Increased competition, more emphasis on cost reduction and questions about products' effectiveness are negatively affecting results at major medical device manufacturers, resulting in layoffs and plant closings.
Zimmer Holdings reported a slight 1% revenues increase for the final three months of 2012, but reported that sales in Europe actually tumbled 4%, with an 8% drop in its hip business. Growth for the full year in the America was just 1%. Zimmer Spine is closing a plant in Texas, and the company is launching other moves, including improved materials management programs, as it tries to cut costs by more than $80 million.
Boston Scientific, a major player in the coronary stent market, launched a restructuring program aimed at cutting costs more than $100 million annually. "We clearly need to tighten down and improve our research and development productivity," CEO Michael Mahoney said. The company is facing what could become a major shift from drug-eluting metal stents to bioresorbable plastic stents. Abbott is the leader in the fast-emerging field of disappearing stents.