Increasing competition and budgetary pressure on the provider side are the biggest challenges facing the medical technology industry in Europe. Joerg Kruetten and Carlos Meca discuss the findings of a new industry survey.

Nobody would dispute that the medtech industry is a bastion of strength compared to many other industry sectors in the current economic turmoil. With an ageing population and an increasing prevalence of chronic and prosperity-related diseases, the EU market for medical technology products is and will continue to be a key place for the industry, with growing demand for efficacious and efficient prevention, diagnosis and treatment methods. The industry’s overall business expectations for 2011 are positive.

Rising pressure

However, a second and deeper look at the EU markets shows that the environment has become significantly more challenging in recent years. Stricter reimbursement controls by payers, which increasingly often are bound up with health technology assessments and/or case-based funding across the EU, are putting significant budgetary pressure on caregiver institutions. In response to cost pressures, many caregivers are focusing on the procurement side as a comparatively easy area to cut operating costs. This has increased the influence of procurement departments and reduced the influence of clinical staff on product and therapy choice.

In recent years, the focus on cutting procurement costs has also led to a high and growing prevalence of different forms of pooled purchasing in the EU member states through private provider chains, group purchasing organisations, national or regional public tenders or international distributors.

As a result of these developments, the industry is facing increasing price pressure and business risks as well as decreasing customer commitment and room for competitive differentiation. The impact of these procurement trends, however, largely varies with the complexity and maturity of a product or product category. Whereas purchasing department influence and pooled purchasing are very common for simple medical supplies, they are less prevalent with new and complex surgical procedures or capital equipment, where the purchasing/adoption decision is still predominantly influenced by the clinical and technical staff at the institution level.

Low-cost competitors

A second unfavorable trend for established industry players is the emergence of new low-cost competitors, threatening their market position with good-quality and predominantly me-too products at very attractive price points. These low-cost companies strongly embark on the trend of caregiver institutions focusing on cutting procurement costs. Compared to established players that are driven strongly by innovation and have high R&D as well as sales and marketing expenditures, the new competitors follow different business models. Three types of new low-cost competition can be observed in the EU marketplace:

• Asian ‘broad liners’ who are still focused on R&D but benefit from lower personnel costs, scale on the procurement side, favorable currency fluctuations and lean sales and service models.

• ‘Copycats’ who are copying established products by intelligently circumventing existing patents, and are comparatively small in size and lean on the administration and sales side.

• ‘One-stop-shop’ distributors who benefit from procurement and sales scale and offer their own private label products in addition to established brands.

Besides these new competitors, further low-price competition can be found among established players who offer basic and/or mature products at high discounts to protect the remaining part of their business or offer a low-price product/brand alternative to their premium product by keeping an old-generation product on the market.

Major firms face trouble

These market trends were largely confirmed by the MedTech Barometer 2011, an industry survey conducted by global strategy and marketing consultancy Simon-Kucher & Partners. More than half of the 70 respondents, who are senior decision makers in globally leading medical technology companies with European business responsibility, stated that tight budgets on the customer side and increasing price competition are the biggest commercial challenges they currently face in the European marketplace.

The respondents saw a clear mid-term trend in Europe of increasing competitor price aggression in the fight for higher market shares. On the customer side, there is a clear expectation that purchasing department influence and the pooling of purchasing power will strengthen in the coming years.

60% of the respondents expect a ‘tighter to much tighter’ reimbursement and funding environment in the future, driven by the uncertain fiscal climate and forecasted revisions of reimbursement prices and rates in the EU member states. Close to 60% expect overall market prices to be ‘worse or much worse’ in the near future.

In response to these unfavorable commercial trends, the surveyed managers give first priority to increasing sales force effectiveness in order to deal with consolidation of buying centers and non-clinical procurement stakeholders. The second stated priority is the launch of new and enhanced products and services to increase competitive differentiation. In terms of other business goals, winning competitor accounts and increasing market share were prioritised over raising prices or slowing down price erosion.

