10 Key MedTech Themes for 2026

The MedTech industry is entering 2026 at a pivotal moment. Regulatory complexities, geopolitical tensions, and persistent supply chain pressures continue to shape the sector. In this dynamic environment, companies are navigating deal-making and innovation spurred by the vertical integration of AI and a rebounding IPO market. Below, we explore 10 global MedTech trends poised to define the industry in 2026.

1. AI, IPOs, and strategic capital fuel the investing rebound

Investor enthusiasm for AI, the resurgence of the IPO market, and private equity’s focus on late-stage assets are driving MedTech funding in 2026. Startups leveraging AI attracted robust venture capital support in 2025, with digital health VC funding rising to $6.4 billion in H1, up from $6.0 billion in the prior year. Notable IPOs in 2025 signal renewed momentum and anticipation of further activity in 2026.

Although fewer deals closed in 2025, average deal size grew, reflecting capital discipline in an uncertain regulatory environment and investors’ preference for advanced asset pipelines. Corporate venture capital (CVC) is playing a decisive role, moving from passive funding to active strategic guidance. Minority stakes from CVC partners are increasingly essential milestones, shaping startups for future commercialization and serving as primary filters for the next wave of M&A targets.

2. Strategic risk allocation drives sophisticated deal structures

MedTech deal structures in 2026 will be defined by strategic prioritization and sophisticated risk allocation. With interest rates likely to remain above pre-2022 levels, large strategics and private equity sponsors are focusing on leverage discipline, favoring hybrid consideration (cash plus stock). 

Buyers are increasingly deploying mechanisms such as earnouts and contingent value rights (CVRs) that address valuation gaps, particularly for high-potential, pre-commercial assets. Multi-tranche payments linked to specific regulatory hurdles are more likely to be seen in place of simple revenue-based milestones. This approach will allow buyers to de-risk the uncertainty inherent in MedTech innovation while allowing sellers to realize the full value of their breakthroughs upon successful execution. 

Meanwhile, transactions involving complex businesses or non-core units are increasingly structured as carve-outs, joint ventures, and minority investments — granting access to technology and data while minimizing integration burdens.

3. Life sciences licenses and collaborations: High value meets caution

License and collaboration activity surged in 2025 and is expected to continue into 2026, especially among major pharmaceutical companies eyeing next-generation therapies. China remains an important source of early-stage pipeline assets, supported by increasing Hong Kong Stock Exchange listings and strengthened R&D partnerships in obesity and diabetes therapeutics. Payment structures vary: biopharma deals typically include large upfront payments to fund the highly capital-intensive work, whereas MedTech licenses lean toward more milestone-driven  economics. This diversity reflects industry enthusiasm for emerging technologies balanced by careful risk management.

The European MedTech M&A landscape is fundamentally shifting from outright acquisitions to strategic collaborations. Regulatory complexity — driven by the Medical Device Regulation (MDR) and the AI Act — and escalating costs of developing specialized digital solutions in-house, are prompting large corporates to pursue capital-light routes to innovation. Strategic joint ventures and alliances, particularly with AI specialists and technology providers, are becoming the preferred approach. These deals are structured to share regulatory burdens and integrate data capabilities, building collaborative digital ecosystems rather than simply acquiring assets.

4. Portfolio optimization through strategic carve-outs

Carve-outs are becoming a central element of MedTech corporate strategy as companies strive for portfolio optimization in 2026. Recent landmark separations — such as GE’s spin-off of GE HealthCare and 3M’s launch of Solventum — set a precedent for unlocking shareholder value, addressing the classic ‘sum-of-the-parts’ valuation discount where focused pure-play companies command higher multiples – and freeing capital to invest in growth areas like AI, robotics, and digital health. 

Private equity is expected to fuel this activity, acquiring carved-out assets as leaner parent companies pursue aggressive innovation and newly independent entities, often PE-backed, will emerge as new players, eager to scale their business through bolt-on acquisitions in their more highly-focused markets. This dual momentum promises greater deal diversity and a reshaped competitive landscape.

5. Persistent antitrust scrutiny

Regulators worldwide remain focused on antitrust in MedTech, anticipating heightened scrutiny in 2026. Concerns related to market concentration, data access, and the competitive implications of AI-driven healthcare solutions are front and center. The integration of generative AI and machine learning into diagnostic tools and digital health platforms could risk amplifying existing concerns about data-driven market power, particularly where exclusive access to high-quality patient data could create barriers to entry. 

The implementation of the EU AI Act and similar laws globally introduces new compliance obligations, including transparency and data-sharing requirements that may intersect with competition law enforcement. Furthermore, there remains ongoing skepticism towards strategic M&A activity and partnerships, particularly those involving early-stage targets, data assets, or adjacent digital capability. 

Taken together, these developments position MedTech at the potential forefront of regulatory attention. MedTech companies must conduct proactive antitrust risk assessments and establish robust governance structures to mitigate enforcement exposure.

6. New US data security program redefines global data transfers

Cross-border data transfers continue to evolve with significant developments in the US with the implementation of the Department of Justice’s Data Security Program (DSP), enacted under Executive Order 14117. Having come into effect in 2025, the DSP bars or heavily restricts the transfer of sensitive US personal data — covering health and genomic information — to “countries of concern” such as China, Hong Kong, and Russia and covered persons under those jurisdictions. 

Many in the privacy community view these new cross-border prohibitions and restrictions as significantly impacting the MedTech and Life Sciences sectors in particular, given that several of the sensitive data categories focus on health data, such as biometric identifiers, biospecimens, and human ‘omic data. The NIH also published a new policy on biospecimen transfers, which is drafted to align with the executive order. Robust enforcement is anticipated, and affected companies should actively monitor evolving compliance and privacy standards.

