This is in response to several requests for additional detail on the ophthalmology market (including by one job seeker!). The worldwide ophthalmology market, comprised of many different device, drug and diagnostic segments spanning vision correction and various eye diseases, is a robust market with good growth expected despite the prevailing challenges in the economy.
Although a fair amount of consolidation has taken place among ophthalmology technology companies in the last half decade, a number of entrepreneurial firms have surfaced with promising innovations that will keep the specialty vibrant with possibility. The company profile (in Report #G125) include reference to the acquisitions taking place at some of the sector’s largest firms as well as the early stage developments that are taking place behind the scenes at venture capital backed companies.
In addition to the large and the small, many of the mid-sized companies that support the ophthalmologist continue to iterate and refine essential tools that will make surgical interventions faster, easier, more accurate and more affordable.
The ophthalmic medical device market can be organized into three major segments; (1) Diagnostics, which includes hand-held office-based diagnostic instruments, (2) Cataract surgery products including intra-ocular lenses, viscoelastics and phacoemulsification systems, and (3) Refractive surgery products – Excimer and Femtosecond lasers, microkeratomes and usage-based procedure cards. In addition to devices, the ophthalmic market includes pharmaceuticals and eye care products such as contact lenses and solutions.
The worldwide ophthalmic products market exceeds $22 billion (US) and is growing at more than 10% per year. Without the inclusion of consumer eye care products, the ophthalmic products market approximates $17 billion in 2006.
Source: "Products, Technologies, Markets and Opportunities in Ophthalmology Surgical, Device and Drug Markets Worldwide, 2007," Report #G125, MedMarket Diligence.
[Having covered a very wide range of medical technology markets, spanning cardiology to gastroenterology, biotechs to devices and disposables/reusables/"reposables" to capital equipment, I have to note that the spine surgery market is really unique among all of them — resistant to cost containment, persistently device-oriented, and subject to tremendous innovation all the same. In some ways, spine surgery may be the last bastion of medical device development, clinging as it does to its inherent need for products that are structural in nature and therefore keeping at bay the wholesale intrusion of biotechs and pharmaceuticals. – P. Driscoll]
The global spine market is large, active and growing rapidly in revenues. Several dynamic forces, in addition to the aging of the population, are expected to affect the market and treatments during the next several years. While spinal fusion will always have a place, its share of the treatment market is expected to decline. Newer treatments such as total disc replacement and nuclear arthroplasty will erode the spinal fusion market, as these and other treatments which preserve spinal motion gain favor over the invasive and traumatic fusion of two or more spine segments.
The total global spine surgery market includes includes devices for spinal fusion, bone graft substitutes, total disc replacement, nuclear arthroplasty (also known as nucleus replacement) vertebroplasty, kyphoplasty, interspinous process spacers and devices for image guided surgery. The combined market will have a compound annual growth rate (CAGR) of over 14% through 2017.
As has been the historical precedent, many devices are first launched outside of the US, primarily in the European Union, where the product approval process is less strenuous than in the US. Therefore, a number of new products, such as nucleus replacement, have sales outside of the US but no sales here, or very modest US sales due to use as an investigational or humanitarian device.
Worldwide, spinal fusion is expected to always be a tool for the orthopedic surgeon, but as a procedure it is starting to yield market share to other, more motion-preserving devices and procedures. In addition, motion-preserving technologies are filling the treatment gap between lumbar back pain treated with non-surgical means, and multi-segment spinal fusion. Motion-preserving devices also leave the option of fusion open as more of a last resort treatment, if needed. As technology advances, populations age and surgeons gain experience with new treatments, these trends are expected to continue.
In dollar terms, spine fusion revenues are expected to be flat as bone graft substitutes, total disc replacement and vertebroplasty/kyphoplasty begin to replace some spinal fusion procedures. Nucleus replacement, a market in its infancy, will also be increasing during the period covered in this study, but will remain a relatively modest sub-segment of the entire market.
Global Spine Surgery Market by Percentage and Segments, 2008-2017
The exhibit above shows the percent shares (by USD) of the product segments. This graph shows more dramatically the predicted shift from spinal fusion towards other technologies. One of the drivers of this trend is the desire by Baby Boomers to remain active into their later years. This means that they will be more likely to opt for a total disc replacement, for example, in order to keep spinal fusion as a more drastic, final solution if all else fails.
