Summary
Conmed has indicated that sales of its devices have fallen partially due to the budget tightening at hospitals. While the company minimized the this issue in their statement it is just the tip of the iceberg.
Analysis
Many device manufacturers have been anecdotally reporting drops in sales volumes as well as being subjected to aggressive pricing pressures in the form of requests for proposals (RFP). In a recent survey performed by Technology Access Partners, of 50 large medical device manufacturers that participated 75% reported experiencing a substantial increase in the number of RFPs by hospitals.
The companies most likely affected are those that market diagnostics and therapeutics that require the use of a capital equipment item with an ASP of $2,500 or greater), such as KCI, Conmed, Becton, Dickinson and Company. As well as companies that market high cost implantables that are subject to commoditization such as DePuy Orthopaedics, Zimmer and Biomet.
