Impact Of COVID-19 On Medical Device Industry
The rising mortality rate due to the COVID-19 outbreak has thrown the medical community into a frenzy. The outbreak has spread to over 180 countries, which made about one-third of the global population to go under lockdown. Also, this pandemic has caused an exponential growth in demand for healthcare products such as ventilators, medical clothing, face mask, and diagnostic devices. Hospitals are struggling to manage the condition as the disease is spreading faster than companies could produce masks, ventilators, and testing kits. This has resulted in a severe shortage of critical medical supplies, such as drugs, life-support machines, and masks in the affected regions. The existing medical devices will not be sufficient to treat all patients if the number of infected people continues to rise. With the increasing demand for emergency medical devices caused by the out-of-control epidemic, medical device manufacturers globally are trying hard to meet the production demand.
IMPACT ON SUPPLY CHAIN:
The coronavirus outbreak is disrupting supply chains all around the world with the most aggravating effect on the medical device market. Among the countries in APAC, China, in particular, is the major manufacturing hub of critical medical equipment. That houses some of the global top 10 medical device companies including major lithium producing companies. Since lithium battery is an essential component used in a wide range of critical medical equipment such as wearable oxygen monitors, sphygmomanometer, and other medical devices, the demand for these batteries is increasing. But, COVID 19 outbreak has raised major challenges such as limited supply channels, exorbitant transportation fees, production costs, liquidity problems, among others. These challenges will either restrict the supply or will compel them to increase the market prices of their battery-grade lithium. Eventually, this is leading to the shutdown of these medical device manufacturing facilities owing to severe supply chain disruption. This is significantly affecting the revenue generation for these enterprises.
Considering the hidden and rapid transmission of the new COVID-19, the outbreak duration is expected to be longer, with a huge impact on the medical device market. Engagement with alternative suppliers who can assist in efficient demand and inventory planning of spare and products will prove beneficial to meet any ad hoc variations in product demand. It primarily ensures the adequate availability of spares and products during emergencies. It will help to overcome expenses associated with the excess holding of products and enable buyers to reduce procurement time in such cases.
- Tejaswini Hiremath