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Reverse Innovation: Is The US Losing Its Edge In Innovation?

Is US-style innovation in the medical device industry heading towards extinction? Gone are the days when companies believed they could build robust businesses by serving largely, if not exclusively, the US market. Today, emerging markets have become growth markets. But those markets, and even a post-health care reform US, challenge an innovation model that used to reward even incremental technology enhancements with premium pricing, by a price-insensitive customer.

By virtually any measure, the US medical device sector should be the pride of American industry. Is there any other industry with products of global importance and application that is so thoroughly dominated by companies headquartered in the US? In comparison, look at pharmaceuticals, medtech’s sister industry: a list of the top 20-25 biopharma companies would show a healthy mix of US, European and even Japanese companies. Not so the medical device industry where in virtually every category - cardiovascular, orthopedics, wound care, you name it - the top companies all are based in the US.

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