Note: this article originally ran in MedCity News
The MedTech industry is accelerating at an unprecedented pace. As AI reshapes the landscape, global collaborations are expanding, and the regulatory frameworks are evolving to meet new challenges. Here are ten global MedTech trends for 2025:
1. Renewed focus on expanding existing product lines in M&A
The MedTech sector rebounded strongly in 2024, with M&A poised for even greater momentum in 2025. Potential reductions in interest rates and sector deregulation set the stage for heightened deal activity. Opportunities abound for larger companies, especially in areas like telemedicine, where low valuations present a chance for strategic expansion. Both the size and number of acquisitions are expected to grow, with larger players seeking operational efficiencies and focusing on deals that complement their existing product lines and business models. Cutting-edge innovations like AI-based diagnostics will take centerstage, with niche technologies in emerging markets offering acquirers a competitive edge in this dynamic and unpredictable landscape.
2. Economic uncertainty affects investor activity in early 2025
Despite some economic uncertainty, MedTech investors are optimistic about growth in 2025. Early in the year, investors may adopt a “wait and see” approach as the economic impacts of President Donald Trump’s re-election become clearer. However, some experts speculate that the prospect of lower interest rates could stimulate investor interest in MedTech assets sooner rather than later. Additional uncertainty stems from Robert F. Kennedy Jr.’s potential confirmation to head the Department of Health and Human Services, the possible downstream regulatory changes to the U.S. Food and Drug Administration (FDA) and other agencies, and the unknown impacts of the pending BIOSECURE Act—all of which could influence investor confidence in early 2025. Nonetheless, strong MedTech funding trends in late 2024—marked by increased venture capital and M&A activity—bolster confidence in the industry’s outlook for 2025.
3. AI-MedTech collaborations continue to take centerstage
AI and machine learning technologies remain at the forefront of MedTech innovation, as industry players continue to integrate AI into existing product and service offerings. AI’s MedTech applications span patient-focused care, personnel management, administrative tasks, high-volume data analysis and virtual healthcare assistants, underscoring its transformative potential. The continued shift towards telemedicine and remote hyper-personalized care elevates the role of digital and communications technologies as key components of a modern MedTech enterprise. Digital solution providers remain key targets for strategic partnerships within MedTech, enabling rapid innovation in promising fields.
4. Shifting targets for heightened antitrust scrutiny
In 2025, US antitrust scrutiny for MedTech companies is generally expected to revert to more historical norms. Most experts anticipate that the Trump administration’s focus on fact-based analysis of M&A activity will ultimately have a larger impact than its anticipated position toward technology companies. Nonetheless, antitrust scrutiny is expected to remain high generally though the extent to which the Federal Trade Commission (FTC) and Department of Justice will continue to prioritize innovation protection, pricing practices, and merger control in the MedTech industry remains uncertain. However, AI-related mergers, partnerships and investments are expected to remain under enhanced scrutiny, alongside any transactions that may increase drug prices.
In the UK, new regulatory thresholds introduced by the Digital Markets, Competition and Consumers Act, coupled with growing interest from global competition authorities, are likely to intensify antitrust scrutiny in MedTech. Digital health platforms are likely targets for antitrust authorities, reflecting evolving concerns about data sharing and whether access to critical health data could potentially confer anti-competitive advantages.
5. Cyber threats drive stricter data privacy regulations
As the volume of individuals’ healthcare data collected and processed within the MedTech industry continues to grow, data privacy and security remain key focal points of regulators. The February 2024 ransomware attack on Change Healthcare, the United States’ largest medical claims processor, threatened the security of sensitive personal information for over 100 million people, and reignited concerns over companies’ obligations to ensure HIPAA compliance in the digital age.
Regulatory actions in 2024 signal a clear trend toward stronger protections for personal health data and are expected to continue in 2025. The FTC’s revisions to the Health Breach Notification Rule, protecting health information held by non-HIPAA-accountable entities, and the European Commission’s agreements on the European Health Data Space, strengthening personal health data protections provided under the EU’s General Data Protection Regulation, illustrate policy makers’ commitment to safeguarding citizens’ sensitive information as the MedTech industry collects and processes increasing amounts of data. MedTech will likely remain a prime target for increasingly sophisticated cyberattacks. Enhanced regulations will require proactive cybersecurity measures from MedTech companies, a topic explored in our podcast: Navigating Cybersecurity Risks in the Healthcare Sector | Freshfields
6. Further AI-focused overhauls of medical device regulation
AI and other advanced technologies are driving intensified regulatory oversight, with increased dialogue between regulators and MedTech companies anticipated in 2025. The FDA’s Innovative Science and Technology Approaches for New Drugs Pilot Program signals continued support for AI-driven drug development, paving the way for more AI life sciences and healthcare innovations. Recent acceptance of Deliberate AI’s Clinical Outcome Assessment (AI-COA™)—an innovative AI-driven tool designed to assess anxiety and depression severity reflects this trend.