Another factor behind the growth of the global spine market is the increasing prevalence of obesity, especially in developed countries. Obesity puts added strains on the vertebrae and increases the rate of normal wear. While the rate of obesity seems now to be slowing in some countries, it is expected to remain a significant factor through at least 2017. Innovation as a factor refers both to the plethora of new designs and devices being patented and produced, and the new materials under development which go into some of those devices. Critics suggest that some of these devices are a technology looking for a market. Years are usually required to conduct the testing and to obtain market approval through the FDA or other regulatory approvals such as the CE mark in the EU, or approval by the Japanese medical device authorities. Further years of surgeon experience using the new devices with patients will determine which devices are winners in the race, and which fall out of usage. Nevertheless, there are a number of start-up companies in the US and outside of the US which are working to develop devices in hopes of meeting a significant need and reaping the rewards. Patients are frequently the beneficiaries of this research and development, and hence innovation is a powerful driver of the global market. Baby boomers, in addition to requesting spinal treatments which will allow them to return to their normal, active lifestyle, are also increasingly requesting minimally invasive or minimal access surgery. MIS device revenues are expected to increase due to this growing demand.
[Healthcare costs have two important components — the cost of treating diseases and the costs of not treating them. In the din of discussion of rising healthcare costs, frequently the mantra is heard that medical technology is responsible for the higher costs. Yet, in the case of chronic diseases, the associated, preventable complications, which can run the gamut from heart disease, stroke, wound care, infection control and numerous other complications, reducing the exorbitant costs chronic disease complications is a primary goal of medical technology development.]
Chronic diseases continue to garner much attention due to their blame in rising healthcare costs. Obesity, for one, is gaining more attention by the day, particularly since it can be associated with or directly lead to many other healthcare problems (heart disease, hypertension, end-stage renal disease, vascular disorders, stroke), all of which contribute significantly to rising healthcare costs. Treatments are diverse, with the most effective options — at least in the short term — being those involving bariatric surgery and the use of devices like lap banding and gastric stimulation. The drawbacks are, of course, that these surgical options can be highly invasive, they do not address the root causes of obesity and as effective interventions as they may be for life threatening obesity, they sometimes represent only short term solutions.
Another major contributor to chronic disease is Type 2 diabetes, particularly for its high prevalence worldwide and its correlation with growth in the incidence of obesity. If left unchecked, its associated complications are enormously costly both in human and financial terms, yet the number of options for its effective management make it a high profile target of healthcare industry attention..
By no means representing all chronic disease and certainly recognizing the overlapping involvement of obesity and diabetes, obesity and diabetes are nonetheless among the most salient examples in which chronic disease creates enormous potential for medical technology.
Considering these two chronic conditions, we provide additional data on each that bear on the size of the opportunity to make an impact on chronic disease.
The most common form of diabetes, Type 2, which manifests itself more frequently in adults, represents a huge and growing segment of the global population, all the more for the fact that upwards of 80% of all cases of Type 2 diabetes are undiagnosed yet insidiously lead to a myriad of health problems like hypertension, heart disease, diabetic retinopathy, diabetic nephrophathy, stroke and other circulatory disorders.
In the chart below is shown the prevalence of diabetes (all types) by region in 2003 and forecast for 2025, illustrating dramatic regional and overall growth.
Source: International Diabetes Federation; MedMarket Diligence, LLC, report #D500, "Diabetes Management, Worldwide, 2005-2015: Products, Technologies and Markets in the U.S., Europe, Japan & Rest of World."
The presentation of type 2 diabetes has a high correlation with cardiovascular disease and obesity; overweight middle-aged people age are much likelier to develop the condition than individuals of normal weight. The associated costs of treating the condition and its complications are vast compared with the cost of the drugs that are currently available. This explains why diabetes has become a prime candidate for disease management programs; pharmacy benefit managers see a good opportunity to reduce the overall cost of the disease through better and earlier intervention with medicines.
The size of the patient population, its steady growth – especially rapid in developing world countries enjoying new prosperity – and the limitations of current treatments mean that diabetes has become a major R&D focus for many of the world’s largest drug companies. These include Bayer, Pfizer and Servier, as well as Eli Lilly, Novo Nordisk and Sanofi-Aventis, and biotechnology companies such as Amylin.
Unlike Type 1 diabetes (juvenile onset), which is characterized by lack of insulin production, Type 2 diabetes is variably characterized as being associated with either with patients’ inadequate insulin production or production of ineffective forms of insulin. This requires different therapeutic regimens to either provide insulin or other drugs that can moderate the patient’s sensitivity to insulin in order to effectively regulate blood glucose levels.
While drugs and devices for the monitoring and treatment of type 2 diabetes are well established, this does not equate with lack of opportunity in the market, given the trend in prevalence, untapped patient population, accelerating healthcare costs and other drivers. In fact, tremendous opportunities exist for better drugs (e.g., considering recent questions about Avandia), less invasive glucose measurement (e.g., painless lancing, near-infrared or similar non-invasive approaches), less invasive delivery of insulin (although Exubera, the inhalable insulin from Pfizer was approved in early 2006, questions about respiratory effects and other questions have dampened the — one might say — overly "exuberant" potential for this drug), and other treatments to improve clinical outcomes and further penetrate the undiagnosed type 2 population.