50–60% of the respondents mentioned that they already face strong pressure from low-cost competitors and that this pressure is expected to increase in most sectors. The diagnostics sector in particular has been heavily exposed to low-cost competition: all respondents representing this sector have already been affected. Whereas the equipment and supplies sectors expect pressure from low-cost competition to increase, the device side expects the pressure to remain significant but stable.

Increasing innovation, enhancing customer service and processes, and better customer segmentation and prioritisation are believed to be the most effective responses to low-cost competition. Very few respondents believe that trying to match the price points of these competitors by reducing their own prices or introducing low-cost offers/brands is a commercially viable option.

Ready for the fight

In summary, the political framework and the demographic developments will continue to make Europe an important, growing and innovation-friendly market environment for medical technology products in the foreseeable future, despite the ongoing economic turmoil. However, the market climate for established industry players has and will continue to deteriorate due to stricter reimbursement controls and increasing purchasing professionalism and power on the customer side coupled with consistently strong and increasing competitive dynamics.

Despite the commercial challenges that established players in Europe are facing, the business outlook for the coming year remains positive. The respondents across the different sectors expect their operations to grow by 5–10% in terms of revenue, with device and diagnostics companies expecting the highest growth rates. At the same time, the surveyed companies expect to increase their market shares moderately in the area of 3%. The companies’ average selling prices are expected to remain stable. In essence, new product launches are compensating for price erosion among established products.

With increasing budgetary pressure at the payer level and economic uncertainty in the EU member states, it is however very likely that the commercial climate in the medical technology sector will deteriorate further. Stricter reimbursement controls, health technology assessments and cost-cutting pressure on the provider side, combined with strong competitive dynamics, will further increase pressure on prices and margins; the adoption of new products and technologies is likely to slow down. The automatism of continuously compensating for negative developments among established products with new product launches may come to an end at some point.

A lot will depend on maintaining innovation, and the European market is sure to remain an innovation-friendly environment. Companies that launch true innovations with convincing clinical and/or health economic benefits will continue to have great market opportunities. Still, the vulnerability of companies that only launch regular gradual improvements of existing products and companies with a high exposure to very mature product categories will continue to increase. The long-term success of established players in the European marketplace will largely depend on having a strong innovation pipeline and controlling the price erosion of established products.

Strategies for success

Long-term business success in Europe will thus require strategic and tactical adaptations by established firms. European medtech companies are still in general very R&D-orientated. Successful innovation will be key to developing competitive differentiation and limiting the exposure to increasing price pressure. However, European companies – which are often extremely good at selling technical and clinical benefits to clinical users and technicians – need to become better at selling clinical and health economic benefits to commercially-driven purchasers.

This means focusing primarily on the following areas:

• Prioritising and steering R&D projects early on according to reimbursement and price potential.

• Producing better clinical and/or health economic evidence to support positive reimbursement and adoption decisions when launching new products.

• Resources, skills and engagement models for interacting effectively with national or regional payers, as well as procurement managers and financial administrators.

• Balancing market share and profitability goals, differentiated by business area and according to a product’s life cycle stage and the level of competition.

• Offering service support areas to payers and providers that measurably help to drive their organisational efficiency beyond simple price cuts.

• Offering new and intelligent contract models to providers that limit upfront investment burden or ensure budget compliance while securing customer commitment.

• Pursuing a structured and defendable pricing policy rather than making opportunistic and spontaneous pricing decisions.

A management summary of the MedTech Barometer 2011 is available on request. Please contact Claudia Schulz at Simon-Kucher & Partners: claudia.schulz@simon-kucher.com, tel. +49 228 98 43 372.

Joerg Kruetten is Executive Vice-President at Simon-Kucher & Partners, a global consulting firm focused on Smart Profit Growth, and is head of the company’s international medical technology competence center. Dr. Carlos Meca is a senior consultant at Simon-Kucher & Partners.

