.

Despite global deal activity being muted recently, it is expected that healthcare M&A levels will rise, with North America maintaining dominance in the market. Although still appealing, European opportunities have seen a slight decline in perceived potential. Geopolitical risks have emerged as a significant concern, surpassing traditional worries, such as funding and pricing cuts, which remain substantial.

Through the third quarter of 2024, there have already been 195 MedTech M&A transactions, exceeding the total number of deals in 2023, with deal value reaching USD 47 billion. This surge is expected to continue in 2025, fueled by anticipated interest rate cuts and regulatory changes from the incoming administration. Venture capital investments into MedTech are projected to hit USD 21.5 billion by the end of 2024, marking a 27-percent increase from 2023 and signaling a recovery after a two-year slowdown. As interest rates decline and AI-driven innovations gain traction, venture investments in MedTech are expected to grow further in 2025.

In India, the cross-border M&A landscape is also seeing dynamic changes. The Indian government’s regulatory reforms, including the Startup India and Make in India campaigns, are making the country a more attractive destination for global investors. One key trend is reverse flipping, where startups previously based in jurisdictions like the US or Singapore are re-domiciling back to India. This shift is supported by tax incentives, such as the abolition of angel tax and reductions in corporate tax rates, which are expected to further attract foreign investments. Furthermore, the Securities and Exchange Board of India (SEBI) has introduced measures to improve market transparency and liquidity, positioning India as a promising hub for cross-border M&A activity.

As the MedTech sector strengthens and India’s market becomes increasingly favorable for investments, innovative financing models fuel growth. These models include strategic partnerships, venture capital, and regulatory reforms that reduce the risks for investors while enhancing market opportunities. The rise of technologies like AI drives investor interest in the healthcare sector. As geopolitical and economic uncertainties evolve, the financial strategies within these industries will continue to adapt, ensuring a robust environment for investment and growth in 2025.

In 2024, M&A in the MedTech sector remained a key growth driver, with strategic companies and private equity (PE) firms actively seeking opportunities to expand their market presence. Players are pursuing strategic acquisitions to bolster their product portfolios and enhance technological capabilities. Simultaneously, PE firms aggressively target healthcare investments, drawn by the sector’s potential for high returns. This dual momentum is expected to continue into 2025, spurred by favorable market dynamics and declining interest rates. For MedTech sellers, this presents a prime opportunity to capitalize on heightened buyer interest, but success will depend on their ability to align with the differing priorities of these buyers.

Strategic buyers, particularly large Fortune 500 companies, are focused on acquiring innovative technologies that can seamlessly integrate into their existing offerings and open new market opportunities. Sellers, who emphasize the potential for innovation and technological enhancement, can position themselves as valuable partners. Additionally, these buyers are drawn to acquisitions that offer synergies, such as economies of scale or expanded market access. Demonstrating clear pathways to operational efficiencies and growth can significantly boost valuations, making synergy-focused deals particularly attractive.

On the other hand, private equity firms are driven by buy-and-build strategies, seeking scalable businesses that can be consolidated into larger, more valuable entities. They prioritize companies with strong recurring revenue models and high margins, such as subscription-based services or disposable products. Sellers that can showcase their scalability, customer retention, and sustainable margin growth will appeal to PE firms aiming for long-term profitability.

For MedTech sellers, preparation is critical. Ensuring strong financial performance, regulatory compliance, and a compelling growth narrative will be key to maximizing exit value. Sellers who effectively articulate their unique value propositions and align with the strategic priorities of potential buyers will be best positioned for success.

Recent M&A activity underscores the sector’s dynamism, with several high-profile deals reflecting strategic moves by leading companies. Johnson & Johnson’s USD 13.1-billion acquisition of Shockwave Medical, BD’s planned USD 4.2-billion purchase of Edwards Lifesciences’ critical care business, and Boston Scientific’s pending USD 3.7-billion acquisition of Axonics highlight the scale of consolidation efforts.

As the M&A landscape evolves, strategic acquirers and PE firms are expected to pursue aggressive growth strategies, creating a competitive marketplace with opportunities for well-positioned sellers.

Some large mergers and acquisitions since September 2023

• Johnson & Johnson acquired Shockwave Medical for USD 13.1 billion.
• BD plans to acquire Edwards Lifesciences’ Critical Care business for USD 4.2 billion.
• Baxter plans to sell its kidney care business for USD 3.8 billion.
• Boston Scientific plans to acquire Axonics for USD 3.7 billion.
• Johnson & Johnson MedTech plans to acquire V-Wave for USD 1.7 billion.
• Owens & Minor plans to acquire Rotech Healthcare for USD 1.36 billion.
• Edwards plans to acquire JenaValve and Endotronix for USD 1.2 billion.
• Boston Scientific plans to acquire Silk Road Medical for USD 1.16 billion.
• Carl Zeiss acquired Dutch Ophthalmic Research Center for USD 1.07 billion.
• Boston Scientific acquired Relievant Medsystems for USD 850 million.
• Enovis acquired LimaCorporate for USD 840 million.
• Steris sold its dental segment for USD 787.5 million.
• Surmodics plans to be acquired by private equity firm GTCR for USD 627 million.
• Inari Medical acquired LimFlow for USD 415 million.
• Johnson & Johnson MedTech acquired Laminar for USD 400 million.
• Alcon acquired Belkin Vision for USD 385 million.
• ZimVie sold Spine and EBI business (now called Highridge Medical) for USD 375 million.
• Getinge acquired Healthmark for USD 320 million.
• Hologic acquired Endomagnetics for USD 310 million.
• Edwards acquired Innovalve for USD 300 million.
• Integra LifeSciences acquired Johnson & Johnson’s Acclarent for USD 275 million.
• Haemonetics acquired OpSens for USD 255 million.
• Smith+Nephew acquired CartiHeal for USD 180 million.
• Integer acquired Pulse Technologies for USD 140 million.
• Haemonetics acquired Attune Medical for USD 106 million.
• Merit Medical acquired EndoGastric Solutions for USD 105 million.

Collaborations and public-private partnerships
India’s MedTech sector is poised for exponential growth, and collaborative ecosystems are central to driving this transformation. By fostering partnerships among public institutions, private enterprises, and research bodies, such ecosystems can accelerate innovation, enhance manufacturing capabilities, and improve healthcare accessibility. Public-private partnerships (PPPs) are a cornerstone of this approach, exemplified by successful collaborations like the one between AIIMS and MedTech innovators, which led to the development of affordable, India-specific medical devices, addressing both cost and accessibility challenges.

These partnerships streamline regulatory processes, foster local R&D, and promote upskilling. Expanding distribution networks through collaborations ensures MedTech products reach underserved areas, fostering inclusive healthcare growth. Strengthening these ecosystems will be key to India’s rise as a global MedTech manufacturing and innovation leader.

Outlook
As the MedTech industry continues to navigate the complexities of the current landscape, its path forward is marked by opportunities for growth, innovation, and strategic evolution. The challenges of today pave the way for the breakthroughs of tomorrow, whether through the integration of cutting-edge technologies, exploration of new market segments, or the cultivation of strategic partnerships. By focusing on strategic investments, cost optimization, and consumer engagement, MedTech companies can unlock new avenues for growth and continued success in an ever-changing market. Those that embrace adaptability as a core tenet of their operations will be best positioned to thrive in this dynamic environment, leveraging the innovation ecosystem to remain robust and responsive to the evolving demands of healthcare.