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Global Medical Device Market
Outlook, 2018
May 2018
Presented at AusMedTech
Global Healthcare Revenue by Sector in 2017 and 2018
2017 2018 Growth Rate
Total Healthcare Industry
($ Billion)1,768.61 1,853.83 4.82%
1,195
371
29 65 108
1,246
390
31 72 115
0
500
1,000
1,500
Reve
nu
e (
$ B
illi
on
)
Healthcare ITIn-Vitro
Diagnostics
Medical
Technologies
Medical Imaging
Equipment
Pharma and
Biotech
2018
2017
Sector
Growth Rate
(2017–2018)4.3% 5.2% 4.4% 10.0% 6.4%
Note: All figures are rounded. The base year is 2017. Source: Frost & Sullivan
Total Healthcare Industry: Revenue Forecast by Sector, Global, 2017 and 2018
Global Healthcare Revenue by Region in 2017 and 2018
North
America38.5%
714.52 Bn
3.1%
2018 Percent of total global share Projected 2018 market size in $Billion 2018 Projected Growth Rate
Latin
America7.4%
137.08 Bn
10.9%
Europe22.8%
422.04 Bn
1.0%
Asia-Pacific(excluding Japan)
18.5%
342.39 Bn
11.1%
Japan9.4%
174.40 Bn
2.3%Row3.4%
63.40 Bn
13.8%
Note: All figures are rounded. The base year is 2017. Source: Frost & Sullivan
Total Healthcare Industry: Revenue Forecast by Region, Global, 2017–2018
4
Global Medical Device Industry Market Snapshot, 2017–
2018Medical Device Industry: Percent Sales by Segment, Global,
2018
Medical Device Industry: Percent Sales by Region, Global, 2018
*Others include durable medical equipment, hospital supplies, consumables, and
sterilization and decontamination equipment. Note: All figures are rounded. The base year is 2017. Source: Frost & Sullivan
Medical Device Industry: Revenue Forecast, Global, 2017–2018
2017 2018
Growth Rate: 5.2%
$370.8 B $390.1 B
Rev
en
ue (
$
Billio
n)
Others*, 28.1%
Ortho, 13.2%
Minimally Invasive, 11.6%
Cardio, 9.5%
Ophthalmology, 8.5%
Wound Care, 5.7%
Patient Monitoring, 5.5%
Audiology, 4.7%
Respiratory - Anesthesia, 4.7%
Neuro, 2.8%
Uro-Gyno, 1.9% Aesthetics, 1.9%Robotics-Navigation, 1.9%
United States39.0%
Japan8.9%
Germany9.9%
China8.1%
UK4.0%
France4.0%
Russia2.1%
Spain2.0%
Brazil1.1%
India1.2%
ROW19.8%
5
Global Medical Device Industry—Top 3 Segments
Snapshot, 2017–2018
Note: All figures are rounded. The base year is 2017. Source: Frost & Sullivan
Medical Device Industry: Top 3 Segments Revenue and Growth Forecast, Global, 2017–2018
49.0 42.0 35.051.3 45.3 36.90.0
20.0
40.0
60.0
80.0
Orthopedic Endoscopy Cardiac2017 2018
Rev
en
ue (
$
Billio
n)
Medical Device Industry: Top 3 Segments Revenue Share By Region, Global, 2018
Orthopaedic Endoscopy Cardiac
United States 62.5% 44.7% 40.1%
Europe 22.5% 23.8% 28.1%
Asia Pacific 11.0% 19.5% 24.0%
Rest of World 4.0% 12.0% 7.8%
Equipment/ Implants
Consumables/Accessories
Services
Revenue Split 60% 35% >5%
Growth Rate 2-5% 4-8% 10-15%
Medical Device Industry: Revenue Split by Segments and Growth Potential, 2018
Product
Incremen
tal
Products
Services
Product
SupplierService
Provider
Data
Management
Analytics
Product
Supplier
Solution
Provider
Product Product Product
Analysis of M&A Deals in Global Medical Device Industry,
2017
Where are Companies Placing Their Bets?
• Business expansion, increasing market share, market consolidation, and technology expansion to leverage first-mover
advantage are the main reasons driving the acquisitions for tier-1 companies.