As the PCTs form clusters from which the Clinical Commissioning Groups will hatch, a new generation of NHS commissioners is being born. Thoreya Swage examines how medtech can help these new customers to redesign services.

Irrespective of the progress of the Health and Social Care Bill currently going through the House of Lords, the momentum of reform of the NHS in England continues to gather pace.

Following a four-month hiatus while the wise and the good of the NHS Future Forum pondered and produced recommendations for the adjustment of the Bill, the Department of Health published further guidance on the developing role of the PCT Clusters. Although the 151 Primary Care Trusts have been squeezed into 51 PCT clusters in preparation for their demise in April 2013, it appears that they have a vital part to play in the development of the emerging Clinical Commissioning Groups (CCGs).

The guidance or ‘shared operating model’ for PCT clusters has been produced by the mandarins at the DH to ensure that the commissioning landscape is as consistent and smooth as possible in time for the takeover by the CCGs. This is to ensure that the nascent NHS Commissioning Board inherits a robust enough system to take charge of further developments and improvements in healthcare in early 2013.

The shared operating model identifies six main functions or ways of working, where consistency of approach is considered to be important. They are listed as commissioning development, financial and operational issues, ensuring quality, emergency planning, development of providers as Foundation Trusts and communications.

CCG commissioning development

The most important function of the PCT clusters is the preparation of CCGs for authorisation as soon as possible following the successful passage of the Health Bill through Parliament. The process of authorisation to become fully-fledged commissioners is due to begin in the second half of 2012. Although this is a year away, CCGs can commence their preparations now using a self-diagnostic tool: an interactive computer-based assessment that helps them to determine their capabilities and identify their development needs. The areas covered include:

• A clear clinical focus for the CCG commissioning plans to include tackling health inequalities and improving primary care.

• Demonstration of meaningful involvement of patients and the wider community.

• A plan for development that is clear and credible and that, in particular, delivers the QIPP (quality, innovation, productivity and prevention) agenda.

• Capacity and capability of the CCG, i.e. robust constitutional and governance arrangements that enable the CCG to commission care effectively and ensure financial control.

• Collaborative arrangements for working with other CCGs, local authorities and the NHS Commissioning Board.

• Capacity and capability of the CCG leadership, which ensures effective working.

The tool helps the CCGs to identify priority development areas, which form the basis of the developmental plan paving the way to full authorisation.

To support all this work, CCGs will receive £2 per head from the PCT clusters, as well as extra management resources to help the groups hone their commissioning skills and capabilities.

CCGs experiencing difficulty in defining their boundaries will have guidance from PCT clusters on how to resolve this. PCT clusters also have the unenviable task of engaging the reluctant practices that so far have not participated in their local CCG discussions, with the aim of making them part of a viable CCG by October this year.

Separation of functions

Through the last quarter of this year, a detailed exercise is being carried out by the PCT clusters to identify and segregate the service areas that CCGs and NHS Commissioning Board will be responsible for.

Although the CCGs will be commissioning acute, mental health, community and ambulance care, other services that PCTs currently commission will need to be transferred to the umbrella of the NHS Commissioning Board:

• GP and other primary care contractor groups (primary care dental, pharmacy and optical services)

• secondary dental care

• prison, specialised and military health services.

Even though the contracts for GP services are held by another body, the CCGs are expected to have an input into primary care development and improvement.

Quality assurance

A vital component of the commissioning process is ensuring the quality of healthcare. Practices may have been involved to a greater or lesser degree in various quality assurance processes in the past; however, CCGs are required to take these responsibilities seriously on board.

There is a whole raft of procedures and measures including delivery of better health outcomes for patients, meeting the Care Quality Commission (CQC) requirements for safety and quality of services, standard contracts, the NHS Operating Framework, professional guidance and other relevant requirements that CCGs need to get to grips with.

This could potentially be a vulnerable time for the development of the CCGs if attention wanders and serious patient safety incidents are not acted on promptly. Clinical governance processes must therefore be extra-secure.

