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Point of Care

Diagnostics Market: Recent Trends

September 2014

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European market

The European medical technology market is estimated at €100 billion.

In vitro diagnostics

Cardiology

Diagnostic imaging

Orthopaedics

Ophthalmics

Endoscopy

Drug delivery

Wound management

Dental

General & plastic surgery

In vitro diagnostics is the largest segment, followed by cardiology and diagnostic imaging.

Medical technology market estimates by area and sales growth, World, 2012-2018

World medical technology market by region, based upon manufacturer prices, 2012

European medical technology market by region, based upon manufacturer prices, 2012

US39%

Europe28%

Japan10%

China 5%Russia 5%Canada 5%Brazil 5%

Other 12%

Germany27%

France16%

UK28%

Netherlands 4%

Spain 5%

Switzerland 4%Sweden 3%Belgium 3%Austria 3%

Other 14%

Italy10%

The European medical technology market represents around 30% of the world market. It is the second largest market after the US (40%).

10%

8%

6%

4%

2%

2008 2009 2010 2011 2012 2013

European medical technology market growth rates, based upon manufacturer prices, 2008-2013

Annual growth rate

Trend

The market has been growing on average by 4% per annum over the past 6 years.

Breakdown of total healthcare expenditure in Europe

Inpatient and outpatient care, other

Pharmaceuticals and other medical non-durables

Medical devices (incl. imaging)

In vitro diagnostics

Medical technology

0.8%17%

7.5%

75.5%

6.7%

Expenditure on Medical Technology

In Europe, an average of 10.4% of gross domestic product is spent on healthcare. Of this figure, around 7.5% is attributed to medical technologies.

The spending on medical technology varies significantly across European countries, ranging from around 5% to 10% of the total healthcare expenditure.

Between 1980 and 2000, medical technology reduced hospital stays by 56% and dramatically cut costs

56%

3 Major EU markets overview

Within Point of Care Diagnostics, the UK and Spanish markets are a lot smaller in value than France, Germany and Italy.

GB

ES

FR

GE

IT

Government Role Public System financing

Health System and Public/Private Insurance Role Benefit Design

Private Insurance Role Caps on Out-of Pocket Spending

Exemptions & Low Income Protection

Health care system financing

Statutory health insurance system, with SHI insurers incorporated into

single national union

Employer/employee earmarked income and

payroll tax; general tax revenue

90% buy coverage for cost-sharing;

some extra benefitsNo

Exemption for low income, chronically

ill and disabled, and children

Statutory health insurance system, with competing SHI insurers (“sickness

funds”); high income can opt out for private

coverage

Employer/employee earmarked income and

payroll tax; general tax revenue

Cost-sharing + amenities (~20%); Substitute: 10% opt-out of SHI

system for private coverage only

2% incomeamenities (~20%);

Substitute: 10% opt-out of SHI system for private coverage only

Income-related insurance

contributions; OOP max 1% income for

chronic + low income; children exempt

National health service

Earmarked business and value-added

tax; regional tax revenue

~15% buy coverage for access to

private facilities and amenities

20% OOP subsidy if exceeds €129 ($179)

Exemptions for low-income, elderly/children, pregnant women, and some chronic conditions/

disabilities

5-year Strategy of the European Medical

Technology Industry

EU Framework undergoing radical legislative changes

to ensure future sustainability

Leader in medical device innovation Medical device

innovation to reach market efficiently

ContinuedEU economic

crisis

Increased public spending, decreased

health care expenditure

A decentralised approval process

Market overview – future challenges

7.7

8.0

7.3

7.6

7.0

7.5

6.5

7.0

6.5

7.1

6.4

6.8

5.8

6.0

5.5

6.4

5.4

5.5

5.0

5.7

4.2

4.7

Providing financing through a lender partner or directly

Full solution partnership

Sales rep relationship

Ability of the company to share risk

Service provided by the sales

representative

Ease of doing business

Clinical dataCutting-edge technology

Cost-benefit value proposition

ReimbursementProduct quality

Getting clinical data, sharing risk and providing a full solution will grow in importance for hospitals over the next few years

Current and Future Hospital needs from MedTech Companies

Average Score

2010

2015

Hospital needs when purchasing medical tech

Willing to pay 10-15% premium for disposables that reduce errors and infection rates.

Due to reduced reimbursement rates, hospitals want products that will help them track and record quality improvements and outcomes.

Product quality and reimbursement are the most important factors when buying from MedTech companies. However, clinical data, risk sharing, and full solution partnerships will become increasingly important

C - Suite

Procurement / Payers

HCPs

Lab

Regulators

Lobbyists

Point of Care Diagnostics - Influence Radar

Optimising Outcomes

MAXIMISE POSITIVES

MINIMISE NEGATIVES

Fewermissed

diagnoses

Fewer errors

Reducedwaste

Saves time

Saves money

Reducedanxiety Less delay

Less use of staff,

equipment and resources

Reduced morbidity and

mortality

Saves lives

Less misdiagnosis

Reduced LOS

Reducedliability

for malpractice suits

Improved patient

satisfaction

Earlyintervention

Improved TAT

Multi-marker testing

Increased workflow

and efficiency

Rapid decisions

Enhanced reputation of hospital

Correct decisions

More patients treated

Improved performance

for Lab & ED Streamlined

patient pathway

Improved hospital income

Reliableresults

Fast resultsImproved

professional standing of

HCPs

Point of Care Diagnostics - Market drivers

Summary

C-suite is an important gatekeeper

to the adoption of MedTech

Health outcomes driving the rising use of MedTech

Pressure to increase efficiencies continues

to drive the need for new MedTech

Greater integration of diagnostics and mobile

health will continue to drive future growth

ABOUT

ABOUT

To discuss this market analysis, how it might be relevant to your brand and the challenges you face please contact us at:

Matt LeemingStrategy Director

matt@life-healthcare.com

Juliet La MarqueChief Executive Officer

juliet@life-healthcare.com

Emily WiggingtonClient Services Director

emily@life-healthcare.com

Or call us at LIFE: +44 1344 899050 www.life-healthcare.com