• Growth by acquisition is still a medical device company’s go-to strategy, one trend that is expected to remain stable over the
next 3 to 5 years. In-house R&D investments have declined in 2017, globally.
In the recent years five
out of the top 30
companies have been
acquired hence
consolidating the top 10
players with 30- 40 percent
of the global medical
device market.
M&A in 2017 in Top 10 medical
device companies was driven by
Product portfolio strengthening.
Abbott acquiring St Jude medical to
strengthen its Cardiac portfolio and
Medtronic acquiring Crospon to
strengthen its Endoscopy portfolio
Notable Consolidation Mega Merger Notable Company
Most notable is Essilor's merger
with Luxottica Group, owner of
the Ray-Ban and Oakley brands,
in a $49 billion deal that would
create a giant in the eyewear
industry
Transformation in the Medical Device Industry Ecosystem—2018 Growth Stars
On Body In-Home Community In-Clinic In-Hospital
Key Areas of Activity in 2018
Wearables
Smart
Devices
Peripherals
Next
generation
Implants
Home Medical
Devices
Digital
Assistants
Consulting/
Coaching
Activity
Monitoring
Mobility
Automated
Kiosks
Supply Chain
Logistics
Emergency
Response
Intelligence
Lab-on-a Chip
Care Co-
ordination
Technologies
Ambulatory
Therapies
Connected
Equipment
Patient
Surveillance
Smart OR
Real-time
Location System
Analytics/
Informatics
Storage/
Database
Management
Cyber-
Security
Machine
Learning
Inter-
operability
Decision
Support
Source: Frost & Sullivan
Handheld
Medical
Technologies
Key Trends Driving MedTech Business Model Shift
Factors Driving Business Model Transformation
From To Objective
Contract ModelFee for Service
(Volume)Outcome Based
(Value)
Growing importance of performance metrics tied to reimbursement • Opportunities to support providers in extending care across the continuum and
population health management (PHM) • Increased focus on patient/consumer and patient satisfaction
Target CustomerPhysician
(Clinical Value)
Physician-led GPOs(Clinical and Economic
Value)
Increasing centralization of hospital purchasing process• Hospital consolidation - Shift to fewer decision makers• More standardization and increasing importance of administrators and economic
buyers
Portfolio Strategy Diversified TargetedIncreasing demand for solutions versus stand-alone products • Growing provider desire for fewer and deeper partnerships• Shifting market focus from medical devices to end-to-end digital health solutions
Care DeliveryInpatient
CareOutpatient
(Pre and Post Care)
Shifting patient mix from inpatient to outpatient• Technologies (e.g. mHealth, RPM, Homecare) and reimbursement promoting lower
acuity care settings• Providers and payers need to manage cost and justify value across the care
continuum
Source: Frost & Sullivan
Connected Devices Hospital Patient Monitoring Digitizing Cancer Intervention
• Connected devices and those
enabling healthy living and aging are
set for double digit growth and
increased global adoption in 2018.
• The cardiac sector will lead the way
in the adoption of connected devices
to support the care continuum.
• "Precision in Care" would be the
focus for cancer therapy
manufacturers with investments in
digitization of therapies, improving
visualization and surgical
techniques, and workflow
integration solutions.
• Analytics and real-time monitoring
capabilities would be the value
proposition of patient monitoring
companies, moving forward.
• Hospital-centric patient monitoring
will be driven by the shift to wireless
real-time monitoring, enabling the
clinical community to drive greater
efficiencies.
Image Source: Thinkstock, Frost Database
Medical Technologies Market—Key Growth
Opportunities
Source: Frost & Sullivan
AI in
Imaging
Portable and Handheld
Ultrasound
Digital
Tomosynthesis
• AI will move mainstream in the
imaging diagnostics segment,
leveraging advanced/ deep learning
capabilities to improve screening
outcomes.
• Operationalizing AI platforms across
medical imaging workflows would
result in 10–15% productivity gains
for radiologists in the next 2-3 years.
• Digital Tomosynthesis continues to
evolve as a more effective diagnostic tool
in breast imaging and digital x-ray
technologies, and is expected to spur
market growth in the next 2-3 years.
• With x-ray technologies, Digital Chest
Tomosynthesis (DCT) is also proving to
be more effective at guiding clinical
decision making around detecting lung
nodules.
• High growth opportunities in the
ultrasound imaging category with
capabilities beyond established
clinical segments.
