The “average” wound market does not exist. A remarkable variety of factors influence differences between markets globally.
We compare the distributions of different wound product sales in different countries, resulting from greater or lesser demand drivers within each. For example, you can see the general, common distribution of products sold in Japan or in the Rest of EU segment (e.g., dominance by traditional wound products) and you may see common themes in trending (e.g. decline of traditional products).
The markets for wound products will undergo mixed changes through 2026, but sales generally will continue a low-tech to high tech shift. Traditional products like plain gauzes and dressings, even non-adherent ones, offer low cost and ease of use, but that’s about it. New technologies target the specific deficiencies of plain dressings — infection, moisture control, etc. — and are pulling sales away from them.
Growth of some products in some markets — like negative pressure wound therapy in Germany — show outlier growth rates due to local market dynamics.
Improvements in technology are expected to drive greater acceptance and use of bioengineered skin, as well as growth factors. Bioactive dressing revenues will be driven by several factors, including clinical proof of efficacy, physicians’ growing comfort with appropriate use of these products, cost-effectiveness, increased availability and patient satisfaction with the results—as well as the aging populations and increase in type 2 diabetes. But ALL of these influencers of wound demand are affected by local market forces and practices.
Healthcare systems move billions in global wound care sales, yet chronic wounds still are a chronic problem. Despite the legion of products developed for wound care, from dressings to bioengineered skin, the obesity- and age-driven increase in chronic slow-healing and non-healing wounds plague healthcare systems globally. Results according to MedMarket Diligence’s biennial, 2018 Wound Management report (#S254).
BIDDEFORD, Maine – April 1, 2018 – PRLog — Research and routine clinical practice in wound management have advanced the science to better understand and address chronic wounds, but much work remains for research and manufacturing to impact the growing caseload.
Chronic wounds represent a large but still underestimated problem for health systems globally and industry needs to step up in response, according to MedMarket Diligence, LLC.
“Our recent research shows that chronic wounds, which have long been no secret to clinicians, epidemiologists, and product manufacturers as a growing health problem, are actually even more prevalent and costly than has been previously reported,” says Patrick Driscoll of MedMarket Diligence, who has tracked wounds in clinical practice and industry for 25 years.
Care of chronic wounds is a significant, global burden on healthcare systems. In the USA alone, it is estimated that at least 6.7 million people suffer with chronic wounds, requiring treatment in excess of $20-50 billion per year (estimates vary according to the definitions). A report from the UK suggests, based on National Health System (NHS) data, that chronic wound prevalence in developed countries is about 6% and that care of chronic wounds accounts for around 3-5.5% of total healthcare spending in those countries. (Phillips CJ, et al. Estimating the costs associated with the management of patients with chronic wounds using linked routine data. Int Wound J. 2015. doi: 10.1111/iwj.12443.)
Definitions help clinicians determine whether a wound is healing or not. For example, for venous leg ulcers (VLUs), if the wound has not shown at least a 40% reduction in wound size in about four weeks, then additional therapies are called for. A non-healing foot ulcer is generally defined to be any ulcer that is unresponsive to standard therapies and persists after four weeks of standard care. Once a foot ulcer occurs, unfortunately some 60% of patients end up moving into the chronic non-healing category. Many diabetics develop foot ulcers.
Chronic wounds and burns continue to present challenging clinical problems. For example, chronic wounds may present with persistent infections, inflammation, hypoxia, non-responsive cells at the wound edge, the need for regular debridement, etc. For DFUs, it is important for the patient to continuously wear an offloading device such as a special boot. Additionally, the practitioner must carefully debride not only the necrotic tissue in the wound bed, but the wound edges. Cells at the wound edge seem to be unresponsive to typical healing signals, and therefore must be removed to promote and support proper healing.
