Osec Market Study Medtech Market UK March2012 preview by Switzerland Global Enterprise

United Kingdom â&#x20AC;&#x201C; Medtech Market 2011. March 2012 osec.ch

United Kingdom Medtech Market 2011. Title. Language. Number of pages.

Author.

eader, Dear re e of medica al technolog gy improve es the lives of people around a the globe. Man ny medical The use procedu ures would not be pos ssible witho out the inno ovative solu utions med ical technology compan nies offer. Ingenuity and cutting-edge solutions s frrom small and a medium m sized com mpanies in wiss medtec ch industry. The tight interplay between b Switzerrland drive the success of the Sw differen nt parts of the t value chain â&#x20AC;&#x201C; from m researche ers to suppliers, manu ufacturers, and physicia ans â&#x20AC;&#x201C; is ess sential for the t markett success off the medte ech productts made in Switzerrland. But Switzerland would w not be e so successsful in med dical techno ology witho out the influ ux of ideas e demand from f abroad d. Exportin g or establishing subs sidiaries ab road is a must m for and the most Swiss compa anies. It is here where e the work of Medtech h Switzerlan nd starts. ch Switzerla and is the non-profit n p platform inittiated by th he Swiss go overnment to Medtec cal technolo ogies to key y world markets. Serv ving the ind dustry, promotte the export of medic especia ally Swiss SMEs, S Medte ech Switze rland facilittates exporrt activities and fosters collaboration with companies s from new w and existin ng foreign markets. ope, the UK K is among the leading g medtech markets, crreating opp portunities and In Euro challenges for the e Swiss med dtech indusstry. This re eport provid des a pathw way to facilitating g economic ties betwe een the UK and Switze erland for th he benefit of o and strrengthening ns, and the e medical te echnologies s industry. patients, physician Patrick DĂźmmler, PhD

Managing Directorr ch Switzerla and Medtec

Dear reader, wing Report on the UK's Medtech Market wa as commissioned by th he Swiss Bu usiness The follow Hub United Kingdom, as part off our ongoin ng trend sp potting effo orts. Trend spotting is at the e work. It means m for u s to identiffy industry sectors in tthe United core of our proactive of particular interest to t Swiss SM MEs, be it because of strong s grow wth or be itt Kingdom o because o of a lack of knowledge//skills in th he particular sector in question. echnology is s part of the Swiss tra adition of quality and durability, d a and age-old d Medical te techniques s have been updated to make Sw witzerland a leader in medical te echnology engineered to highes st precision standards . At a time of ageing populationss in Europe e, an g number off citizens are paying e ever greate er attention to their he ealth. Swiss s increasing providers of medtech h products are offering g innovativ ve and susta ainable solu utions for the t all areas. Th his report aims a at pro viding an easy e to improvement of the health of patients in a ctical guide for Swiss companies c seeking to increase th heir sales p potential ab broad. read, prac The reportt was resea arched and drawn up by Global Strategy, S In nc., a boutiique busine ess developme ent consultting firm, sp pecialising in partner, product an nd technolo ogy search,, market de evelopmentt, and busin ness intellig gence consu ulting. Our thank ks go to Mr David A Warar, CEO o of Global Strategy, Inc. for the g good co-ope eration and his team's excelllent work and a extensi ve analysis s of the marketplace. ading the re eport and benefit b from m its conten nt. We wish h you We hope tthat you will enjoy rea success with your bu usiness endeavour, be e it in Switzerland, the e UK or any ywhere else e in the world. Terweiden Thorsten T

Head of Sw wiss Busine ess Hub

TABLE OF CONTENTS

EXECUTIVE SUMMARY ....................................................................................................................................... 1 Consumables .................................................................................................................................................... 1 Diagnostic Imaging ........................................................................................................................................ 1 Dental Products ............................................................................................................................................... 1 Orthopaedic & Prosthetic Devices ............................................................................................................. 1 Patient Aids ....................................................................................................................................................... 1 1.