Bariatric Surgical Device Unit Sales Volume, 2004-2015
Most physicians now view obesity not, as was common in the early 1900s, as a symptom of a weak character, but as a disregulation of eating, a metabolic disorder of multifactorial etiology, probably including a genetic factor that may give obesity an inherited aspect. Researchers continue to explore the complex variables causing obesity, and have uncovered critical facts that are already affecting the market for treatments of obesity. Among these are that the only treatment that appears to work today for long term weight loss for the morbidly obese (BMI>40), i.e. those who need to lose at least 100 pounds, is bariatric surgery; that once a person, whether overweight or obese, loses 15-20% of their excess weight, the body seems to throw a switch into regain mode; and that a small percentage of patients who undergo successful bariatric surgery regain the lost pounds. Hence, there is a market not only for drugs to lose the weight, but drugs to maintain weight loss. As noted in the July MedMarkets, the number of anti-obesity drugs in the pipeline has grown dramatically and, with the recent regulatory failure of Pfizer’s rimonabant, and limited market success of Roche’s Xenical and Abbott Laboratories’ Meridia/Reductil, the demand for an obesity drug remains very high. In addition, anti-obesity drugs are also gaining a following among those who only need to lose a few pounds, and hence the potential market is expanding to include not only the obese, but the lifestyle and wellness consumer as well.
The market is attractive not only to companies focused upon the treatment of obesity, but to firms working in related areas. A number of biotechs, for example, are taking up the twin challenges of diabetes and obesity research through study of neuroendocrine and metabolic pathways, as well as fat absorption and appetite suppression. Some biotechs have chosen to develop diagnostic tests for lipid disorders and a tendency towards obesity. A wide range of approaches are being developed, mirroring the multifactorial basis of obesity.
Diabetes and Obesity Common Ground
Both type 2 diabetes and obesity may be characterized as preventable for a significant share of the population and through many of the same ways. Diet, exercise and level of sedentary lifestyle are all factors that can lead to obesity and/or diabetes. The causative and other relationships between the two are many (and for this, this article could be fairly critiqued for addressing these two "different" diseases).
A recent Wall Street Journal article (August 22, 2007), "To Heal Diabetes, Doctors Push Weight-Loss Surgery," highlighted a trend among some physicians to treat diabetes by tacking obesity as a sort of lynchpin in the problem. The article noted studies that showed bariatric surgery for type 2 diabetes resulting in their diabetes disappearing in 75% of such cases. Although the mechanisms aren’t clear, evidence points toward hormones in the intestine that, in the diabetic patient, act in ways that affect insulin metabolism but that, when "bypassed" by surgery results in normal or near normal blood glucose regulation by insulin. However, as positve as the 75% diabetes remission figure may be, the operative phrase dictating reimbursement (or lack thereof) is "mechanisms aren’t clear", so until such time as this evidence is more definitive, there will be at best tepid support by third party payers for a procedure that has high morbidity (death rate of 0.1% to 1%) When considering chronic disease driving healthcare costs and stimulating global medical technology markets, one cannot exclude cancer and heart disease. The numbers of patients, need for treatments that bring down costs and the resulting market demand are at least as significant for these as for diabetes and obesity. For this reason, a wide range of drug, diagnostic and therapeutic options have been developed and refined and now represent areas of extremely robust competitive activity. Obesity and diabetes, for their part, however, represent patient populations who have not quite fully come into view nor have they been penetrated by medical technology to the degree of cancer and heart disease and, hence, offer alluring market potential.
The imperative for medical technology manufacturers is to recognize that chronic disease is a huge juggernaut driving activity in healthcare markets and they are therefore well advised to get ahead of this, to present cost effective solutions to chronic disease or at least to consider (and promote) the positive impact of new technologies on chronic disease.
While this is separately a White Paper that I wrote and periodically re-write to reflect new stuff being developed (or progressing in that development), it is worthwhile to occasionally revisit the list of technologies that have real promise, especially if that promise is getting closer to reality, or only if the demand is simply getting greater.
Ablation and other high energy technologies. What used to be handled by scalpel when my father did general surgery, is now increasingly being accomplished using energy-driven modalities that provide other tissue effects that a sharp metal blade alone could never do. These technologies are therefore growing in both the penetration of traditional surgical procedures and the expansion to clinical applications.
Nanotech and microelectromechanical systems (MEMS). It is actually a gross oversimplification to use a word like "nanotech" and imply that you are talking about one type of technology. The only thing common to nanotech is size; every manner of material, construction, function and clinical benefit is part of this area. The pace of development is striking.
