Medical Device Industry Profile 2013
- Distinction between Medical Devices and Pharmaceuticals
- Size and Structure of the Industry
- Imports and Exports
- Medical Device Manufacturing Costs
- Low R&D Costs
- Regulatory Process Emphasizes Harmonization
- Supportive Network of Industry Associations
- Federally-Funded Research Support Programs
- Commercialization Initiatives
The medical device industry consists of firms that produce a wide range of products used for diagnosis and treatment of ailments. These products include the following:
- medical, surgical and dental equipment (including electromedical equipment and related software)
- furniture, supplies and consumables
- orthopaedic appliances et prosthetics
- diagnostic kits, reagents and equipment
The research, development and manufacturing of medical devices involve the application of diverse biomedical and engineering disciplines. The Canadian medical device industry benefits from the strengths of associated Canadian expertise and industries including biotechnology, advanced materials, microelectronics, telecommunications, and software and informatics.
In addition, the industry is able to draw on world-class innovative research being conducted in Canadian universities, research institutes and hospitals, some of which is spun-off into Canadian medical device companies.
Distinction between Medical Devices and PharmaceuticalsFootnote 1
Medical devices follow a different course of development compared to that of drugs. Medical devices are generally developed based on a variety of sciences including mechanical, electrical and materials engineering, and biotechnology, whereas, pharmaceutical development is based on disciplines such as pharmacology, chemistry, biotechnology and genetic engineering.
Some medical devices temporarily or permanently replace a function of the body, while pharmaceuticals are absorbed into the human body to perform their intended purposes. New medical devices can sometimes require change management and training measures on the part of health facilities and clinicians adopting these devices.
Medical devices have a relatively short product life cycle and investment recovery period while pharmaceuticals have an extensive product life cycle and investment recovery period.
Size and Structure of the Industry Footnote 2
Due to the diversity of firms in the medical device sector, key numerical benchmarks are difficult to obtain and are not effectively captured in ongoing economic and industrial surveys. However, in 2004-2005, Industry Canada commissioned a survey of the sector which provided the following snap shot of the Canadian medical device industry.
- The medical device manufacturing and development industry consisted of approximately 1,100 facilities, comprising approximately 1,000 firms. (Firms engaged solely engaged in distribution were not included.)
- Approximately 90 percent of the medical device facilities were Canadian owned, unchanged from 2000 3. By number, most firms were small and Canadian owned. There were some larger, foreign owned multinational firms located in Canada.
- Medical device-related employment in 2004-2005 rose to approximately 26,000, compared to employment of 22,000 in 2000.
- The industry was distributed across Canada, although concentrated in Ontario and Quebec.
In 2011, the size of the Canadian medical device market was valued at $6,300 million, up from $4,500 million in 2006 Footnote 4.top of page
Imports and Exports Footnote 5
In 2011, Canada’s medical device exports were $1,835 million while Canada’s imports were $6,499 million.
The key markets for Canadian medical device exports based on total exports are: the United States ($1,195 million, 65 percent), Germany ($85 million, 5 percent), China ($57 million, 3 percent), United Kingdom ($50 million, 3 percent) and Italy ($48 million, 3 percent).
The following countries are key import sources for medical device products based on total imports into Canada: United States ($3,404 million, 52 percent), China ($469 million, 7 percent), Germany ($424 million, 7 percent), Mexico ($280 million, 4 percent) and Japan ($274 million, 4 percent).