Budgets and responsibilities

Over the next year or so, there will be a period of dual functioning and handover as the CCGs mature and the PCT clusters delegate more and more responsibilities until April 2013. The handing over of the baton has started now, with PCT clusters having identified a ‘clear percentage of budgets’ to CCG pioneers or pathfinders in August and set plans for future delegation of budgets in October.

Sandwiched in between these two was the agreement in September on which mental health and community services will be subject to ‘Any Qualified Provider’ (AQP). This policy is set to be implemented from April 2012, when GPs can refer to providers of certain services eligible for AQP from a list of approved organisations, including private sector companies, drawn up by the DH.

A review of the commissioning support required by CCGs was undertaken in July, with clear arrangements to be agreed by the end of this year.

In March 2012, CCGs will be required to enable the development of the local health and wellbeing boards (the mechanism for joint health and social care planning and local commissioning) supported by their PCT clusters.

Meanwhile, individual PCTs will continue to carry out their statutory functions through the PCT clusters until their abolition in April 2013. The statutory functions include contract monitoring, ensuring that providers meet their QIPP obligations, and other statutory requirements such as safeguarding children and vulnerable adults.

The big challenge for CCGs begins when they are required to lead the next planning round for 2012/13. This will start towards the end of this year, and is a function previously undertaken by the PCTs. It involves doing a needs analysis, identifying local inequalities, understanding demand and resources for local services, negotiating and setting priorities with partners, and developing a local strategic vision. Handover of commissioning functions will continue, with CCGs being an active participant in the subsequent contract negotiations and agreements.

How medtech fits in

It is apparent that despite the pause for reflection on the proposed changes in the English health service earlier this year, the momentum of dissolving and restructuring healthcare organisations continues. The picture remains a little confusing, however, as CCGs are in varying stages of development and maturity and it is not clear that all are now truly viable although the October deadline has passed.

What is clear is that that the work of commissioning and delivering healthcare has to go on, and now is a good time to find out who the key movers are within the CCGs. At this point the developmental needs of CCGs are uppermost, and it is here that medtech companies can provide some input. Skills and knowledge in leadership development and highlighting evidence-based medical technologies that really make a difference are two key areas of potential input.

CCGs will be keen to redesign services in order to make patient pathways across primary and secondary care more consistent and to move more care into the community setting. It is here that telehealth and telecare will come into their own as a means to facilitate the transition.

Demonstrating the effectiveness of home monitoring of blood pressure, supporting community services such as HIV or stoma care, and promoting medical devices that offer continuous subcutaneous infusion of insulin are examples of technology implementation where a vital case can be made to these prospective healthcare commissioners. CCGs will also look favourably on management of their patients in the surgery with video links to consultants for advice, rather than sending them to outpatient services.

Clinical services that utilise new or different medical technologies will require staff who are appropriately trained and have the skills and competencies to use the equipment. This training can be provided by the medtech industry.

As ever, good information forms the basis of good commissioning and the demonstration of successful patient outcomes. Data systems in the community setting have always lagged behind their counterparts in the acute setting. Given that CCGS will need to develop services in the community, new and better IT systems will be required.

Get ready!

The next few months will be busy while the NHS sorts itself out at a structural level. Once the picture begins to clear, the medtech industry will need to engage with the new clinically skilled commissioners who now have the financial responsibility for making decisions about healthcare.

Dr Thoreya Swage was formerly an NHS clinician and a senior manager in various NHS organisations covering acute and primary care. She has expertise in commissioning health services and is currently working for a number of NHS organisations, including DH agencies, to develop a more commercial approach to the commissioning of healthcare.

The NHS Technology Adoption Centre (NTAC) has launched a new online system to help NHS and private health providers adopt proven medical technologies more quickly and effectively.

The new Generic Adoption Process (GAP) provides a detailed roadmap of the adoption process and access to the tools and resources needed.

