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Devices inject $1 billion into economy

More than 230 medical device manufacturers in Massachusetts generate a payroll exceeding $1 billion. The essential products include instruments used in heart or cataract surgery, needles, metal parts used in arthroscopic procedures to repair a damaged knee or shoulder joint, pumps designed to regulate the flow of insulin to diabetics, and sutures to repair wounds. Most of the companies are clustered near Boston.

Unlike the better-known biotech industry, which is weighted with pharmaceutical companies and lengthy drug or genetic-product development phases, many medical devices are manufactured to meet specific demands and may more quickly navigate the federal Food and Drug Administration vetting process to reach the marketplace.

Massachusetts ranks second in the nation in per-capita payroll of medical device jobs, and third for industry employment per 1,000 people. Minnesota leads with 4.4 medical device jobs per 1,000, followed by Utah with 3.6 and Massachusetts with 3.2, according to a study by the University of Massachusetts.

“I've heard about cutbacks in the sector. Everything is affected by this recession,” says Alan Clayton-Matthews, who authored two studies. But the sector is doing well compared with others, he says.

A 2007 report by the university's Donahue Institute revealed that medical devices are a major contributor to the Massachusetts economy, with $8.3 billion in output, and 49,595 jobs directly and indirectly related to the industry.

Besides the industry jobs, layers of other firms contribute to the output, from engineering and legal consulting companies to subcontractors.

While the industry's products are shipped throughout the U.S., the largest overseas market is Western Europe, with 55.6% of exports in 2006, up 16.4% from 2004 to $1.2 billion.

The fast-growing South American market rose 26.2% over the same period, from $31.1 million in 2004 to $39.2 million in 2006, according to the Donahue Institute.

Also in 2006, 10% of all U.S. venture capital went to medical device firms, according to the Institute study. California's Silicon Valley received 38% of the capital, but Massachusetts snagged 11%, or $292 million.

Boston Scientific, based in Natick, Mass., is a major player, with 25,000 employees and 2007 revenues of $8.3 billion. In November, the company received FDA approval for a new catheter to help physicians treat artery disease that could lead to heart attack or stroke.

The ailing economy has not appreciably slowed demand for medical devices, says Doug Lawrence, general manager and vice president of BD Medical's ophthalmic division. “There is repeated demand for health care every year regardless of the economic cycle.”

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