The 2025 Pulse of the Medtech Industry report from EY offers a clear snapshot of where the medtech sector stands — and where it’s heading. The primary message is one of a mix of steady growth and mounting pressures. Revenues across the medtech industry rose 7 percent in 2024 to reach $643 billion, marking a rebound from the pandemic slowdown. Yet along with this growth, companies are grappling with cost containment, rising interest rates, and an increasingly cautious investment environment.
One of the most notable trends in the report is the imbalance between revenue growth and profitability. While top-line numbers look healthy, earnings have not kept pace. Many companies face tighter margins as R&D, manufacturing, and regulatory costs rise. Larger firms with diversified portfolios are better positioned to absorb these pressures, while smaller innovators often find themselves stretched thin. This divergence is reshaping collaboration models, as big players look to acquire or partner with startups to maintain pipelines of breakthrough products.
M&A deal volume has slowed, but valuations remain high for companies with differentiated technology. Strategic buyers are being selective, targeting assets that directly align with core growth areas. Private investment has become harder to secure, especially for early-stage ventures, which could have longer-term implications for the pace of innovation. Venture capital funding declined compared to previous years.
AI-enabled diagnostics, minimally invasive surgical systems, and connected devices are the leading categories for growth. Companies are also investing heavily in digital tools that extend care outside the hospital and into the home, aligning with health systems’ focus on cost reduction and patient convenience.
North America and Europe remain strong markets, but growth in Asia-Pacific is accelerating, fueled by expanding healthcare infrastructure and rising demand for advanced treatments. Supply chain resiliency is still top of mind. Many companies are localizing manufacturing or diversifying suppliers to mitigate risk after the disruptions of recent years.
The EY report indicates that medtech’s future will be defined by adaptability. Firms that can align product development with evolving clinical and economic needs will be best positioned to thrive. The demand for technologies that improve outcomes, reduce costs, and expand access to care has never been greater.
Sherrie Trigg
Editor and Director of Medical Content
To obtain a copy of the report, go here .