GAP builds on the experience of NTAC’s Technology Implementation Projects over the past four years in improving the diffusion of proven medical technologies across the NHS.

Users of the GAP website are encouraged to navigate through each of its sections in order, thereby building relevant knowledge – however, they are free to navigate between sections as they wish.

The site is designed for use by health providers at all stages of the technology implementation process.

Sally Chisholm, CEO of NTAC, commented: “GAP has been tested by a number of key stakeholders from the NHS and industry. We believe this is a vital tool which will help drive widespread adoption of proven technologies, as GAP can provide unrivalled knowledge and information to those who do not choose to directly engage with NTAC on an implementation project, for example.

“The idea for GAP came from our recognition that there is a clear need for something which can equip clinicians, managers and other key stakeholders crucial to service development with the tools and resources they need to be able to drive change and innovation throughout the NHS.”

NTAC takes the view that the NHS often fails to adopt innovative medical technologies whose clinical and economic value is proven due to a lack of well-resourced and coordinated adoption pathways.

GAP is available at http://www.ntac.nhs.uk/GAP/GAP_Home.aspx

Medtronic has launched its T2 Altitude expandable corpectomy device for spinal stabilisation and correction worldwide.

The expandable vertebral body replacement cage features a self-locking mechanism that removes the need for placing a set screw during surgery, using bone graft to create contact to encourage fusion with the device.

Doug King, Senior Vice President and President of Medtronic Spinal, said that the new product demonstrates the company’s “long-term commitment to therapies for complex spine disorders for spinal tumour, trauma and deformity patients”.

Cancer patients can also benefit from the product. If the cancer has spread to the spine, the surgeon may replace the affected vertebrae with the T2 Altitude device.

More than 150,000 spinal fractures occur in North America every year, of which approximately 11,000 are spinal cord injuries.

Based in Memphis, Medtronic Spinal provides advanced treatment through the collaboration with surgeons and researchers to offer affordable, minimally-invasive products and medical technologies for neurological, orthopaedic and spinal conditions.

John Wilkinson (pictured), Chief Executive of Eucomed, has received a special Career award from the International Vascular and Endovascular Course (IVEC) in Milan.

The award recognises the medtech industry’s contribution to the development of vascular and endovascular surgery.

IVEC Chairman Giorgio Biasi presented the award to John Wilkinson to “honour the excellence of a distinguished scientist and eminent colleague who has contributed enormously in promoting, divulging and spreading culture, development and achievements in the field of vascular and endovascular techniques.”

Following the award presentation, Wilkinson gave the Edmondo Malan Lecture on ‘Development and Achievements in Endovascular Procedures as a Result of a Continuous and Ingenious Co-operation between Physicians and Industry’.

He discussed the long history of collaborative working between clinicians and industry over 200 years, with ideas from doctors and surgeons being developed by companies, culminating in such revolutionary devices as the drug-eluting stent.

Wilkinson also emphasised the need for innovation to be built on a platform of ethical interaction and transparency, and for industry to support education and training in the delivery of new therapies.

Finally, he drew attention to the demographic and economic challenges facing Europe’s health systems, and called for a collaborative approach between all stakeholders to support innovative solutions to these urgent problems.

Eucomed is the leading European medical technology industry association. It represents 4,500 designers, manufacturers and suppliers of medical technologies.

The FDA has given fast-tracked approval for a new microstent treatment for patients with brain aneurysms.

The Pipeline device from US-based Chestnut Medical Technologies is a bimetallic microstent with a braided structure that disrupts blood flow within the aneurysm neck, helping to preserve the artery.

The Agency has limited the use of Pipeline to aneurysms in the internal carotid artery, the major blood vessel supplying blood to the front of the brain.

Aneurysms occur when blood vessel walls weaken. Over 25,000 people in the US experience haemorrhages from a burst aneurysm every year, of which about 40% are fatal.