To the person with a chronic wound, the condition represents pain, social and psychological debilitation and usually a financial load. To society, wound care—and especially the treatment of difficult-to-heal wounds—may represent great human suffering, social discomfort, days lost from work, mental health problems, recurrent infections and great economic burden and the human burden of wound care. Having a chronic wound not only necessitates physical care of the wound, including cleaning, disinfecting, irrigating, and changing dressings; it also impacts the emotional and psychological health of the patient. Depression can set in due to a lower quality of life and dependence on others for care of the wound, as well as for overall assistance, both physical and financial. Wounds may cause odors or may have visible drainage, staining clothing and triggering feelings of embarrassment and shame. These in turn may lead to isolation due to decreased mobility and the fear of being a burden on family and friends. To make things worse, increased stress can slow the progress of wound healing.
In caring for a chronic wound, the dressing costs are only part of the picture; the less visible costs include such items as nursing care, medications for pain and infections, and hospitalization. Hospitalization is a leading cost driver for wound care, accounting for at least 50% of the global economic burden. Nursing time to properly care for the patient with a chronic wound can be lengthy, and this is time that could be spent with other patients. In a new report published in the December 2017 online version of the International Society for Pharmacoeconomics and Outcomes Research’s (ISPOR) Value in Health journal (An Economic Evaluation of the Impact, Cost, and Medicare Policy Implications of Chronic Nonhealing Wounds. Nussbaum, Samuel R. et al. Value in Health, Volume 21 , Issue 1 , 27 – 32) (see the study), the researchers found that the costs related to wound care in the Medicare population (USA) were much higher than originally estimated, and that care took place primarily in outpatient settings. For the calendar year 2014, there is considerable variation in the estimates originating from different sources:
“Total Medicare spending estimates for all wound types ranged from $28.1 to $96.8 billion. Including infection costs, the most expensive estimates were for surgical wounds ($11.7, $13.1, and $38.3 billion), followed by diabetic foot ulcers ($6.2, $6.9, and $18.7 billion,). The highest cost estimates in regard to site of service were for hospital outpatients ($9.9–$35.8 billion), followed by hospital inpatients ($5.0–$24.3 billion).”
The development of advanced wound care dressings, devices and biologics is helping to change this situation. Although these advanced products may seem (or may be) expensive, they end up saving money for health care systems by healing wounds more rapidly.
The wound care industry remains quite fragmented, with about eight companies holding leading market shares, but with possibly thousands of small cap companies around the world that are also manufacturing and marketing various wound care products. The Traditional Wound Care space remains attractive, in part since gauze dressings are relatively easy to manufacture and are also still the most commonly-used wound dressing. Even a small company can invent a novel twist to a dressing and experience a rise in profits and inroads into the market.
Low to medium industry concentration. As the traditional and advanced market shares diagrams below demonstrate, there are five to eight major players in Traditional and Advanced Wound Care Markets.
While these firms account for about 79% and 73% of the total markets, respectively, a significant portion of these markets are covered by hundreds or thousands of Other companies. This low to medium level of concentration means that smaller companies, or large companies looking to break into Wound Care, are able to do so more easily than if, say, three companies controlled 95% of the market.
Johnson & Johnson is estimated to be the Traditional Wound Care market leader with about 26% share, followed by Smith & Nephew, 3M Health Care and Hartmann. Medline Industries is estimated to account for about 8%, while Others account for about 21% of this market.
Breaking into the Advanced Wound Care markets presents a somewhat greater challenge. Here, the leading companies have invested heavily in R&D to gain strategic competitive advantage, as well as to create improved products for patients. Smith & Nephew is holds an estimated 21% of this market, followed by Acelity and Johnson & Johnson with 11% each, and Mölnlycke, 3M Health Care, Hartmann, Cardinal Health and ConvaTec accounting for smaller shares. Here again, Others accounts for at least 27% of this market.
Opportunities exist in both Traditional and Advanced Wound Care, especially if a company is in the position of acquiring part or all of an existing wound care company, and if the company can then invest in the development of its new products. If points of distribution overlap, then so much the better.
