medical device industry 2010 and beyond….. venkat rajan dec, 16 th 2009
TRANSCRIPT
2
2009 Recession Rebound?
2000-2009 Medical Device Decade Retrospective
HC Reform: As it stands now
2010 Growth Sectors
Challenges Ahead
Decade Ahead 2010-2020
Trends
Focus Points
3
Recession Impacts Medical Device Market
2009 Recession
Imact
2009 Recession
Imact
Cap Ex Spending
Destocking/ Inventory
Management
HC Reform Looming Investment Spending
Internal Resources
Patient Volumes
4
Medical Device Industry Decade Retrospective 2000-2009
U.S. MedTech Industry Forecast
0
50
100
150
200
250
300
350
1990
2000
2010
2020
Rev
enu
e ($
Bil
lio
ns)
Major Technology Developments 2000-2009•Minimally Invasive Surgery Improves Treatment times, Recovery, Reduces Risk•Drug Device Hybrid Technologies•Microprocessors make devices faster, smarter, efficient. •Increased Specialization Expands Availability of Treatments.•National Health Expenditures Sky Rocket (~$2.5 Trillion in 2009) •Imaging- Detection Improvement Increase confidence•Robotics become Reality
?
CAGR: 7.18%
CAGR:6.49%
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Health Care Reform Impact – Medical Device Tax
Medical Device Tax ProposalsMedical Device Tax Proposals
House Tax ProposalMedical Device Tax: 2.5 percent tax on the sale of any medical device product not sold directly to the public or to be used in further manufacturing of other products
Senate Tax ProposalMedical Device Tax: A fee of $2 billion to be paid for by the industry on an annual basis; the share of how much each company pays is to be determined by their overall share of FDA Class II and Class III product sales in the U.S. Excludes Class II devices retail less than $100. 0 percent of sales up to $5 million; 50 percent of sales over $5 million and up to $25 million; 100 percent of sales over $25 million. Lowered
from $4B.Amendment submitted Dec 14th:
Companies reporting less than $100 million in yearly revenues would be exempt from the tax. Companies reporting between $100 million and $150 million would pay an excise tax on 50 percent of their revenues; the rate for companies with more than $150 million in annual sales would be 100 percent. Make the excise tax tax-deductible. Move effective date to 2013
House Tax ProposalMedical Device Tax: 2.5 percent tax on the sale of any medical device product not sold directly to the public or to be used in further manufacturing of other products
Senate Tax ProposalMedical Device Tax: A fee of $2 billion to be paid for by the industry on an annual basis; the share of how much each company pays is to be determined by their overall share of FDA Class II and Class III product sales in the U.S. Excludes Class II devices retail less than $100. 0 percent of sales up to $5 million; 50 percent of sales over $5 million and up to $25 million; 100 percent of sales over $25 million. Lowered
from $4B.Amendment submitted Dec 14th:
Companies reporting less than $100 million in yearly revenues would be exempt from the tax. Companies reporting between $100 million and $150 million would pay an excise tax on 50 percent of their revenues; the rate for companies with more than $150 million in annual sales would be 100 percent. Make the excise tax tax-deductible. Move effective date to 2013
HC Reform Market OpportunityHC Reform Market Opportunity
• Expansion of Coverage• Reduce number of Uninsured Treatments• Safety Net in Economic Down Turn• Electronic HC Records• National Pricing Clarity• Wellness Care Products• Preventative Care Products/Technologies• Earlier Detection of Chronic Diseases
• Expansion of Coverage• Reduce number of Uninsured Treatments• Safety Net in Economic Down Turn• Electronic HC Records• National Pricing Clarity• Wellness Care Products• Preventative Care Products/Technologies• Earlier Detection of Chronic Diseases
Market ThreatsMarket Threats
• Reduced Capital for R&D spending• Marginal Benefit for Advanced Age Treatments• Pricing Pressures• Reimbursement Stagnation• Restrain M&A activity by larger companies• Raise Costs for Elective/ Semi-Elective
Treatments