• Key areas of growth include: POC,
primary care, musculoskeletal,
emergency medicine, anesthesia,
pain management, and fusion
imaging.
Image Source: Thinkstock, Frost Database
Medical Imaging Equipment Market—Key Growth
Opportunities
Source: Frost & Sullivan
Cloud Solutions for
Healthcare
Cognitive
Computing
Care
Management
• Increasing volume and complexity of
healthcare data underscore the potential
to develop new and innovative solutions
that leverage cloud platforms.
• Adoption of cloud-based clinical
applications including EMRs, HIE, PHM
solutions and teleradiology will peak in
the next 3-5 years but the game-
changer will be real-world data.
collaborations.
• Solutions that allow management,
integration and analytics of genomics,
medical records and population health
data will enable Precision Medicine.
• Precision Medicine solutions will play a
pivotal role in not just drug discovery
but, also, improvements in care quality,
outcomes and chronic disease
management.
• Meaningful cognitive solutions have an
estimated revenue potential of over $40
billion by 2025. While the benefits
accrued by various healthcare industry
stakeholders through cognitive
computing could be well over $150
billion by that time.
• The data deluge in healthcare is paving
the way towards analyzing information
and deriving “value” for stakeholders.
Note: EMR—Electronic Medical Record, HIE—Health Information Exchange, PHM—Population Health Management.
Image Source: Thinkstock, Frost Database
2018 Healthcare IT Market—Key Growth Opportunities
Source: Frost & Sullivan
Medical Technologies Sector Companies to Watch—
2018
Brief Summary:
Provides a continuous flash glucose
monitoring system called Libre, at 1/4 the
cost of existing systems, FDA approved in
September 2017 and received
reimbursement approval in most European
countries and Japan at the end of 2016
and 2017.
Unique Value Proposition:
Approval in CE and Japan generated
hundred thousands of unit sales, primarily
with out-of-pocket expenditure. FDA
approval and reimbursement coverage
across many countries is likely to double
unit sales in the next 2 years.
Brief Summary:
With the FDA approval of Impella RP® for
Right Heart Failure in 2017 and with its
Impella series of heart pumps, Abiomed is
the only solution provider of percutaneous
temporary ventricular support devices for
right heart failure and cardiogenic shock
therapy.
Unique Value Proposition:
With the expansion of product sales to
international markets, the company is
expected to grow at a higher rate and
FY2018 revenues are projected to grow by
more than 25%, making it one of the fastest
growing cardiovascular device companies in
the last 5 years.
Brief Summary:
The company’s advanced wound care
business, comprising 26% of its 2016
revenue of $4.7 billion, has been stagnating
over the last 5 years. Smith & Nephew
acquired worldwide distribution rights for
MolecuLight i:X, an innovative digital wound
assessment device.
Unique Value Proposition:
MolecuLight i:X expands the company’s
footprint from wound therapeutics into the
digital wound imaging and diagnostics space.
Unmatched product synergies across the
wound care continuum offers healthcare cost
savings and high topline growth opportunities.
It is a win-win value proposition, offering
significant scale and faster growth potential for
MolecuLight.
Continuous Glucose Monitoring
Abbott Laboratories
Miniaturized Circulatory
Support Devices
Abiomed
Digital Wound Management Solution
Source: Frost & Sullivan
Medical Imaging Sector Companies to Watch—2018
Brief Summary:
Arterys uses deep learning in it’s cardio AI, lung AI
and liver AI platforms in order to improve the
imaging accuracy of its cardiac MRI scans, provide
single click automated volumetric segmentation of
lung nodules and automated segmentation of liver
lesions. Arterys received FDA approval for its
cloud-based Cardio DL platform in January 2017.
Unique Value Proposition:
GE Healthcare’s Vios Works solution is powered
by Arterys. The company has also entered into a
partnership with Siemens Healthineers. In
November 2017, the company raised USD 30
million in Series B funding. Artery’s portfolio also
includes the FDA approved MICA platform, an AI
platform for medical imaging analytics, which
includes Arterys’ PHI Service for data security.
Brief Summary:
Butterfly Networks ushers in a new era of high-
performance, hand-held ultrasound systems. It
has developed the world's first Ultrasound-on-
a-Chip based imaging system (Butterfly iQ® for
iPhone) by combining almost 10,000 sensors,
covering across 13 clinical applications, with a
single transducer probe.
