Coronavirus (Covid-19) Executive Briefing

Understanding the economic impact of the Covid-19 pandemic and the implications for the healthcare sector

- ECONOMIC IMPACT -

Economists and institutions have cut their forecasts and experts are predicting the potential onset of recessionary environments.

Global companies are also concerned about the rising risk of Covid-19, with thousands of the world’s leading companies explicitly mentioning its impact on their business in their latest company filings.

-3.9%

Consensus forecast for world GDP growth in 2020 is -3.9%.

7.5%

The Bank of England expects UK unemployment to peak at 7.5%.

Equity Indices As of 1 September 2020. Indexed to 100 on 1 January 2020

- SECTOR IMPACT: MEDICAL -

As of 26 August 2020

Anaesthesia & Respiratory Devices

Global demand for respiratory support will return to normal by the end of 2020. Supply chain cost related to Covid-19, especially freight, is expected to increase, leading to a reduction in net profit for A&R companies. Although Covid-19 is a one-time effect, the pandemic will positively impact A&R markets for overall respiratory care infrastructure and single-use respiratory consumables

15.7%

The Spinal Fusion market is expected to contract by 15.7% in 2020, and slowly recover during 2021.

General Surgery Devices

$36bn

More than $36bn in grants has been distributed through the Provider Relief Fund programme to both healthcare providers and medical equipment companies.

Key mediCal market developments

Healthcare information technology 

The telemedicine industry has proven to be an essential tool in the fight against the Covid-19 pandemic. Instead of visiting the hospital, due to concerns regarding the risk of contracting Covid-19, patients are using telemedicine, which has increased its availability significantly since the beginning of the pandemic.


Ear, nose and throat devices

Cochlear Limited, in a full year earnings announcement, reported that H2 2020 revenues declined by 29% compared to H2 2019 due to the deferral of elective surgeries across most regions, as a result of Covid-19. In April, the company observed that cochlear implants fell by 60%, but by June, implants had returned to 85% of 2019. Procedures are recovering quickly in most countries, with the notable exception of the UK, Spain and Italy.


General surgery devices

In the US, where private hospitals heavily rely on elective surgeries for their revenue, many hospital administrations had cut their workforce to preserve critical equipment such as personal protective equipment, ICU beds, and ventilators.


While the daily number of new active Covid-19 cases continues to outpace the recovery rate in the US, most states have lifted restrictions on elective surgeries to address the growing health and financial consequences of delaying them. However, the potential of a large “second wave” may force surgeries to postpone again in the closing months of 2020.

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