Relatively low barriers to entry. Good news for companies wishing to break into wound care: barriers to entry into the traditional wound dressing segments (Adherents, Gauze and Non-Adherent Dressings) are relatively low, while demand remains strong. Typically, once a company is established in a traditional segment, it may either plow revenues into research and development, or it may acquire companies to more easily break into new product segments and markets. Many companies in wound care have followed just this path to gain market share and make an impact in the industry.
In March 2018, MedMarket Diligence published its biennial report on the global wound care market, “Worldwide Wound Management, Forecast to 2026: Established and Emerging Products, Technologies and Markets in the Americas, Europe, Asia/Pacific and Rest of World.” Details.
Markets for medical technologies work according to the forces in play where products sell. There is no “global market”, per se, but an amalgamation of far-flung markets where, in one country, a new technology is embraced, and in another it’s passe or taboo or too expensive or de rigueur.
Cultural differences regarding medicine can be significant. How the sick are treated socially, how wounds are considered, the value of an innovation — may all be viewed differently through local lenses.
Differences in effective sales and distribution can exist, particularly for new technologies, in technology-importing countries.
Regulatory differences can be HUGE. Besides the timing of FDA PMA or 510(K) versus the CE mark for the same technology, the regulatory entities are not entirely in sync regarding approval for new technologies.
On the global playing field, all active players know that some countries sre better than others at allowing foreign conpetition.
Even well established products, like traditional wound products (gauze, adherent, non-adherent), remain less well established in emerging markets.
below are the shares of each country’s total wound market represented by each technology, for non-adherent dressings, adherent dressings, gauze dressings, NPWT, and antimicrobial wound products.
The net effect on local markets? — Each country has greater/lesser relative demand for different technologies, without respect to overall market size.
Technology/Treatment Share of Country Total Wound Market
The balance of sales across different wound technologies varies by country, with different products accounting for greater or lesser shares of the total wound sales per country. Below are illustrated, for example, that non-adherent dressings account for a higher share of wound product sales in China than in all other countries.
Other traditional products like adherent dressings and gauze show a pattern of lesser use in the U.S., western European countries, and Japan.
Traditional gauze is a less significant component of the U.S. or Japan, both of which have rapidly adopted and instead use more advanced technologies.
Negative Pressure Wound Therapy, a more involved wound care technology, shows different patterns in demand across countries than other wound products.
The actual level of risk of infection, the perceived risk of infection, and the resulting differences in adoption of antimicrobials give rise to some different adoption than one might expect.
Markets for advanced wound care technologies, such bioengineered skin or growth factors (not shown), illustrates a common dynamic, with the highest country use being the U.S. and whose manufacturers have often pursued the U.S. market for new technology introduction, to be followed by Europe, Asia, South America, etc. as technology migrates to less well developed markets.
Other products in wound with their own country-to-country dynamics include film dressings, foam, hydrogel, hydrocolloid, alginate, collagen, and growth factors.
The clinical driver of sales in wound care is the prevalence of different wound types and the associated cost to manage them. While surgical wounds made by primary intent as part of surgical procedures (e.g., excision of skin lesion, appendectomy, coronary artery bypass graft, etc.) represent the biggest source of wounds, the biggest focus on reining in costs in medtech is slow-healing, chronic wounds, such as ulcers.
We have projected the global prevalence for the most common wound types through 2026, shown below.
The use of bioengineered skin and skin substitutes in the treatment of wounds is on a strong, but variable growth curve. Currently, the highest sales of these products in wound management occurs in the United States, where sales are in excess of $700 million annually already and growth in sales of these products is projected at or near 10% annually through 2026.
While China “only” has sales of just over $200 million in bioengineered skin and skin substitutes, the projected >20% CAGR to 2026 will result in China’s sales approximating U.S. sales in a decade.
Analyzing data from Report #S254 ,”Wound Management to 2026″, we present the distribution of top competitors’ sales in each segment in 2017. Smith & Nephew, Johnson & Johnson, and 3M dominate the global wound management, with varying dominance between them — or by other companies — in each segment.
