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The Top 10 Medtech States

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The Top 10 Medtech States U.S. map image from Flickr The Top 10 Medtech States Brian Buntz and We’ve all heard the stereotypes: California is a medtech innovation hotbed. Chris Newmarker Massachusetts has cutting-edge research and Yankee ingenuity. And Minnesotans wake up earlier and work longer hours than everyone. A substantial proportion of While the rankings for the top five medical device companies are fairly the medical device industry is straightforward, there is no single state that can confidently claim to be the clustered in a handful of best spot for all medical device firms. Orthopedic firms, for instance, will find states, although the number many advantages in Indiana while digital health companies would likely of U.S. medtech hubs is growing. fare better in a state like California or Massachusetts. In the following rankings, we take a look at the most recent data available, We ranked the states based weighing everything from business friendliness to overall medical device on medical device employment in each state. Interestingly, the top three states score poorly in employment, patents, NIH funding, VC medical device terms of business environment but score better than all of the other states on funding, and business the list in nearly every other category. friendliness. Read on to discover major data for 10 top medical device states in the United States. 1. California Sure, California has its problems. peripheral equipment Important Statistics: But the state is still unparalleled manufacturing, which employed when it comes to sheer size, 340,000, according to PwC. Medical Device Manufacturing Employment, 2013: boasting more medical device Orange County has long been one 63,307 companies and workers—by far— Medical Device Patents, 2009–2013: of the biggest medical device 10,061 than any other. The state’s device clusters in the country. The hub Medtech VC Investing, 2014: industry is considerably bigger than $1.2B there may be the biggest in the NIH Funding, 2014: that of Minnesota and state and is definitely the largest in $3.4B Massachusetts. Medical Device Establishments: Southern California, according to a 1039 Best States for Business Ranking: In fact, California has multiple big report published by Biocom in 32 device hubs—Orange County, Los 2013. Employers in Orange County Chief Executive State Ranking: 50 Angeles, San Diego County, Silicon are also handsomely rewarded, Valley. Looking at it differently, all according to the report. An Major OEM headquarters: of Southern California from the average medical device worker in Varian Medical Systems Medtronic (Cardiovascular Div.) coast to the Arizona state line is a Orange County makes an average Edwards Lifesciences life sciences hub, as is the entire of $120,687, according to Biocom’s Intuitive Surgical Bay Area coupled with report. Sacramento. The medical device industry in Throughout the state, an average Orange County was responsible for employee in the broader life more economic activity than sciences industry in California earns Riverside, San Diego, and Imperial in excess of $97,000, according to counties combined. In all, the OC’s the PwC 2014 California medical device industry was Biomedical Industry Report. responsible for $5.3 billion of annual economic activity out of $9.5 billion While the state may be well known generated by the greater four- for its motion picture and high tech county region. industries, the combined life science industry in California employed more people—267,000 in 2012—than all other industries in the state apart from computer and (continued) 2 The Top Ten Medtech States California Is Still on Top To the south, San Diego is emerging as a leader when it comes to wireless California has more medical technologies and biotech. life science VC Silicon Valley has its own advantages, too, leading the nation when it funding than the comes to venture capital funding. In recent months, Apple and Google, both of which are based in Silicon Valley, have shown increased interest other nine states in in medical innovations. In December 2015, Google debuted a new this list combined. name for its life science business—Verily. Among the top 10 medical device states, California pulls in substantially more venture capital investment for medtech than any other state on the list—in 2014, there was $1.2 billion invested in medical device technology—more than the other nine states in list combined. In 2013, California pulled in roughly 45% of all of the venture capital funding in the United States within the life sciences sector—nearly $3 billion total. The state saw the number of employees in the life sciences industry rise by 2% during the recession from 2008–2012, while other states like Massachusetts, Minnesota, Pennsylvania, Indiana, and New Jersey saw their life science employment numbers decline. According to PwC, only the state of North Carolina grew at a quicker rate (8.3%) in this time span. While a number of medtech companies are leaving the state, looking for greener pastures, the talented workforce present and strong life sciences infrastructure in the state will likely secure it as the U.S. leader for some time. 3 The Top Ten Medtech States Much of the medtech industry is based around St. Paul (shown here) and Minneapolis. 