7. Tariffs and regulatory uncertainty heighten contractual tensions

Evolving tariff regimes and increasing regulatory pressures in 2025 have significantly added tension in MedTech collaborations. Contractual provisions such as force majeure and material adverse change (MAC) clauses are being tested in ways not seen since the pandemic. MedTech companies are increasingly considering tariffs, regulatory changes, supply chain disruptions, and inflated costs as factors that can make certain contractual performances economically impracticable. 

To mitigate litigation risk, MedTech companies should consider proactively engaging counterparties to renegotiate pricing mechanisms or delivery timelines rather than waiting for disputes to arise. When drafting new agreements or amending existing ones, parties should consider explicitly addressing tariff pass-through provisions, including specific language covering government trade actions in force majeure clauses, and clearly defining MAC triggers related to regulatory changes. Early, transparent communication and thorough documentation of changed circumstances remain critical to preserving commercial relationships while protecting legal rights in this volatile environment.

8. Trade landscape and its impact on MedTech in flux 

Tariffs and geopolitical uncertainty have defined the 2025 trade landscape in the MedTech space. Invoking emergency economic authority, the Trump administration imposed sweeping tariffs that apply new customs duties on most imports into the United States, with variable rates depending on country of origin. These emergency-powers-based tariffs have been challenged in an ongoing US Supreme Court case. 

In addition to these near-universal tariffs, the MedTech industry faces supply chain exposure to the financial burden of new or newly increased national security-based tariffs in sectors like copper, aluminum, and steel. Previously-scheduled increases of tariffs on key medical industry inputs and supplies such as masks, syringes and needles manufactured in China took effect in 2025 as well. US government investigations into potential national security risks posed by imports of personal protective equipment, medical consumables, and medical equipment; semiconductors; and pharmaceuticals and pharmaceutical ingredients raise the possibility of additional tariffs on these goods. 

Against this backdrop, the Trump Administration has created exceptions to its sweeping tariffs through bilateral trade deals and even through company-specific arrangements in the pharmaceutical space, creating both opportunity and uncertainty for business strategies in the MedTech industry. These changes have led some companies to treat tariffs as a recurring business cost and others to actively modify or diversify their supply chains to mitigate financial strain and operational uncertainty. We expect this volatility to continue in 2026, as the Trump Administration’s trade policy continues to unfold.

While the MedTech industry is expected to be more robust in 2026, success in the landscape will ultimately be defined by a company’s ability to harness the momentum from technological innovation and strategic investment while adeptly managing the significant risks posed by a rapidly evolving global regulatory and geopolitical environment.

9. Supply chain disruption and the BIOSECURE Act

The passage of the BIOSECURE Act as part of the FY2026 National Defense Authorization Act marks a watershed moment for MedTech and Life Sciences companies operating in the US and globally. Designed to mitigate national security risks, the Act prohibits federal agencies and contract recipients from procuring equipment and services from biotechnology companies of concern, principally those tied to Chinese military interests — now defined through the Department of Defense’s annually updated Section 1260H list and a new Office of Management and Budget (OMB) designation process. 

The revised legislation replaces earlier, more rigid proposals that targeted named entities with a dynamic listing mechanism, offering procedural safeguards and a five-year transition window for phasing out legacy contracts — except for companies on the Section 1260H list. Critically, the law’s broad definitions and short grace period will require active monitoring of supplier relationships and de-risking of manufacturing processes. As the decoupling deadline looms and reliance on Chinese CDMOs and innovators remains high, companies will need to balance opportunities for pipeline growth in China with the operational and regulatory complexities posed by the Act. 

In 2026, MedTech players should expect greater scrutiny of their supply chain, data flows, and strategic partnerships, and proactively engage with US authorities to navigate designations, secure waivers, and support seamless market access amidst this evolving legislative landscape.

10. Global divergence in AI regulation

The AI regulatory landscape is expected to be marked by a transatlantic divergence. The US will likely grapple with tension between sector-specific oversight and cross-cutting AI policy, as FDA guidance and growing scrutiny of limited clinical and post-market evidence put pressure on AI medical devices, while the Executive Order on a “National Policy Framework for Artificial Intelligence” seeks to centralize regulation and challenge more restrictive state AI laws. 

This mix is expected to preserve an innovation-friendly environment for AI but introduce uncertainty for MedTech companies around conflicting obligations on transparency, disclosures and algorithmic bias. State anti-discrimination mandates are being increasingly challenged by a federal strategy that frames some state-required model adjustments as compelled deception or unconstitutional interference with “truthful outputs.” 

In the EU, the Artificial Intelligence Act (Regulation (EU) 2024/1689) will take another step from principle to practice as it is scheduled to widely apply by August 2, 2026. The EU AI Act in its current form will also affect MedTech companies as most AI-powered medical devices fall under the regulated category of so-called “high-risk AI systems” with relevant obligations currently applying as of August 2, 2027. 

However, significant legislative changes delaying and potentially limiting the regulatory burden (in particular on MedTech companies) are on the horizon. The EU Commission has proposed postponing the end of the current transition periods in its Digital Omnibus on AI proposal and, most recently, has proposed reducing and simplifying rules on medical devices, which would, among other things, limit obligations for medical devices qualifying as “high-risk AI systems” under the AI Act. 

For the global MedTech industry, 2026 will be a critical period to closely monitor the proposed legislative changes in the EU and the evolving US federal-state dynamics, invest in integrated quality and risk management systems, and strengthen clinical validation by leveraging new pre-market testing and data-use allowances.

Source: metamorworks, Getty Images

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