Source: MedMarket Diligence, LLC; Report #s254. (Publishing March 2018)
S&N leads the global market, following closely by JNJ. Both companies are active in multiple segments of wound management. S&N has lower traditional wound management product sales (simple dressings and bandages) and higher sales of “advanced” wound management products. J&J does $800 million more sales in traditional dressings, gauze and bandages than S&N, but lesser involvement in newer wound technologies such as NPWT, bioengineered skin, and growth factors.
Source: MedMarket Diligence, LLC; Report #s254. (Publishing March 2018)
The distribution of sales of different wound management products naturally varies from one country to the next based on pricing, reimbursement, local clinical practice trends, cultural characteristics, and any number of other drivers. The net effect is different distributions.
The goal for wound market players in gauging opportunities is knowing where things are going.
In the global aggregate, here is how we anticipate the market for wound management products in 2016 will stack up compared to 2026:
As you can see, traditional wound management products are giving way in the balance to advanced products. How this global dynamic plays out differently in local markets is important for manufacturers to consider, as shown in the comparison of wound markets in China, the USA and Japan, both in 2017 and 2026.
You can see (in graph, above) the difference in relative sizes of the USA, Japan and China wound markets, in both 2017 and 2026. The largest relative increase in the absolute market will occur in China as a result of its double-digit growth rate. By comparison, the USA market overall is growing slightly faster than Japan (5.8% versus 4.2%, CAGR 2017-26).
More remarkable is the difference in distribution of products sold in these three countries. With the exception of a consistent general decline in relative sales of traditional products, each of these countries is exhibiting different rates of change in the distribution of wound product sales from 2017 to 2026.
March 2018 “Worldwide Wound Management, Forecast to 2026: Established and Emerging Products, Technologies and Markets in the Americas, Europe, Asia/Pacific and Rest of World.” Report #S254.
Generally, the longer the product has been around (e.g., gauze), the less complex it is compared to emerging technologies…
…BUT simpler is easy to adopt and, with well established sales, growth on a percentage basis will be low (see area in red).
Generally, new technologies incorporate rarer materials, have more complex construction, and may cost considerably more…
…BUT complex technologies may be far more effective clinically than older technologies and may allow treatment where no older technology could, and with low initial sales (penetrated potential), growth on a percentage bases will be high (see area in green).
Country and Regional Variation in Growth Rates
While this size-to-growth dynamic exists for most product types, the dynamic varies from one geographic region to the next. The time point at which a particular product/technology starts to be more rapidly adopted — or the rate at which use of established products are use starts to decline — can vary considerably from country to country.
As a result, there will be variability in sales growth rates for a product in one country/region versus another.
For example, the 2017 to 2026 compound annual growth rate in sales of Alginates in wound management range from a low of 5.3% in one country to a high of 24.3% in another country. (If you make alginates, in which country would YOU like to compete?)
Regionally, as in USA versus Europe versus Asia/Pacific, etc., there is less variation in growth rates for any given product in that region. For alginates:
country-to-country variation in CAGR: 19%
region-to-region variation in CAGR: 7.8%
In other words, the difference between the countries with the highest and lowest CAGRs for alginate sales is 19%, while the difference between regions shows one region with a 7.8% higher CAGR for alginates than the lowest growth region.
Here we assess the specific products and geographic areas showing the highest growth in wound management product sales, drawn from our global report and its forecasts, “Wound Management, Forecast to 2026.” Report S254.
We assess the 10-year sales size and growth for 13 different wound product segments worldwide, in major geographic regions and individual countries — USA, Rest of N. America, Latin America, Europe, United Kingdom, Spain, France, Germany, Italy, Rest of Europe, Asia/Pacific, Japan, Korea, China, Rest of Asia/Pacific, Rest of World.
Below we show the top 15 combinations of regional market and product segments in descending order of their compound annual growth rate from 2017 to 2026.
As becomes clear, the greatest relative growth in sales in the area of wound management is in several wound care product types — bioengineered skin & skin substitutes, growth factors — and the geographic regions of Japan, Rest of World, China, Germany, Asia-Pacific. This reflects the high level of investment and attention in Asian markets, especially China.