INTRODUCTION........................................................................................................................................ 2

2. MEDICAL DEVICE MARKET ANALYSIS .............................................................................................................. 3 2.1 OVERVIEW ......................................................................................................................................................... 3 2.2 THE MARKET IN 2011 ......................................................................................................................................... 4 2.3 ANALYSIS OF THE UK MEDICAL MARKET, 2011 ........................................................................................................ 5 2.4 SWOT ANALYSIS OF THE UK MEDICAL DEVICE MARKET, 2011 ................................................................................... 8 2.5 PAST PERFORMANCE 2006‐10 .............................................................................................................................. 8 2.6 FUTURE PERFORMANCE 2011‐16 ........................................................................................................................ 10 2.7 THE UK MARKET FOR CONSUMABLES ................................................................................................................... 15 2.8 THE UK MARKET FOR DIAGNOSTIC IMAGING APPARATUS ......................................................................................... 17 2.9 THE UK MARKET FOR DENTAL PRODUCTS .............................................................................................................. 19 2.10 THE UK MARKET FOR ORTHOPAEDIC & PROSTHETIC DEVICES ................................................................................ 20 2.11 THE UK MARKET FOR PATIENT AIDS .................................................................................................................. 22 2.12 IMPORTS ...................................................................................................................................................... 23 2.12.1 Consumables ...................................................................................................................................... 24 2.12.2 Diagnostic Imaging ............................................................................................................................ 24 2.12.3 Dental Products ................................................................................................................................. 25 2.12.4 Orthopaedic & Prosthetic Products ................................................................................................... 25 2.12.5 Patient Aids ........................................................................................................................................ 25 2.12.6 Monthly Import Analysis, 2011 .......................................................................................................... 38 2.13 DOMESTIC PRODUCTION ................................................................................................................................. 41 2.13.1 Trade Associations ............................................................................................................................. 44 2.14 MAJOR MANUFACTURERS ............................................................................................................................... 46 2.15 EXPORTS ...................................................................................................................................................... 49 2.15.1 Consumables ...................................................................................................................................... 51 2.15.2 Diagnostic Imaging ............................................................................................................................ 51 2.15.3 Dental Products ................................................................................................................................. 51 2.15.4 Orthopaedic Products ........................................................................................................................ 51 2.15.5 Patient Aids ........................................................................................................................................ 52 2.15.6 Monthly Export Analysis, 2011 .......................................................................................................... 63 3. ACCESSING THE MARKET .............................................................................................................................. 67 3.1 TRADE EVENTS .................................................................................................................................................. 67 3.2 MEDICAL DEVICE REGULATIONS ........................................................................................................................... 68 3.2.1 Medicines and Healthcare Products Regulatory Agency (MHRA) ......................................................... 68 3.2.2 Notified Bodies ...................................................................................................................................... 70 3.2.3 Medical Device Legislation .................................................................................................................... 71 United Kingdom Medtech Market 2011

3.2.4 3.2.5 3.2.6 3.2.7 3.2.8

Obtaining CE certification for a novel medical device ........................................................................... 72 New Contract Agreement for Medical Technology Trials ..................................................................... 73 Labelling ................................................................................................................................................ 74 Price and Cost Structures ...................................................................................................................... 75 National Audit Office issues reports into NHS procurement ................................................................. 76

4.HEALTHCARE ANALYSIS ................................................................................................................................ 78 4.1 DEMOGRAPHICS ............................................................................................................................................... 78 4.2 POPULATION .................................................................................................................................................... 79 4.3 HEALTHCARE SYSTEM......................................................................................................................................... 79 4.3.1 Coalition Reform Plans, 2010 ................................................................................................................ 80 4.3.2 National Healthcare Bodies .................................................................................................................. 81 4.3.3 NHS Schemes and Initiatives ................................................................................................................. 83 4.4 HEALTH EXPENDITURE........................................................................................................................................ 84 5.RECOMMENDATIONS ................................................................................................................................... 88 5.1 BACKGROUND AND RECENT DEVELOPMENTS .......................................................................................................... 88 5.2 TARGET SUB‐SECTORS AND MARKET OPPORTUNITIES .............................................................................................. 90 5.2.1 Consumables ......................................................................................................................................... 90 5.2.2 Diagnostic Imaging ............................................................................................................................... 91 5.2.3 Dental Products ..................................................................................................................................... 91 5.2.4 Orthopaedic & Prosthetic Devices ......................................................................................................... 91 5.2.5 Patient Aids ........................................................................................................................................... 92 5.3 MARKET ENTRY STRATEGIES ................................................................................................................................ 92 5.3.1 Exporting ............................................................................................................................................... 93 5.3.2 Partnering ............................................................................................................................................. 93 5.4 MARKET AND TRADING RISKS .............................................................................................................................. 97 5.5 SUCCESS FACTORS ............................................................................................................................................. 98 5.5.1 Roadmap to Success ............................................................................................................................. 99 5.6 CONCLUSIONS ................................................................................................................................................ 101 6. 6.1 6.2 6.3 6.4 6.5 6.6