Drug-device hybrids. Just a few of the applications of combining drugs and devices in a single device include localized drug-delivery that avoids toxic, systemic dosages and vastly improved biocompatibility of existing devices. These two options alone represent multiple enormous markets. Now, naked metal (or other) implants seem almost barbaric.
Bioresorbable materials. Polymer and other materials technologies are enabling the development of implants and other devices that conveniently go away when they are no longer needed. Already a significant market force in areas like bone growth in orthopedics, bioresorbable stents and other implants are proving their worth in cardiology and urology.
Atherosclerotic plaque-reversing drugs. When Pfizer divested itself of Esperion Therapeutics, it did not bode the end of this striking new drug approach to atherosclerosis, it simply illustrated the persistent challenge of drug development. Here, it should be kept in mind that, the bigger the potential payout, based on huge clinical need (e.g., drug solution to the device intensive treatment of coronary artery disease), the more likely it is only a matter of time before the product reaches the market. The jury is out on the "when" part, not the "if".
Rational therapeutics. This is the holy grail thinking behind the development of many, many biotech products. If one can develop a cure — a direct resolution of the underlying biological defect or deficiency in disease — and not just the symptoms, then one has changed the market in paradigm ways. The hurdle and the payoffs are huge.
Tissue engineering technologies. We have begun to be able to develop tissue engineered organs of increasing complexity — skin, bladders and rudimentary pancreases — and the benefits of these are huge.
RFID. There is little, really, that is sophisticated about radiofrequency identification devices, but their rapid integration into medical technologies of a wide range (tagging surgical instruments so they don’t get left behind, implants that enable external identification or even status, other types) will extend the utility and value of medical devices.
Noninvasive glucose monitoring. Optimizing care for diabetes means, at a minimum, very frequent (5-10) checks per day of blood glucose. This many finger pricks per year by the total number of diabetics globally (a rapidly growing number at that) who clearly would benefit from noninvasive monitoring reveals the value of this opportunity. Capturing that opportunity means the combined success of both technology and cost.
Infection control. This area is a top area, not for the sigificant technologies that have been developed, but the enormous demand for them. Between rapidly emerging problems like methicillin-resistant staph aureus (MRSA), the resurgence of tuberculosis, the enormous costs of nosocomial infections and other infection-related challenges, infection control is an enormous, global opportunity.
Spine surgery. The nature of the human spine, constructed of bone that needs to be both flexible and strong, demands device-intensive solutions. The growing patient population of active, older adults is ratcheting the pressure on technologies to be less invasive, provide greater range of motion, last longer, cost less — all of which drives innovation in spine surgical technologies.
Obesity treatment technologies. Technology solutions to the increasingly prevalant problem of obesity are imperfect, but still are frequently better solutions for the obese than an alternative that may ultimately also encompass heart disease, diabetes, stroke and other problems. Diverse drug and device alternatives have been developed and the trend in obesity incidence will simply drive their continued development.
Other forces are at work driving the above technologieis including, of course, cost containment, the integration of information technologies in both medical product and development process and the globalized economy.
The above topics are covered in various MedMarket Diligence reports. See our list of titles.
(Excerpt from Report #G125, Products, Technologies, Markets and Opportunities in Ophthalmology Surgical, Device and Drug Markets Worldwide, 2007.)
Although there is a broad spectrum of medical technology innovations taking place in the ophthalmology sector, pharmaceuticals will continue to be a critical component of both elective and emergency ocular interventions. As a result, the dominant players in the pharmaceutical sector will realize strong growth, particularly in the areas of Dry Eye management (as a result of complications following refractive surgery), Glaucoma medications and treatments for wet AMD.
In addition, the generic drug sector will experience strong growth, particularly as expensive therapies for AMD reach the market and usurp scarce financial resources of markets with socialized healthcare systems.
Below is a forecast of the European ophthalmic pharmaceuticals market by segment.
The market in Europe for ophthalmic pharmaceuticals is dominated by Alcon, with Pfizer showing a distant second.
The report #G125 on the worldwide ophthalmic products market is available for purchase and immediate download at link.
A scary graphic showing the rapid progression of obesity in the U.S. was shown on CNN, illustrating the percent population by state that was obese (body mass index > 30) from 1985 to 2006. This graphic coincides with the increasingly high percentage of populations globally that are obese. From Report S825 (**see 2011 Report #S835, "Products, Technologies and Markets Worldwide for the Clinical Management of Obesity, 2011-2019"), we reference the World Health Organization data illustrating the percent population by country with body mass index > 25.
The direct and indirect costs of managing this increasingly prevalent disease support and even demand the development of a wide range of therapeutic options.