Unique Value Proposition:
A unique blend of affordability (at less than $2k),
diagnostic versatility, and assistive intelligence
makes the Butterfly iQ® the next ‘in’ stethoscope
in daily practices. It is expected to play a pivotal
role in the diagnosis of pneumonia and women’s
health during child birth.
Brief Summary:
As an OEM dedicated to women’s care, Hologic
continues to build on its product portfolio to address
the continuum of breast care through early
detection, diagnosis, surgical treatment planning,
and image-guided procedures.
In ECR’17, Hologic introduced its new dedicated
prone stereotactic biopsy system, ‘Affirm’ which
delivers the capability of performing both 2D and 3D
tomosynthesis-guided procedures on a single
platform.
Unique Value Proposition: Transformation from
product-centric to ‘customer-centric’, together with
an established sales and distribution network for
women's health, as well as extensive relationships
with clinical labs and OB/GYN channels, will
accelerate Hologic’s customer penetration and
retention.
Artificial Intelligence Portable/Hand-held Ultrasound Digital Tomosynthesis
Source: Frost & Sullivan
Healthcare IT Sector Companies to Watch—2018
Technology Platforms & Services
Brief Summary: The online retail
and services giant announced a
$14 billion acquisition of Whole
Foods and a partnership with Cerner to enter
the PHM market, while Amazon Web
services continues to be a leader in the
healthcare cloud computing market.
Internet ConglomerateCognitive Intelligence Platform
IBM Watson
Unique Value Proposition: Amazon’s products and technologies have a strong consumer-centric market presence. Its cloud platforms and e-commerce business models have the potential to create truly patient-centric clinical and non-clinical health services, ranging from wellness advisory and disease management to retail sales and clinical intervention.
Brief Summary: Despite some negative publicity, IBM Watson continued to see growth in revenues and client base from the healthcare industry. Watson for Oncology is expected to end the year with over 120 hospital clients, while partnerships with other market participants like Sanofi, Medtronic and CDC developed further.
Unique Value Proposition: Cloud+Cognitive is an integrated value proposition that IBM is bringing to every client engagement. The
powerful combination promises to deliver
optimum ROIs on the latest technologies,
including IoT and blockchain for clients.
Brief Summary: In Dec 2017, Alphabet announced a number of new services from various subsidiaries (DeepMind, Verily and Google) to be launched in the near future. Combined with recent investments in start-ups throughout 2017, the company promises to expand its play in healthcare in 2018.
Unique Value Proposition: Google’s consumer penetration of over a billion users globally and Alphabet’s technical brilliance across all its businesses has the power to create disruptive healthcare IT solutions such as, for instance, the highly accurate, open source platform for gene sequencing, DeepVariant.
Source: Frost & Sullivan
6 out of 10 new products positioned today to hospitals are a solution that improves outcomes or efficiency
Fem tech and Women’s Health would witness great investments and open markets in the US and Europe.
Increase in corporate wellness is likely to provide newer opportunities for Payors and OEMs
80% of the Top 25 Medical Device companies have some form of service portfolio and have strengthened the same to grow significantly from 2018.
Risk sharing, ecommerce and product digitization are business
model to drive double digit growth in 2018
16
2
34
5
Top 6 Transformational Shifts Impacting the Medical Device Industry in 2018“Patient Centricity” will be the key driving force for the growth of medical devices in 2018 and beyond.
Source: ORC International, Frost & Sullivan
2018 will witness immense growth in the secondary portfolios of the top 10 Med tech companies, due to stabilization and successful integration of their M&As since 2016.
What opportunities lie within the incorporation of advanced technologies,
such as artificial intelligence, Big Data analytics, and cloud computing?
What are the keys to monetizing unmet healthcare needs? What
are the opportunities tied to X-as-a-Service business models?
How do Smart Hospitals affect traditional healthcare vendors? What is
the size of the growth opportunities for vendors until 2025?
What are the current trends related to cybersecurity for medical
technologies? Which devices and systems are most vulnerable?
2018 Global
Healthcare
Market
Outlook
How does the new ecosystem of digital solution providers look like for remote
or virtual clinical trials?
Concluding Thoughts
Source: Frost & Sullivan