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U.S. Medical Device Industry and the Trans-Pacific Partnership

November 9, 2016

Gerry Zapiain is a Senior International Trade Specialist in Industry and Analysis’ Office of Health and Information Technologies.

Forecast to grow to over $360 billion by 2017, the global medical device market offers tremendous opportunity for U.S. manufacturers. The Trans-Pacific Partnership (TPP) Agreement is expected to reduce many barriers for U.S. medical device producers and open up even more new business opportunities in some of the fastest growing markets in the world.Medical Devices

ITA’s comprehensive 2016 Top Markets Report for Medical Devices defines a medical device as “any piece of equipment or apparatus used to treat or diagnose an illness and comes into direct contact with the patient.”

The report describes the expansive growth potential for U.S. medical devices in international markets, provides an overview of the challenges and barriers, and forecasts some of the benefits the medical device sector will experience with the TPP agreement.

The U.S. medical device industry is expected to remain highly competitive in the global market. The industry has increasingly embraced globalization. Global demand for medical devices is being driven by increasing expenditures and initiatives on health care, including the building of new hospitals and clinics, establishment of public health insurance, and greater emphasis on improving the health of the general population. In addition, the increase in lifestyle diseases, aging populations, and income levels in developing countries will further catalyze demand.

Currently, The United States exports $5 billion in medical devices to TPP-designated markets annually. The Trans-Pacific Partnership agreement is dedicated to increasing the trade in goods and services in ways that are critical to U.S. medical device producers and in terms that go beyond past trade agreements.

Key elements in the agreement include:

  • Enhancing dispute resolution mechanisms
  • Improving government procurement practices
  • Stronger intellectual property protections
  • Removing tariffs on medical devices that can be as high as 30%
  • Increased regulatory coherence among the member states
  • Improving transparency with respect to reimbursement and pricing

Ultimately, the TPP will help to make U.S. products more competitive in the region, benefiting U.S. companies that export to TPP signatory countries. Summary case studies reflecting potential TPP agreement opportunities are below:

Malaysia

Malaysia represents one of the more vigorous and vibrant medical device markets in Southeast Asia, presenting opportunities for U.S. exporters to expand their sales into a rising economy. Increasing patient access to healthcare will remain a key focus for the Government of Malaysia over the next 5 years, including upgrading facilities and equipment, and expanding delivery systems.

Top Markets Report Medical Devices Country Case Study: Malaysia

Japan

Japan’s market for medical devices and materials continues to be among the world’s largest. According to the latest official figures from the Ministry of Health, Labor and Welfare (MHLW) Annual Pharmaceutical Production Statistics, the Japanese market for medical devices and materials in 2013 was approximately $33.6 billion (up 3.2% from 2012 in yen terms). Japan’s total imports of U.S. medical devices were approximately $7.7 billion in 2013. In the near-term, the market is expected to increase due to Japan’s aging population and continued demands for advanced medical technologies.

Top Markets Report Medical Devices Country Case Study: Japan

For more information on this historic trade agreement and the future opportunities for M&E exports, please download ITA’s Medical Devices Top Markets Report and visit our TPP site.

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