DIRECTORY ........................................................................................................................................... 103 GOVERNMENT ORGANIZATIONS ......................................................................................................................... 103 UK NHS STRATEGIC HEALTH AUTHORITIES .......................................................................................................... 103 PROFESSIONAL BODIES/TRADE ASSOCIATIONS ...................................................................................................... 104 MULTINATIONAL MANUFACTURERS .................................................................................................................... 105 PROCUREMENT AGENCIES ................................................................................................................................. 105 NOTIFIED BODIES ............................................................................................................................................ 107

TRADE CODE CLASSIFICATIONS ....................................................................................................................... 108 METHODOLOGY ............................................................................................................................................. 112 APPENDIX 1 .................................................................................................................................................... 114

United Kingdom Medtech Market 2011

TABLES AND CHARTS

SUMMARY KEY DATA PROJECTIONS, 2011-2016 ..................................................................................2 UK MEDICAL DEVICE MARKET, KEY RATIOS, 2011 ................................................................................4 UK MEDICAL DEVICE MARKET BY CATEGORY, 2011 ...............................................................................4 UK MEDICAL DEVICE MARKET BY CATEGORY, 2011 (%) .........................................................................5 CHANGE IN THE UK MEDICAL DEVICE MARKET, 2006-2010 (%) ...............................................................9 CAGR OF THE UK MEDICAL DEVICE MARKET BY PRODUCT AREA, 2006-2010 (%) ..........................................9 PROJECTED MEDICAL DEVICE MARKET, 2011-2016............................................................................. 10 MARKET PROJECTIONS, 2011-16 (£ MILLIONS) ................................................................................. 11 THE UK MEDICAL DEVICE MARKET, 2006-16 (£ MILLIONS) ................................................................... 11 THE UK MEDICAL DEVICE MARKET, 2006-16 (£ PER CAPITA) ................................................................. 12 THE UK MEDICAL DEVICE MARKET, 2006-16 (% OF TOTAL) .................................................................. 13 THE UK MEDICAL DEVICE MARKET, 2006-16 (% CHANGE) ................................................................... 14 THE UK CONSUMABLES MARKET, 2006-16 (£ MILLIONS) ...................................................................... 15 THE UK MARKET FOR CONSUMABLES, 2006-16 (£ MILLIONS) ................................................................. 16 THE UK MARKET FOR CONSUMABLES, 2006-16 (CAGR) ...................................................................... 