In 2025, the UK Department for Health and Social Care plans to expand its MedTech Innovation Classification Framework, and the Innovative Devices Access Pathway pilot, streamlining market entry for new AI-powered medical technologies. The Medicines and Healthcare Products Regulatory Agency (MHRA) is set to roll out its AI Strategy, adapting regulatory frameworks to better support evolving AI applications in healthcare and leveraging internal AI tools to enhance efficiency.
The EU’s European Medicines Agency will advance its 5-year AI workplan in 2025, focusing on implementing the EU AI Act, developing AI-driven regulatory tools, and fostering collaboration and training to enhance the safe and effective integration of AI technologies in medicine regulation. As global regulations expand, we expect MedTech companies to actively engage with regulators to ensure compliance, shape regulatory frameworks, and seize opportunities for innovation while managing risks.
7. Mitigating the risk of disputes involving “commercially reasonable efforts” clauses
Commercially reasonable efforts (CRE) clauses are ubiquitous in MedTech M&A, collaboration, licensing, and manufacture and supply agreements and were frequently litigated in 2024. We anticipate these disputes will persist in 2025. Such litigation arises, in part, from contractual ambiguities and occasionally opportunism—where one party compels another to undergo the often-burdensome process to demonstrate compliance with CRE obligations. Companies can mitigate the risk of such litigation by carefully drafting CRE terms, and documenting compliance with CRE obligations. When drafting, parties should decide between a subjective (company-specific) or objective (industry-wide) standard and specify the factors a party can consider when calibrating its efforts, including potential economic costs and benefits. When performing subject to a CRE clause, careful and consistent documentation of compliance with a CRE obligation can pay dividends by enabling the performing party to quickly and confidently respond to a threat of litigation by a counterparty.
8. Embrace of virtual care and direct-to-consumer models
Virtual care and direct-to-consumer (DTC) models are expected to grow in 2025, driven by rapid technological advancements and evolving consumer expectations. Pharmaceutical companies are leading the way with online platforms that allow patients to access medications directly bypassing traditional distribution channels and offering services like home delivery for treatments for COVID-19 and migraines. This shift reflects a broader trend of pharmaceutical and healthcare companies embracing digital health solutions to improve medication access and patient engagement.
Meanwhile, the virtual care market is transitioning to a "new normal" as major players such as Walmart, Optum, and Teladoc adjust their strategies. These changes indicate that, beyond behavioral health, consumers may no longer view telehealth as a complete substitute for in-person care. As the market matures, telehealth is becoming a vital complement to traditional care, and digital health companies must adapt to evolving consumer demand.
9. Harnessing the potential of generative AI
Generative AI is reshaping MedTech, driving breakthroughs in drug discovery, clinical trials and personalized patient care. Generative AI is increasingly enhancing the design of innovative therapies and is demonstrating its value to the drug discovery process. In clinical trials, generative AI is streamlining digital outcome assessments, significantly reducing the time and burden on sponsors and equipping life sciences professionals with actionable insights and enhance decision-making. Generative AI is also revolutionizing gene editing – such technology is capable of vastly improving gene editing precision and therapeutic antibody binding, taking a major step toward controlled, intentional protein design.
10. Global focus on AI safety and accountability
The regulatory landscape for AI in medical devices is evolving rapidly, with safety, transparency, and accountability at the forefront of global priorities. In the United States, the FDA is intensifying its oversight of AI and machine learning-driven medical devices, particularly through updates to its 510(k) clearance process and increased post-market surveillance. These developments are part of a broader effort to ensure that adaptive AI systems meet rigorous safety and performance standards.
In the EU, the AI Act (Regulation 2024/1689), which will be fully enforceable by August 2, 2026, will introduce stringent requirements for high-risk AI systems, including medical devices.
In the UK, Medicines and Healthcare products Regulatory Agency (MHRA) is working to adapt its medical device regulations to address AI-driven technologies, ensuring that AI as a Medical Device is regulated proportionately to its associated risks while maintaining global standards for safety, performance, and transparency.
In China, draft AI regulations that include mandatory labeling and metadata standards for AI-generated content are advancing, further pushing for greater transparency and accountability. As these global frameworks take shape, MedTech companies will need to navigate an increasingly complex regulatory environment.
***
The MedTech industry has demonstrated remarkable resilience in navigating uncertainty, and 2025 promises to be a pivotal year as the election supercycle concludes and AI regulatory frameworks become clearer. The evolving legal and regulatory landscape will remain central to MedTech innovation and strategy. Adopting a global, forward-thinking approach will enable MedTech companies to stay competitive and ultimately, deliver better outcomes for patients.