2. Minnesota Minnesota's history in medtech officials reportedly told the ImportantImportant Statistics Statistics: : stretches back to the middle of the governor that the company Medical Device Manufacturing last century. The roots of the state’s planned to keep their Minnesota Medical Device Manufacturing Employment, 2013: Employment, 2013: Medical Alley are even highlighted operations intact and that, rather 28,141 63,307 Medical Device Patents, 2009–2013: in a Smithsonian exhibit. than laying off employees in the Medical Device Patents, 2009–2013: 4269 10,061 state, it had plans to hire more in Medtech VC Investing, 2014: Medtech VC Investing, 2014: The state is presently home to the $234M the future. $1.2B NIH Funding, 2014: likes of Medtronic (which still has its NIH Funding, 2014: $497M $3.4B operational headquarters there), Twin Cities Business magazine Medical Device Establishments: Medical Device Establishments: named Medtronic’s CEO Omar 308 St. Jude Medical, 3M, and Mayo 1039 Best States for Business Ranking: Best States for Business Ranking: Clinic. Boston Scientific has a large Ishrak as its 2015 Person of the Year. 13 32 And the Minneapolis/St. Paul Chief Executive State Ranking: Twin Cities presence, and medical 31 device OEMs ranging from Business Journal has named Ishrak Major OEM headquarters: Olympus to Coloplast also have its 2016 Executive of the Year in the MajorVarian OEMMedical headquarters Systems : Medtronic (Cardiovascular Div.) Medtronic (Operational HQ) operations there. According to Twin Cities, noting that Medtronic Edwards Lifesciences St. Jude Medical Intuitive Surgical Newsweek in 2010, 22% of has already added 350 jobs to the 3M Coloplast employees in the greater Twin North Star State. Cities area work in the medical The manufacturing conglomerate technology sector. That figure 3M is an even bigger employer in represents a larger percentage the Twin Cities than Medtronic. The than tech workers in the Bay Area company, which is at once a (21%). medical device maker and a Although Medtronic is now officially supplier to the industry, was ranked headquartered in Dublin, Ireland, 205 in Forbes’ listing of the world’s after its $50 billion acquisition of biggest companies. By contrast, Covidien, the company is still a Medtronic was listed at 249. powerhouse in the Twin Cities, employing some 8000 employees there. Upon first disclosing to Governor Mark Dayton its plans to move its headquarters to Ireland, company (continued) 4 The Top Ten Medtech States Under Ishrak’s tenure, Medtronic Minnesota Wins the Most PMAs has become one of the top two medical device companies in the California may be the largest medtech state, but it is not at the top of the world. list when it comes to U.S. FDA approvals for the toughest type of medical device applications. The state has a history of clinicians Chris Newmarker who have been involved in medical device development. The It turns out that when it comes to getting premarket approvals from FDA, Minnesota state also has a strong network of remains the leader and has even grown its lead over California during the Great Recession, according to EvaluateMedTech data relayed by LifeScience Alley. suppliers, including Digi-Key, one of Over more than 50 years of PMAs, a third of them—more than 9000—involved the largest distributors of electronic devices created by Minnesota applicants. California only had 28%, or nearly 8000. And LifeScience Alley reports the difference has been even more stark in recent parts. Other major Twin Cities– years. based contract manufacturers The next states in the running—Massachusetts, Texas, and New Jersey—only had a include Proto Labs (Maple Plain), fraction of the pie. Heraeus Medical Components (St. Minnesota’s accomplishment is even more remarkable considering that California Paul), Minnetronix (St. Paul), and Sil- easily wins out when it comes to number of medtech workers (about 63,207 to Pro (Delano). Minnesota’s 28,141, as of 2013) and venture capital funding ($1.01 billion to Minnesota’s $165 million, as of 2013). The state also boasts a strong California is home to more medical device companies than any other U.S. state, infrastructure of suppliers to the with a dense network of high-tech firms and a talented workforce. But some of the most life-saving (as well as most highly regulated) devices have been created in medical device industry and strong Minnesota. support from state politicians. On a more critical note, the state lacks the funding climate that has historically benefited medtech startups in places like California and Massachusetts.
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