Rapidly evolving technology expands the European interventional cardiology market, says Frost & Sullivan

London 25 November 2003Rapid technological advances are spurring high investment in product development and increasing the convergence of medical device companies and pharmaceuticals in the European market for interventional cardiology, reveals new research from Frost & Sullivan. Ongoing research in percutaneous transluminal coronary angioplasty (PTCA) procedures covers new interventional devices such as drug-eluting stents (DES), intravascular ultrasound (IVUS), and vascular closure equipment. Advanced drug therapies for patients undergoing balloon angioplasty and stent placement in their coronary arteries are also being studied.

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"Balancing the heavy R&D investment in current and future cardiovascular products requires a speedy transformation of such technologies into marketable products", explained Tanya Pullen, research analyst at Frost & Sullivan. Currently the total European interventional cardiology market is worth an estimated $578,7 million for 2003 and expected to reach $643 million in 2009.

Ways to decrease time-to-market includes the acquisition of smaller companies that have developed possible technology platforms of the future and collaborations with major pharmaceutical companies since medical devices that can deliver drugs are becoming increasingly popular. For instance, Abbott's acquisition of Biocompatibles' stent business helps it gain entry into that market and its co-exclusive product access agreements with Medtronic works toward combining proprietary rapamycin drug and polymer-coating knowledge with Medtronic's suite of stent delivery systems to develop DES product offerings.

Traditional medical device companies, in particular, can gain through these strategic partnerships as major pharma companies have a larger resource pool to invest in joint ventures. Additionally, the recruitment of skilled personnel from pharmaceuticals can enable medical device companies to better understand the effects of the pharmaceutical market dynamics on the interventional cardiology market. However, for adequate returns on high investments, sale prices of new products have to be kept high, even in such a competitive market.

While tight catheterisation labs budgets often compel companies to resort to price manipulation for strengthening market shares, participants in emerging markets such as second-generation stents are likely to avoid under-cutting competitors. Instead, they will compete on clinical efficacy, ease of use, and product range. As end-user uptake of new and expensive technologies rises, they are likely to look for a single source that can provide them with basic as well as advanced products at a discount.

"Cost containment being a primary challenge within the medical devices market, a broad product scope can allow greater flexibility in tailoring bundling deals to customers, especially on the introduction of costly products such as DES", noted Ms. Pullen. Cardiologists and radiologists are more likely to consider purchasing these products as part of a bundled package, where basic devices, bare metal stents and angioplasty balloons, are offered at a discount. This poses a problem for smaller companies that have niche or limited product offerings.

"Market consolidations are expected to increase in future as smaller participants find themselves unable to offer a wider product range or support the launch of costlier second-generation products", stated Ms. Pullen. Among these products, DES is expected to eventually expand indications of stent usage. DES is now preferred over bare metal stents due to their significant ability to reduce or potentially eliminate the problem of restenosis. Drug coatings will enable manufacturers to charge high prices for these next-generation stents and future advances can possibly include gene delivery.

However, the revenues from DES and other emerging segments is partially being off-set by the rapid price erosion on mature interventional cardiology products like balloon catheters and bare metal stents. Limits on reimbursement and subsequent pressure from purchasers have also been eroding prices in most product segments.

Nevertheless, the European interventional cardiology market is seeing a steady increase in PTCA procedure rates. Unit growth rates are particularly strong in the IVUS and vascular closure devices segments with Germany being the largest market for these products, followed by France and the United Kingdom. For more information about the study on the European interventional cardiology market you can contact Mrs. Katja Feick from Frost & Sullivan.


Leslie Versweyveld

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