While the growth rate of a medtech’s R&D spending can fluctuate, it’s rare for companies – divestitures aside – to actually cut their research spending. But four of the top 10 companies are expected to do just that in the next few years.
From 2021 to 2022, the sellside estimates that Becton Dickinson, Philips and Roche will reduce their research spending by 7%, 4% and 0.4% respectively. All three are a step back from the follies of 2020 and 2021 as they rushed to develop technologies to help fight the coronavirus – diagnostics from BD and Roche, and ventilators from Philips.
In 2023, Abbott is expected to do the same.
Thereafter, analysts expect a return to the steady, steady growth that had been the usual pattern in the pre-pandemic years – excluding big strategic moves such as mergers and divestments, that is- to say.
Calm after the storm
A look at proportional spending — what fraction of a company’s medical device sales they reinvest in medical technology research — shows an equally turbulent few years, with a calmer period beyond 2023. For many companies , the change in proportional spending is less to have more to do with managerial decisions to allocate cash to R&D than with marked changes in revenue.