16 THE UK DIAGNOSTIC IMAGING MARKET, 2006-16 (£ MILLIONS) ............................................................. 17 THE UK MARKET FOR DIAGNOSTIC IMAGING APPARATUS, 2006-16 (£ MILLIONS)........................................... 18 THE UK MARKET FOR DIAGNOSTIC IMAGING APPARATUS, 2006-16 (CAGR) ................................................ 18 THE UK DENTAL PRODUCTS MARKET, 2006-16 (£ MILLIONS) ................................................................. 19 THE UK MARKET FOR DENTAL PRODUCTS, 2006-16 (£ MILLIONS) ............................................................ 19 THE UK MARKET FOR DENTAL PRODUCTS, 2006-16 (CAGR) ................................................................. 20 THE UK ORTHOPEDIC & PROSTHETIC DEVICES MARKET, 2006-16 (£ MILLIONS) ............................................ 20 THE UK MARKET FOR ORTHOPEDIC PRODUCTS, 2006-16 (£ MILLIONS) ...................................................... 21 THE UK MARKET FOR ORTHOPEDIC PRODUCTS, 2006-16 (CAGR) ........................................................... 21 THE UK PATIENT AIDS MARKET, 2006-16 (£ MILLIONS) ....................................................................... 22 THE UK MARKET FOR PATIENT AIDS, 2006-16 (£ MILLIONS) .................................................................. 22 THE UK MARKET FOR PATIENT AIDS, 2006-16 (CAGR) ....................................................................... 23 MEDICAL EQUIPMENT IMPORTS, 1991-2009 (£ MILLIONS) .................................................................... 23 CHANGE IN MEDICAL EQUIPMENT IMPORTS, 1992-2009 (%) ................................................................. 24 MEDICAL EQUIPMENT IMPORTS BY PRODUCT AREA, 2005-09 (£000S) ....................................................... 25 MEDICAL EQUIPMENT IMPORTS BY PRODUCT AREA, 2005-09 (%) ............................................................ 26 MEDICAL EQUIPMENT IMPORTS BY PRODUCT AREA, 2009 (%) ................................................................. 26 MEDICAL IMPORTS BY PRODUCT AREA, 2005-2009 (% OF TOTAL) ........................................................... 27 CHANGE IN MEDICAL EQUIPMENT IMPORTS BY PRODUCT AREA, 2005-2009 (%) ........................................... 27 CAGR OF MEDICAL IMPORTS BY PRODUCT AREA, 2005-09 (%) .............................................................. 28 LEADING MEDICAL EQUIPMENT SUPPLIERS BY PRODUCT AREA, 2009 (£ 000S) .............................................. 28 LEADING MEDICAL EQUIPMENT SUPPLIERS BY PRODUCT AREA, 2009 (%) .................................................... 29 LEADING MEDICAL EQUIPMENT SUPPLIERS, 2009 (%) .......................................................................... 29 TOP 20 SUPPLIERS TO THE UK MARKET, 2009 (£000S) ....................................................................... 30 IMPORTS OF MEDICAL EQUIPMENT, 2005-09 (£000S) ......................................................................... 31 MEDICAL EQUIPMENT IMPORT TRENDS, 2009..................................................................................... 32 LEADING SUPPLIERS, 2009 ......................................................................................................... 34 LEADING SUPPLIERS BY CATEGORY, 2009......................................................................................... 36

