The Future of Aging: Medtech Solutions for a Healthier Tomorrow

The world is getting older. According to the World Health Organization, by 2030, people over the age of 60 will comprise nearly 20% of the global population; by 2050, that age group will double, and the over-80 age group is expected to triple by 2050.¹ Figure 1 provides a more dramatic view of this shift, looking back to 1950. Importantly, we believe this trend towards longer lifespans will have powerful implications for the utilization of health care products and services as individuals seek to maintain a high quality of life into their later years. 

Figure 1. United Nations Populations By Age Group, Historical, and Projected

Image

Source: UN, World Population Prospects (2022) – processed by Our World in Data. "Total" [dataset]. UN, World Population Prospects (2022) [original data].

These added years allow individuals to pursue postponed passions and potential contributions to their communities and society. Such later-life pursuits require prolonged good health, and with medical and technological advancements, aging populations will enjoy longer, more productive, and fulfilling golden years. 

However, extended life spans come with an increased incidence of certain medical conditions–typically chronic in nature—such as heart disease, cancer, diabetes, and respiratory conditions (Figure 2). Such situations typically require continuous monitoring and management. This demographic shift towards older populations across the globe has increased awareness of the importance of preventative care and health in general, driving greater penetration of health care and medical devices in younger age cohorts.

Figure 2. Prevalence of Selected Chronic Conditions as a Function of Age

Image

Source: Harris, Randall E., Epidemiology of chronic disease; global perspectives. Jones & Bartlett Learning, 2019.

Medtech Explained

As the name suggests, medical technology (medtech) combines the medical and technology fields. This broad discipline applies organized technological knowledge to improve health care services' quality, safety, effectiveness, and sustainability. Medtech companies potentially impact individuals from prevention to diagnosis and cure. We see its presence in everyday objects like syringes, surgical masks, gloves, glasses, and wheelchairs to more complex devices, including body scanners, gene mutation tests, implantable devices including heart valves and pacemakers, and replacement joints for knees and hips.

The area encompasses broad categories of products and services. Medical devices include products, services, or solutions that prevent, diagnose, monitor, treat, and care for individuals by physical means. In vitro diagnostics are noninvasive tests used on biological samples (e.g., blood, urine, and tissue) to determine a person's health status. Digital health refers to tools and services that use information and communication technologies to improve health and lifestyle prevention, diagnosis, treatment, monitoring, and management. 

The Investment Case for Medtech

Beyond escalating global demand for medtech products and services, the structure of these businesses presents unique investment challenges and opportunities. Most medtech categories are competitively stable, with two to four players controlling the bulk of the market share, given the high barriers to entry and scale. The main factors at play start with high research & development (R&D) costs, which can reach billions of dollars annually. Further, the regulatory framework is complex in ensuring the safety of medtech products and services, with inconsistent requirements across countries and regions. Medtech companies must comply with regulations governing product design, development, manufacturing, testing, and marketing. These challenges can present difficult to nearly impossible obstacles for new entrants to overcome, and even when regulatory requirements are met, effectively scaling distribution is an additional hurdle.