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The label “MedTech,” shorthand for medical technology, subsumes lots of disparate, technology-heavy sectors in healthcare. These include the following:

  • Vascular intervention (VI): coronary stents

  • Cardiac rhythm management (CRM): pacemakers, defibrillators

  • Transcatheter heart valves

  • Orthopedic implants (for hip and knee replacements)

  • Surgical instruments

  • Diagnostics

  • Imaging equipment: x-ray machines, computed tomography (CT) scanners

  • Robotics

  • Nanomedicine

While imaging equipment has been used in hospitals since the early 20th century, the majority of medical products used through the mid-20th century were fairly primitive (eg, bandages, sutures).

This chapter focuses on “medical devices,” which compose the bulk of revenues generated from MedTech sales. Figure 23-1 shows the upward trajectory in medical device innovation in the latter half of the 20th century, which parallels the rise in healthcare spending in the United States. The US Food and Drug Administration (FDA) defines a medical device as:

an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article … intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes.

Figure 23-1

Medical Devices: A Relatively New Industry. GDP, Gross Domestic Product; ICD, Implantable Cardioverter-Defibrillator; MRI, Magnetic Resonance Imaging. (Source: Kurt Kruger, Presentation to the Wharton School, Fall 2006.)

Medical devices became prominent with the development of the pacemaker in the 1950s by an engineer, Earl Bakken, who founded Medtronic, the largest MedTech firm today. Medtronic has since diversified to operate in 4 major medical device segments (Figure 23-2). Among these 4 segments, the largest in terms of 2017 revenues is cardiovascular ($10.5 billion), followed closely by minimally invasive therapies ($9.9 billion), restorative therapies ($7.5 billion), and diabetes ($1.8 billion).

Figure 23-2

Four Technologies to Address Multiple Disease States and Conditions at Medtronic.(Source: Medtronic. Used with permission from Medtronic.)


Figures 20-6, 20-7, and 20-8 draw some sharp contrasts between the pharmaceutical and medical device sectors. There are several other important differences. Medical device innovation is “bedside to bench”: Discoveries typically originate at the patient’s bedside in the form of clinician recognition of unmet needs that device therapy might address. Such recognition subsequently gets communicated to engineers (once independent but now employed at MedTech firms) who conduct the “bench research” that translates ...

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