UK MONTHLY MEDICAL EQUIPMENT IMPORTS, JANUARY 2006 TO AUGUST 2011 ............................................ UK MONTHLY MEDICAL EQUIPMENT IMPORTS, JANUARY 2007 TO AUGUST 2011 ............................................ (% CHANGE OVER PREVIOUS YEAR)................................................................................................ MONTHLY MEDICAL EQUIPMENT IMPORTS, SEP 2010 TO AUG 2011 (UK £ 000S) ......................................... LATEST MEDICAL EQUIPMENT IMPORT TRENDS, UK £ TERMS (%) ............................................................. MONTHLY MEDICAL EQUIPMENT IMPORTS, SEP 2010 TO AUG 2011 (000S EUROS) ........................................ LATEST MEDICAL EQUIPMENT IMPORT TRENDS, EURO TERMS (%) ............................................................. UK MEDICAL EQUIPMENT PRODUCTION, 2006-10 (£000S) ................................................................... UK MEDICAL EQUIPMENT PRODUCTION, 2006-10 (£000S) ................................................................... MEDICAL EQUIPMENT EXPORTS, 1991-2009 (£MILLIONS) .................................................................... CHANGE IN MEDICAL EQUIPMENT EXPORTS, 1992-2009 (%) ................................................................ MEDICAL EQUIPMENT EXPORTS BY PRODUCT AREA, 2005-2009(£$000S) ................................................. MEDICAL EQUIPMENT EXPORTS BY PRODUCT AREA, 2005-2009(%) ......................................................... MEDICAL EQUIPMENT EXPORTS BY PRODUCT AREA, 2009(%) ................................................................. MEDICAL EXPORTS BY PRODUCT AREA, 2005-2009 (% OF TOTAL) .......................................................... CHANGE IN MEDICAL EQUIPMENT EXPORTS BY PRODUCT AREA, 2005-2009 (%) .......................................... CAGR OF MEDICAL EXPORTS BY PRODUCT AREA, 2005-2009 (%) .......................................................... LEADING MEDICAL EQUIPMENT DESTINATIONS BY PRODUCT AREA, 2009(£000S) .......................................... LEADING MEDICAL EQUIPMENT DESTINATIONS BY PRODUCT AREA, 2009(%) ............................................... LEADING MEDICAL EQUIPMENT DESTINATIONS, 2009 (%)..................................................................... EXPORTS OF MEDICAL EQUIPMENT, 2005-2009 (£000S) ..................................................................... MEDICAL EQUIPMENT EXPORT TRENDS ............................................................................................ LEADING DESTINATIONS, 2009.................................................................................................... BALANCE OF MEDICAL TRADE, 2005-2009 (£000S) .......................................................................... UK MONTHLY MEDICAL EQUIPMENT EXPORTS, JANUARY 2007 TO AUGUST 2011 ........................................... UK MONTHLY MEDICAL EQUIPMENT EXPORTS, JANUARY 2007 TO AUGUST 2011 (% CHANGE OVER PREVIOUS YEAR) .. MONTHLY MEDICAL EQUIPMENT EXPORTS, SEP 2010 TO AUG 2011 (UK£000S)........................................... LATEST MEDICAL EQUIPMENT EXPORT TRENDS, UK£ TERMS (%) .............................................................. MONTHLY MEDICAL EQUIPMENT EXPORTS, SEP 2010 TO AUG 2011 (000S EUROS)........................................ LATEST MEDICAL EQUIPMENT EXPORT TRENDS, EURO TERMS (%) ............................................................. UK POPULATION BY COUNTRY, 2001-10 ......................................................................................... UK POPULATION PROJECTIONS BY COUNTRY, 2013-33......................................................................... PROJECTED POPULATION, 2011-16 ............................................................................................... TOTAL UK PUBLIC AND PRIVATE HEALTH EXPENDITURE, 1997-2006 (£ BILLIONS) ......................................... PUBLIC/PRIVATE HEALTH EXPENDITURE, 1997-2006 (£ BILLIONS) ............................................................ PROJECTED HEALTH EXPENDITURE, 2011-2016 ................................................................................ ENGLISH RESOURCE AND CAPITAL BUDGETS 2008-2009-2010/2011 (£ BILLIONS) ......................................

United Kingdom Medtech Market 2011

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EXECUTIVE SUMMARY The UK has one of the largest medical device markets in the world, valued at £5.7 billion in 2011. The UK medtech market is the second largest in Europe behind Germany, with France a close third at £5.3 billion. UK per capita expenditure is equal to £91. The UK market for medical devices is predicted to increase by 3.6% per annum to attain a value of £6.8 billion by 2016. The market remains heavily reliant on imports in most sectors, as local manufacturing capacity is more geared to exports and has not proved able to supply the rapidly rising demand of the 2002-08 period. Per capita expenditure remains on the low side in comparison with the other major EU markets such as Germany. The UK market is dominated by the National Health Service (NHS), which accounts for around 85% of expenditure. Long term public investment projects generally continue to be funded under Private Finance Initiative (PFI) schemes. The private sector remains small – if well equipped – and largely based in England. There are noticeably lower levels of private spending in Scotland and Wales. The following sectors in the UK Medtech market are seen as promising fields for Swiss companies to target as they are projected to enjoy the highest growth in size and volume, are heavily reliant on imported products, and more open to innovation: Consumables Wound Care Reagents, Ostomy Products and Surgical Gloves Diagnostic Imaging Electrodiagnostic Equipment Dental Products Dental Equipment Dental Instruments Orthopaedic & Prosthetic Devices Orthopaedic Appliances Artificial Body Parts Patient Aids Portable Aids

United Kingdom Medtech Market 2011