|Top Ten Exports by HS code (8-digit level)||Millions $||Share of Total Exports|
|Source: Statistics Canada, World Trade Atlas 2012|
|38220000–Diagnostic or laboratory reagents||349||19.0%|
|94029000–Medical, surgical, dental or veterinary furniture||154||8.4%|
|90189000–Instruments and appliances used in medical or veterinary sciences||144||7.9%|
|90229000–Parts and accessories for apparatus based on the use of X-rays||137||7.5%|
|28444019–Radioactive elements and isotopes and compounds other than cobalt 60 radioactivity||129||7.0%|
|28444011–Cobalt-60 and compounds with Cobalt-60||93||5.1%|
|90191000–Mechano-therapy appliances; massage appliances; etc||91||5.0%|
|90183900–Needles, catheters, cannulae and the like||79||4.3%|
|Top Ten Exports by HS Code||1,366||74.4%|
|All other HS codes||469||25.6%|
|Top Ten Imports by HS code (10-digit level)||Millions $||Share of Total Imports|
|Source: Statistics Canada, World Trade Atlas 2012|
|9018909080 Instruments and appliances used in medical, surgical procedures||466||7.2%|
|3822001010 Diagnostic reagents for medical diagnosis||375||5.8%|
|9021390000 Artificial parts of the body||279||4.3%|
|3002100010 Human antisera and other human blood fractions for diagnosis use, for therapeutic and prophylactic use in humans||247||3.8%|
|9018390010 Bougies, catheters, drains and sondes, and parts and accessories thereof||244||3.8%|
|9018909099 Parts/accessories for instruments & appliances used in medical, surgical, dental or veterinary science||242||3.7%|
|9019100010 Mechano-therapy application||194||3.0%|
|9021900000 Appliances, which are worn or carried or implanted in the body||190||3.0%|
|9021310000 Artificial joints||176||2.7%|
|9018490000 Instruments and appliances, used in dental science||171||2.6%|
|Top Ten Imports by HS code||2.584||39.9%|
|All other HS codes||3,915||60.1%|
Medical Device Manufacturing Costs Footnote 6
KPMG’s Competitive Alternatives is an annual survey of manufacturing costs in international business locations in various manufacturing sectors, including medical device manufacturing. The 2012 survey looked at 19 different industry operations in 14 countries: Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Russia, the United Kingdom, and the United States.
The results for countries placed Canada fourth on the manufacturing costs index, ahead of major medical device manufacturing locations including the United States, Germany and Japan.
(U.S. = 100)
|Source: KPMG 2012|
Low R&D Costs
The Canadian Scientific Research and Experimental Development (SR&ED) Tax Incentive Program, administered by the Canada Revenue Agency, encourages Canadian businesses of all sizes, and in all sectors to conduct R&D in Canada. It is the largest single source of federal government support for industrial R&D. It provides claimants cash refunds and/or tax credits for their expenditures on eligible R&D work done in Canada.top of page
Regulatory Process Emphasizes Harmonization
- All medical devices in Canada are subject to the Food and Drugs Act and its regulations. The Act permits Canadian manufacturers to export product in accordance with the receiving country's laws, irrespective of domestic approval status. This export provision provides an advantage for companies wishing to establish export manufacturing from a Canadian base.
- Canada has a risk-based system of regulation in keeping with international trends.
Supportive Network of Industry Associations
Companies in Canada’s medical device industry are supported by a number of national and regional associations, including:
- Alberta Health Industry Association
- Life Science Association of Manitoba
- LifeSciences British Columbia
- CMMA, a MEDEC affiliate (Canadian MedTech Manufacturers' Alliance)
Federally-Funded Research Support Programs
Several federally–funded research programs and councils support health-related research in Canada: the Canadian Institutes for Health Research (CIHR); Networks of Centres of Excellence; National Research Council (NRC); and the Natural Sciences and Engineering Research Council (NSERC).
- Footnote 1
MEDEC, Canada’s national medical device association
- Footnote 2
Source of data unless otherwise specified: E&B Data collected in 2004 and 2005 and the Global Trade Atlas database.
- Footnote 3
Statistics Canada, Medical Devices Industry Survey 2000.
- Footnote 4
The World Medical Markets Fact Book 2012, Espicom, July 2012.
- Footnote 5
Global Trade Atlas
- Footnote 6
Competitive Alternatives: KPMG’s Guide to International Business Location Costs. 2012 Edition.
- Date modified: