The 2026 challenges facing the MedTech industry

As the medical device industry heads into 2026, it finds itself at a pivotal moment shaped by rapid technological change, regulatory scrutiny, and ongoing economic uncertainty. Innovation remains the industry’s defining trait, but the path from concept to commercialization is becoming more complex and, in many cases, more fragile.

Artificial intelligence is now embedded in everything from diagnostics and imaging to remote monitoring and surgical tools. While AI promises transformative capabilities, it also introduces new layers of risk and ambiguity during development. Questions around data quality, algorithm transparency, bias, and ongoing performance monitoring are increasingly difficult to separate from core product design, raising the stakes for manufacturers long before a device ever reaches the market.

Regulatory pressure is adding another layer of complexity. The U.S. Food and Drug Administration continues to refine how it evaluates software-driven and AI-enabled devices, often requiring evidence that is difficult to generate within traditional development timelines. For many companies, especially smaller manufacturers, navigating evolving regulatory expectations has become a significant hurdle, influencing everything from clinical trial design to post-market obligations.

At the same time, supply chain challenges remain unresolved. Global disruptions over the past several years exposed vulnerabilities in sourcing components, securing raw materials, and managing logistics. Although conditions have stabilized in some areas, uncertainty persists, forcing manufacturers to rethink long-standing assumptions about cost, reliability, and geographic concentration.

That reassessment has helped fuel a broader push toward reshoring and regionalizing manufacturing. While the goal is greater resilience, shifting production closer to home brings its own challenges, including higher labor costs, workforce constraints, and capital investment demands.

Overlaying all of this is continued industry consolidation. Mergers and acquisitions are reshaping competitive dynamics, altering innovation pipelines, and changing how smaller companies survive—or disappear—in an increasingly crowded and capital-intensive market.

Medical Economics spoke with Michael Abrams, managing partner, Numerof & Associates, about how these and other trends will affect the medical device manufacturing market in 2026.