• Reduced Capital for R&D spending• Marginal Benefit for Advanced Age Treatments• Pricing Pressures• Reimbursement Stagnation• Restrain M&A activity by larger companies• Raise Costs for Elective/ Semi-Elective
Treatments
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Comparative Effectiveness Research- It’s Coming
Out of Clinical Setting Management of Patients with Emotional Disorders
Non-Clinical Interventions to Encourage Wellness
Literacy Sensitive Disease Management
Strategies for Prenatal Care for Populations prone to birth defects
Strategies for Preventing Unintended Pregnancies
Treatment Strategies for Attention Deficit Hyperactivity Disorder in Children
Genetic and Biomarker Testing for Cancer and Other Diseases
Channels to Prevent Dental Carries in Children
Imaging Technologies (PET, MRI, CT) in cancer detection, diagnosis
Management Strategies for ductal carcinoma in situ
Strategies to Prevent Obesity, Hypertension, Diabetes, Heart Disease in at-risk Populations
School based Programs to Prevent/Reduce Childhood Obesity
Pharmacological and non-Pharmacological Treatments for behavioral disorders in Alzheimer's and other Dementia Patients
Alternative Detection and Management Strategies for Dementia
Treatment strategies for lower back pain
Management Strategies for Prostate Cancer (Surgery, Radiation)
Strategies for reducing healthcare associated infections
Screening, Treatment, Prevention of MRSA
Biologics used to treat Inflammatory Diseases (Crohn's, ulcers, arthritis)
Comprehensive Care Programs (medical home, chronic disease management)
Comparative Effectiveness Information (Dissemination & Translation)
Upper endoscopy utilization for gastroesophageal reflux disease
Primary Prevention over Clinical Methods (Excersize, Balance training)
Hearing Loss Technologies
Atrial Fibrillation Treatment (Catheter Ablation, Surgery, Pharma)
IOM Top 25 Priorities for Comparative Effectiveness Research:
Out of Clinical Setting Management of Patients with Emotional Disorders
Non-Clinical Interventions to Encourage Wellness
Literacy Sensitive Disease Management
Strategies for Prenatal Care for Populations prone to birth defects
Strategies for Preventing Unintended Pregnancies
Treatment Strategies for Attention Deficit Hyperactivity Disorder in Children
Genetic and Biomarker Testing for Cancer and Other Diseases
Channels to Prevent Dental Carries in Children
Imaging Technologies (PET, MRI, CT) in cancer detection, diagnosis
Management Strategies for ductal carcinoma in situ
Strategies to Prevent Obesity, Hypertension, Diabetes, Heart Disease in at-risk Populations
School based Programs to Prevent/Reduce Childhood Obesity
Pharmacological and non-Pharmacological Treatments for behavioral disorders in Alzheimer's and other Dementia Patients
Alternative Detection and Management Strategies for Dementia
Treatment strategies for lower back pain
Management Strategies for Prostate Cancer (Surgery, Radiation)
Strategies for reducing healthcare associated infections
Screening, Treatment, Prevention of MRSA
Biologics used to treat Inflammatory Diseases (Crohn's, ulcers, arthritis)
Comprehensive Care Programs (medical home, chronic disease management)
Comparative Effectiveness Information (Dissemination & Translation)
Upper endoscopy utilization for gastroesophageal reflux disease
Primary Prevention over Clinical Methods (Excersize, Balance training)
Hearing Loss Technologies
Atrial Fibrillation Treatment (Catheter Ablation, Surgery, Pharma)
IOM Top 25 Priorities for Comparative Effectiveness Research:
Comparative Effectiveness ResearchComparative Effectiveness Research
• $1.1 B ($400M NIH, $300M AHRQ, $400M HHH)
• Impact Treatment Decision Making Criteria• Faster Dissemination of Information• Identify Ideal Patient Profiles• Influence Adoption of New Technologies• Stamdardization
• $1.1 B ($400M NIH, $300M AHRQ, $400M HHH)
• Impact Treatment Decision Making Criteria• Faster Dissemination of Information• Identify Ideal Patient Profiles• Influence Adoption of New Technologies• Stamdardization
Theory vs. ApplicationTheory vs. Application
• Implementation?• Weight of Information?• Compared against Internal Evluation Boards?• How are parameters being defined?• How are funds allocated?• Sources of Information?
