key factsmedical device industry

Medical Sales

Key Statistics:Medical Device Industry

breakdown of healthcare expenditure in Europe 2013

Inpatient & outpatient care, other

75.5%Pharmaceuticals & other medical non-durables

17%Medical technology

7.5%

Medical devices (including imaging) 6.7%

In vitro diagnostics 0.8%

Medical technology of 7.5% is represented by:

A medical device, in European regulatory terms, is defined as “any instrument, apparatus, appliance, material or other article, whether used alone or in combination, including the software necessary for its proper application intended by the manufacturer to be used for human beings for the purpose of diagnosis, prevention, monitoring, treatment or alleviation of disease, handicap or bodily process”.

The UK has a strong medical device industry base, employing nearly 50,000 people and supporting the employment of many more. The medical

technology sector in the UK is widely dispersed across the country; concentrations of economic activity based on turnover and employment are identifiable in the West Midlands, East of England and the South East.

The West Midlands continues to be home to the highest number of medical technology companies and the UK presently has 3113 medical technology companies.

The Medical Device market is forecast to grow, from $12 billion in 2013 to $17.5 billion by 2020, at a CAGR of 4.8%. In 2012, the major market shares were ophthalmic devices ($1.4 billion), wound care management ($1.1 billion), cardiovascular devices ($1.1 billion) and drug delivery devices ($1 billion).

medical technology key statisticsbased upon manufacturer prices

USA

39%Europe

28%Japan

10%China

5%Russia

2%Canada

2%Brazil

2%Other

12%

Germany

27%France

16%UK

11%Italy

10%Spain

5%Netherlands

4%Switzerland

3%Sweden

3%

Belgium

3%Austria

3%Other

14%

World medical technology market by region, based upon manufacturer prices

European medical technology market by region, based upon manufacturer prices

world’s top 20 medical device manufacturersrevenue in billions, July 2013

rank #

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

company name

Johnson & Johnson

GE Healthcare

Siemens Healthcare

Medtronic

Baxter International

Philips Healthcare

Covidien

Abbott Labs

Cardinal Health

Stryker

Danaher

BD

Boston Scientific

B Braun

Essilor

St Jude Medical

Novartis (Alcon)

3M Healthcare

Zimmer

Terumo

company name revenue

$27.43 billion

$18.29 billion

$17.54 billion

$16.20 billion

$14.20 billion

$13.19 billion

$9.85 billion

$9.79 billion

$9.60 billion

$8.66 billion

$8.51 billion

$7.70 billion

$7.25 billion

$6.67 billion

$6.59 billion

$5.50 billion

$5.48 billion

$5.16 billion

$4.47 billion

$4.27 billion

revenue

relevance of medical technologyin society

prospects for leading countriesin the medical device industry

Nevertheless, risk must be objectively balanced with the potential advantages of launching new and innovative technology, but, of course, all medical devices must be adequately assessed.

pharamaceuticalsThe pharmaceutical market in the UK was estimated at $24.1 billion in 2012 and is expected to reach approximately $31.7 billion by 2020 with a projected Compound Annual Growth Rate (CAGR) of 3.5%.

medical devicesThe medical devices market size was approximately $12 billion in 2012 and is expected to reach approximately $17.5 billion by 2020 with a projected CAGR of 4.8%.

Patients must receive the most appropriate medical technology for them in the long term; as a patient’s safety is the industry’s main concern.

Regulatory, demographic and commercial developments worldwide will influence the market, especially fast-rising demand in emerging markets.

China is the third largest world market for medical devices, set to rise to second, (China’s medical devices market is expected to grow to US$53.7 billion by next year, 2015,) while Mexico and Brazil are rapidly expanding too, as is India; these are the markets that medical device manufacturers will need to bear in mind.

Europe’s medical device industry presently demonstrates that more innovative talent strategies are needed in order to deliver solutions which not just merely improve patients’ health but in addition lessen in general healthcare costs. A proactive talent strategy is therefore crucial, for example, companies should endeavour to glance outside of their own business to improve

their leadership bench-strength and to remain competitive while coping with high-levels of change.

The USA currently accounts for about 40% of the global spend on medical equipment. Germany, Japan, France and Italy all account for more than the UK spend which is around 3% of the total global spend, taking into account NHS, private health and home spend. Globally, the leading manufacturers reflect this market pattern with the majority of leading firms being US based. Important firms globally are also based in Japan, Germany and Switzerland.

USA

Japan

Germany, France, UK, Italy and Spain (EU5 nations)

BRIC nations - Brazil, Russia, India, and China

issues affecting the manufacturing & sellingof medical devices

Strong government support across major international markets - driving growth

Market driven by an aging population

Market susceptibility to economic pressures

International expansion - targeting emerging national markets

Comparative effectiveness research as an added expense

Large number of participating companies - increasing rivalry among competitors.

Social drivers help determine which technologies may be required and play a role in the success or failure of a medical device. The perception of any product is critical to its acceptance by the medical and patient communities.

social factors include:Ageing populationImproved life expectancy increases the demand for health technologies and increases the potential market for medical devices; the ratio of health and social care staff available to care for older patients will decrease. A demand for equipment that is easier to use by older staff/carers may also arise.

Many new UK-based medical device companies initially focus on the UK market. The NHS is not only the majority provider in the UK market (supplying around 80% of UK health needs) but is also reputed to be the world’s largest healthcare supplier.

social drivers

80%

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