The Pipeline has a braided netting with 48 strands woven together. Introduced into the artery through a microcatheter, the Pipeline covers the aneurysm neck and reduces the flow of blood into it.

The trapped blood in the Pipeline clots, preventing the aneurysm from growing or rupturing.

They can be present for years without giving any symptoms, but the threat is that they will burst, which can be lethal.

Michael Marks, Chief of the Interventional Neuroradiology Department at Stanford Hospital, the first hospital in Northern California to offer the therapy, said: “We know that the device is safe in certain anatomy.

“As we learn more, there may be additional applications for a device like this. But our focus right now is treating those patients that we’ve had no good treatment for.”

A neurostimulation device that offers sufferers from obstructive sleep apnoea (OSA) an alternative to continuous positive airway pressure (CPAP) therapy has gained CE Mark approval.

The Hypoglossal Nerve Stimulation (HGNS) system from US company Apnex Medical has been approved for sale in Europe based on the results of clinical studies in the US and Australia that showed the device to reduce the symptoms of OSA.

OSA – an inability to breathe during sleep – is estimated to affect 100 million people worldwide. It causes excessive daytime fatigue and increases the risk of stroke, heart disease and death.

CPAP therapy is the current standard for OSA, but many patients cannot tolerate it or comply poorly with it. The HGNS system offers a radically different approach: an implantable therapy that activates the muscles in the upper airway.

Implanted in the shoulder, the HGNS system measures the patient’s breathing during sleep and delivers mild electrical pulses to the hypoglossal nerve (which controls the tongue) to keep the airway open.

The system can be programmed to operate only when the patient is asleep, or be turned on and off with a hand-held switch.

The Apnex Clinical Study, a randomised clinical trial, is ongoing in the USA, Europe and Australia. It is designed to test the safety and effectiveness of the HGNS therapy in patients with OSA in whom CPAP therapy has not been effective.

“CE Mark approval is an important confirmation of the substantial benefits that patients receive from our HGNS therapy for obstructive sleep apnoea and is a key milestone for our company,” said Chas McKhann, President and CEO of Apnex Medical. “We are excited to bring this innovative new therapy to Europe.”

Based in Minnesota, USA, Apnex Medical specialises in innovative therapies for sleep-disordered breathing.

France is Europe’s biggest importer and exporter of medical devices. However, current reforms are driving cost reduction and efficiencies. Medtech Business in association with Espicom takes a look at the French market for medical technologies.

France is one of the top five medical device markets in the world, accounting for around 3.9% of the global market.* Within Europe, the market ranks behind Germany and is a similar size to that of the UK.

The country has a well-developed healthcare system, combining public hospitals with commercial clinics that are the main providers of elective surgical treatment. While the public sector is the largest purchaser of most diagnostic and therapeutic equipment, the private sector is the dominant purchaser of surgical equipment and supplies.

The high level of healthcare expenditure (11.8% of GDP) and the substantial health deficit are major concerns that have prompted various reform programmes aimed at curtailing costs and improving efficiency in the healthcare system. For this reason, the medical market is only likely to see moderate growth, rising from US$8.3 billion in 2011 to US$9.8 billion by 2016.

Despite several high-profile investment programmes, France continues to lag behind its European neighbours in some high-technology fields, most notably imaging and radiotherapy equipment. A second five-year cancer plan has now been launched which aims to increase the numbers of scanners.

With flagging domestic production in several sectors the French medical device market is increasingly reliant upon imports, which now account for around 80% of consumption. However, many imported products are re-exported to other countries.

 

The market in 2011

In 2011, the French medical device market (see Figure 1) is valued at US$8,280 million. Consumables is the largest product category, accounting for 20.9% of the overall market, followed by diagnostic imaging (19.8%).

Espicom estimates that the medical device market will grow at an average annual growth rate of 3.5% between 2011 and 2016 – bringing the total market value to US$9.8 billion by 2016.

