Medical technology companies are facing mounting pressure to abandon the traditional linear product lifecycle. The shift is being driven by changes in regulation, procurement standards, and a growing focus on end-of-life responsibility. According to a Kearney report, three market shifts are forcing the industry to rethink how devices are designed and sold.
Decentralized care is straining waste management systems built around large hospitals. The global home healthcare market is projected to exceed $1.5 trillion by 2035, and remote patient monitoring is expected to reach $137 billion by 2033. In the United States, about 71 million people used remote patient monitoring as of 2025. Healthcare plastic waste already exceeds 2 million tonnes annually across major markets, and demand for disposables has more than doubled in the past 15 years.
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Shorter cycles for software-defined devices
Another factor accelerating the change is the rise of software-defined and artificial intelligence-enabled devices. When hardware cannot support new software demands, replacement cycles shorten. This creates stranded assets and higher costs for customers. The analysis argues that circularity—reuse, refurbishment, repair, and modular design—can offset these pressures while creating new revenue streams. Rather than functioning purely as a sustainability initiative, circularity is becoming a financial strategy.
Companies are looking to consumer-goods strategies for guidance. Razor handle and blade systems are often cited as a model where durable components stay in use while replaceable parts drive recurring purchases. Kearney recommends that medtech leaders quantify the financial case for circularity before the sustainability case. Designing products and packaging for modularity, disassembly, and upgradeability is a key step. Building reverse-logistics and remanufacturing supply chains is also necessary before scaling.
It is unusual to see a regulatory-driven shift function as a primary revenue generator. In the past, companies often viewed compliance as a cost center that reduced flexibility. However, the data suggests that controlling the asset through the entire lifecycle offers more stability than selling a device once and walking away. The ability to capture value from repair, refurbishment, and remanufacturing provides a buffer against the volatility of hardware replacement cycles.
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This approach allows firms to maintain a relationship with the customer beyond the point of sale, offering a more predictable revenue stream in a market increasingly focused on outcomes rather than units sold.
Competitive advantage in a new model
The report frames circularity as a competitive differentiator rather than a compliance exercise. Early movers can better serve cost-constrained health systems, support distributed care, and retain greater control over assets, materials, and customer relationships. As the industry shifts away from one-time capital sales toward service-led, data-driven business models, the companies that master circularity will likely lead the market.