• Implementation?• Weight of Information?• Compared against Internal Evluation Boards?• How are parameters being defined?• How are funds allocated?• Sources of Information?
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
$0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20
Revenue ($ Billions)
Fore
cast
ed C
AG
R %
(201
0-20
16)
Aesthetic Surgery
Anesthesia
Audiology
Cardiovascular
Diabetes Supplies
Disinfection &SterilizationEndoscopy
Gynocology
Hospital Supplies
Infusion systems
Mobility Aids
Neurology
Ophthalmic Surgery
Orthopedics
Respiratory
Radiotherapy
Renal
Surgery
Urology
Vision Care
Wound Care
U.S. Medical Device Industry Market Sectors, 2009
Cardiology
Orthopedics
Neurology/Neurovascular
Aesthetic Surgery
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2007
Cardiology
2008
2009
2010
2011
0
The Cardio market which has been slumping, but should get a boost in 2010 and beyond due to stabalizing of DES and ICD markets, and growth in AFib and Heart Valve Markets.
Growth Opportunities in Top Segments/Sectors
Woundcare 0
The Woundcare market is one that is mature and stable. Pricing pressures due to reprocessing, GPO’s, reimbursement, destocking have all restrained the market. New preventative technologies that reduce risk of adverse events represent targeted segments for growth. Could receive a boost from Comparative Effectiveness Research (CER).
Despite slowed growth from double digit rates due to factors including patient volumes, regulatory scrutiny, and pricing pressures; new product developments that improve patient comfort, surgical procedure times, and patient demographics should fuel continued growth.
Orthopedics 0
Source: Frost & Sullivan.
Surgery 0
The transition to MIS will likely lead to cannibalization of certain market segments. Patient demographic trends and improved image guidance, robotics, and minimally invasive endoscopic tools should support moderate growth.
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Short Term Medium Term
Imp
act
Ma
rke
t D
riv
ers
Ma
rke
t R
es
tra
ints
Imp
act
Long Term
Development of Patient Safety Technologies
Continued Transition to Minimally Invasive
Technologies
Inventory Management
Regulatory Control
Cap Ex Spending
Low
High
Low
High
Market Drivers and Restraints, 2010 to 2019
Source: Frost & Sullivan.
Pricing Pressures
More Treatments Move out of
Traditional Care Settings
Reimbursement Declines
Comparative Effectiveness
Research
Expansion of Insurance Coverage
Pay for Performance
HC Reform Taxes and Cuts
Expansion of New Patient Segments
Cost of Raw Materials and Manufacturing
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Macro Economic Trends to Watch for the Next Decade
Patient Care PathwaysPatient Care Pathways
Tiered Care FacilitiesTiered Care Facilities
Provider ShortagesAutomation of Care
Provider ShortagesAutomation of Care
Technology DependenceTechnology Dependence
Automation of CareAutomation of Care
UrbanizationUrbanization
Resource Scarcity/ Cost of GoodsResource Scarcity/ Cost of Goods
Sources : Frost & Sullivan
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Technologies to Impact the Next Generation of Medical Devices
Artificial IntelligenceArtificial Intelligence
Antimicrobial MaterialsAntimicrobial Materials
TelemedicineTelemedicine
Tissue EngineeringTissue Engineering
Bioadsorbable/ BioerodibleBioadsorbable/ Bioerodible
Structural MaterialsStructural Materials
NanotechnologyNanotechnology
Sources : Frost & Sullivan
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Start with the need, not with the technologyStart with the need, not with the technology
Products for the MassesProducts for the Masses
Social Networks and Online Communitiesto Exchange Ideas
Social Networks and Online Communitiesto Exchange Ideas
Know when to foldKnow when to fold
Looking beyond your core customer baseLooking beyond your core customer base
AppleApple
TataTata
FacebookFacebook
PolaroidPolaroid
NintendoNintendo
Business Models Permeating Healthcare…
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For Additional Information
For Additional Information
Venkat RajanIndustry ManagerMedical [email protected]
Carol SklossDirector of Sales Healthcare & Life [email protected]
Monali Patel ShastryDirectorHealthcare [email protected]