Orthopaedic and prosthetic devices are expected to continue to be the most dynamic sector of the market, with growth forecast to be more than double the rate for the overall market. Conversely, diagnostic imaging is forecast to have the lowest growth during the 2011–16 period.

 

Predictions for market segments

Figure 2 shows Espicom’s predictions for the major segments of the medical device market.

1. Consumables. The market for medical consumables is estimated at US$1,729 million. The consumables market grew at an annual rate of 5.1% in US dollar terms between 2006 and 2010. Imports supply the greater part of the market. Espicom estimates the consumables market will continue to grow by an average of 3.5% over the next few years.

The wound care products market is forecast to grow at an average annual rate of 2.9% in US dollar terms during the 2011–16 period. Syringes, needles & catheters has been the fastest growing sector of the consumables market and will continue to be, with a CAGR of 4.1% to 2016.

2. Diagnostic imaging apparatus. The market for diagnostic imaging is estimated at US$1,636 million. The market grew at an annual rate of 2.8% between 2006 and 2010. France lags behind its European neighbours in the diagnostic imaging field, though the second cancer plan aims to increase provision of MRI, CT and PET scanners.

Imports supply the greater part of the market, though their market share is lower for radiation apparatus due to the strength of the domestic manufacturing industry. The USA and Germany are the major sources of supply. Espicom estimates that the imaging market will grow by an average of 2.1% between 2011 and 2016.

3. Dental products. The market for dental products is estimated at US$859 million, equal to 10.4% of the total medical device market. The dental products market grew at an annual rate of 4.2% between 2006 and 2010. It is forecast to grow at an annual rate of 3.5% over the next few years, taking the total to US$1,020 million by 2016.

4. Orthopaedic & prosthetic devices. The market for orthopaedic & prosthetic devices is estimated at US$1,336 million, equal to 16.1% of the total medical device market. The orthopaedic & prosthetic devices market grew at an annual rate of 9.2% between 2006 and 2010.

Imports have seen particularly high growth in recent years, though a corresponding increase in exports in this sector indicates that not all imported products are destined for the domestic market. The majority of orthopaedic imports are supplied by Switzerland and the USA.

The orthopaedic & prosthetic devices market is forecast to grow at an annual rate of 6.1% in US dollars over the next few years, taking the total to US$1,794 million by 2016.

5. Patient aids. The market for patient aids is estimated at US$1,131 million, equal to 13.7% of the total medical device market. The patient aids market grew at an annual rate of 4.5% between 2006 and 2010.

French imports of patient aids far exceed the value of the domestic market due to a high level of re-export activity, particularly for pacemakers. Switzerland and the USA are the leading suppliers of portable aids, whilst the USA and China are the major sources of supply for therapeutic appliances.

The patient aids market is forecast to grow at an annual rate of 3.9% over the next few years, taking the total to US$1,367 million by 2016.

 

Imports

The value of French medical device imports has recorded a steady rise over the past decade, reaching US$10.4 billion in 2008 before falling back to US$10.3 billion in 2009.

Imports of consumable items amounted to US$1,780.6 million in 2009. Imports fell by 1.0% over 2008 in US dollar terms (though they increased in euro terms). Syringes, needles, catheters & cannulae are the largest subcategory.

Diagnostic imaging imports totalled US$1,564.0 million in 2009, equal to 15.2% of the total. This was the weakest performing category in 2009, with a fall of 16.4%.

Imports of orthopaedic & prosthetic devices were worth US$1,549.1 million in 2009, equal to 15.1% of total medical device imports. This was the fastest growing category in 2009, with a rise of 26.6%. All three subcategories – artificial joints, orthopaedic appliances and other artificial body parts – recorded strong growth.

Patient aids are the largest import category, with imports worth US$2,624.1 million in 2009, equal to 25.5% of total medical device imports. Pacemakers accounted for 54.7% of imports in this category in 2009, but also accounted for more than half of patient aid exports.

The leading suppliers of French medical imports in 2009 were the USA, Switzerland and Belgium, with the UK ranking eighth as a supplier with imports worth US$288,964 (2.8% of the total).

