The healthcare sector in 2024 will continue its strong growth trajectory, with the global healthcare services market expected to expand from $8,963.64 billion in 2023 to $10,908.99 billion by 2028, at a compound annual growth rate (CAGR) of 5%.
This growth is driven by multiple factors, including technological advancements, an aging global population, and the adoption of value-based care models.
Below are the 5 key trends shaping the industry this year
- GLP-1 Drugs and Impact on Medical Devices
- Aging Population – Driving Healthcare Demand
- Robotics and AI in Healthcare
- Antibody Drug Conjugates (ADCs)
- Mergers & Acquisitions (M&A) in Healthcare
GLP-1 Drugs and Impact on Medical Devices
One of the most discussed developments in 2023 has been the rise of GLP-1 drugs, which showed significant results in weight reduction and improved cardiovascular outcomes.
According to BlackRock, Novo Nordisk’s SELECT trial data confirmed this, driving major investments in the space. However, the weight loss effects have also raised concerns over the impact on the medical devices sub-sector, particularly devices related to cardiovascular treatments and obesity care. Despite these concerns, BlackRock expects that the overall impact on the medical device industry will be minimal in the near term, as the aging population and growing demand for innovative medical procedures will continue to drive growth.
Aging Population – Driving Healthcare Demand
The aging population is a central driver of healthcare demand. The proportion of individuals aged 65 and above in the U.S. is 17.5% in 2023, compared to 12% in 1985. This demographic shift is expected to increase demand for healthcare services related to chronic conditions, long-term care, and specialized medical procedures. Innovations like surgical robotics are gaining from this trend, with companies like Intuitive Surgical benefiting from the rising demand for minimally invasive procedures.
Robotics and AI in Healthcare
Surgical robotics continue to gain traction, though their market penetration remains relatively low.
According to BlackRock, Intuitive Surgical (ISRG), a leader in robotic-assisted surgeries, performed less than 10% of the 20 million soft tissue surgeries conducted globally in 2022. However, ISRG has seen significant growth, with a 15% compound annual growth rate (CAGR) in procedure volumes and a 12% CAGR in installations since 2019.
Further advancements in robotics and artificial intelligence (AI) are expected to revolutionize diagnostics and hospital operations, saving the U.S. healthcare industry around $150 billion annually, as noted by PwC and BlackRock.
AI applications will likely shift healthcare from a reactive model to a proactive one, focusing on health management instead of disease treatment (PwC).
Antibody Drug Conjugates (ADC)
ADCs are one of the fastest-growing classes of oncology treatments, offering a targeted approach that delivers chemotherapy directly to cancer cells. As BlackRock reported, in 2023, Pfizer’s acquisition of Seagen for $43 billion marked one of the most significant investments in this technology. Alongside this, AbbVie acquired ImmunoGen for $11 billion. These acquisitions highlight the growing interest in ADCs, which are expected to lead to major developments in 2024, particularly in lung and breast cancer trials (BlackRock).
Mergers & Acquisitions (M&A) in Healthcare
M&A activity within the healthcare and biopharma sectors is projected to rise in 2024, especially driven by healthcare technology and digital transformation.
According to Benchmark International, Biopharma M&A saw a resurgence in 2023, with total deal value increasing by 79% compared to the previous year, reaching $152 billion, the highest level since 2019.
More than 60% of healthcare executives surveyed expect M&A deal volumes to rise in 2024, with health systems seeking partnerships to gain scale and share resources.
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