 

Exports

In 2009, medical device exports registered a 3.0% fall in value to US$9.2 billion, having recorded steady growth in previous years with a CAGR of 6.8% for the 2005–2009 period.

In 2009, 69.5% of all French medical device exports were sent to the rest of the EU, with the Netherlands taking a 17.6% share, followed by Germany with 14.4%. The UK took 6.6% of French medical device exports.

Outside Europe, the leading destination is the USA, which accounted for 9.1% of exports. The USA is the leading destination for French exports of diagnostic imaging apparatus.

Next month, Medtech Business will look at the medical technologies market in Germany.

This article is based on information from Medical Market Outlook reports published quarterly by Espicom Business Intelligence. *All figures are in US $. For further details of the 66 markets covered, please visit www.espicom.com/outlookm1

Healthcare giant Abbott plans to split into two companies: one in diversified medical products and the other in research-based pharmaceuticals.

The diversified medical products company will include medical devices, diagnostics, nutrition and generic drugs, and will retain the Abbott name.

The research-based drug company will cover Abbott’s existing portfolio of proprietary pharmaceuticals and biologics.

Abbott’s cardiac stents and other vascular devices have made the company a global leader in interventional cardiology.

Miles D. White, Chairman and CEO of Abbott, will remain Chairman and CEO of the diversified medical products company, which aims to be one of the largest and fastest-growing investment opportunities in this area.

The Abbott medical products company, whose current annual revenue is estimated at $22 billion, will continue to aim for double-digit growth and geographic expansion, particularly in emerging high-growth markets.

Its existing portfolio includes laboratory, point of care and molecular diagnostics and medical devices for cardiovascular, diabetes and vision care. It will develop an extensive and broad-based pipeline of medtech.

“Today’s news reflects another dynamic change in our company’s 123-year history, strengthening our outlook for strong and sustainable growth and shareholder returns,” said Miles D. White.

“Abbott will be one of the largest and fastest-growing global diversified medical products companies, with a compelling portfolio of durable growth businesses in medical technology, branded generic pharmaceuticals and nutritionals. We will continue to grow our product lines, market share and global presence, especially in emerging markets.”

The transaction will take the form of a tax-free distribution to Abbott shareholders of a new publicly traded stock for the new drug company.

Abbott currently employs nearly 90,000 people and sells a wide range of products in more than 130 countries.

Read more on this story on Pharmaceutical Field.

NICE has appointed a new external assessment centre to support its Medical Technologies Evaluation Programme.

The new assessment centre, developed by Newcastle upon Tyne Hospitals NHS Foundation Trust Medical Physics Department in partnership with York Health Economics Consortium, will provide independent assessment of the clinical and health economic evidence for medical technologies.

It will also develop and facilitate independent research to assist suppliers when NICE guidance recommends that further research should be carried out on a medical device or diagnostic.

The new assessment centres were selected for their knowledge and expertise in the evaluation of medical technologies.

To date, one more external assessment centre, CEDAR – part of Cardiff and Vale University Local Health Board – has been commissioned.

Professor Carole Longson, Director of the Centre for Health Technology Evaluation at NICE, said: “We’re delighted to welcome the new joint external assessment centre based at Newcastle and York. Their input to the production of NICE medical technology guidance will be essential, providing independent assessment of the evidence available for devices going through the NICE evaluation process.

“Where the relevant NICE advisory committee identifies that a technology has considerable potential but insufficient evidence to support widespread adoption across the NHS, it may make recommendations for further research. In such cases, the external assessment centre will play a key role in facilitating the development of further relevant evidence.

“We look forward to working with the centre, and benefitting from their combined technical and economics expertise in supporting the development of robust guidance for the NHS.”

Established by NICE in 2009, the Medical Technologies Evaluation Programme is focused specifically on innovative medical technologies. Seven NICE medical technology guidance documents have been published to date.