Pharma & Healthcare Innovation Trend · 2017-02-06 · Pharma & Healthcare Innovation Trend New...
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1 Pharma & Healthcare Innovation Trend New technologies reshaping Healthcare sector – In collaboration with Intesa Sanpaolo Innovation Center – July 2016
Transcript of Pharma & Healthcare Innovation Trend · 2017-02-06 · Pharma & Healthcare Innovation Trend New...
1
Pharma & Healthcare Innovation Trend New technologies reshaping Healthcare sector
– In collaboration with Intesa Sanpaolo Innovation Center –
July 2016
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Context and Headlines (1/3)
• In 2016, high growth in emerging sectors such as IT and biotechnology will be offset by the more
established healthcare markets for devices and equipment with manufacturers increasingly tapping into
the low-cost potential of emerging geographies before subsequently introducing their products into
developed countries
• Frost & Sullivan expects that, across the year and beyond, the healthcare sector will be shaped,
amongst others, by three significant trends;
1. The roll out of Home Health platforms
• Telehealth and telecare are increasingly seen as a means with which to relieve some of the
pressure on the healthcare system and to improve patient care with government initiatives aimed at
leveraging Healthcare IT driving revenue growth in Europe of 4.2% CAGR (2015-20)
• Amongst the specialised providers, the space is very highly fragmented with ~100 players, ranging
from large companies (e.g. Tunstall) to small businesses (e.g. Aerotel)
• The B2B channel dominates the market but distribution strategies are changing with vendors’
exploration of tie-ups with medical device and pharma companies increasing the need for greater
cooperation on interoperability and connectivity and improved supporting infrastructure
o In Italy, the telehealth and telecare segments will grow at 4.7% and 3.4% CAGR (2015-20,
revenue) respectively, as continued investment in Integrated Personal Health and Social care
services offsets the absence of an established reimbursement scenario
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Context and Headlines (2/3)
2. The proliferation of Next Gen Wearables
• Despite concerns about data privacy, deeper insight into chronic diseases and technological
innovations which are transforming their functionality are supporting Global revenue growth of 28%
and 33% CAGR (2015-20) in the consumer and medical wearable segments respectively
• There is a long history of wearables that have failed but manufacturers are learning from past
mistakes and focussing on addressing key success factors
• On the consumer side, increasing adoption will shift the value proposition from complex products to
simple services, enabling self-health management, while widespread uptake on the medical/clinical
grade side, will require the proactive participation of providers, patients and payers
3. The uptake of Point of Care (POC) tests
• Uptake is bring driven by promising applications in molecular diagnostics and increased capacity
in data connectivity which is bringing POCT into the telehealth and care domain and underpinning
revenue growth in Europe of 5.8% CAGR (2015-20)
• From a competitive point of view, the POCT market is highly concentrated with five players, lead by
Roche, taking a combined 80% share
• Market participants are pushing a range of new technological advancements with magnotech and
BioMEMS finding wider applications and, moving forward, POCT informatics (or iPOCT) expected to
emerge as the next evolution, bringing benefits to patients, hospitals, physicians and payers
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Context and Headlines (3/3)
3. The uptake of Point of Care (POC) tests (continued)
o In Italy, the POCT market will grow at 5.3% CAGR (2015-20, revenue), with the benefits of a
comprehensive reimbursement system offset, to some extent, by the introduction of a programme
of co-payment for laboratory diagnoses
4. Orthopedic implants
• Emerging geographies are key to the sector overall whilst mergers & acquisitions are supporting
the success of individual participants looking to increase share in a market for orthopedic implants
which is growing at 3.3% CAGR (2013-20) in revenue terms
• J&J is the sector leader but Medtronic, Mazor and RTI are examples of emerging players with strong
exposure to the attractive spine segment as well new robotics applications
• More broadly, the use of novel manufacturing materials and techniques for developing medical
devices is growing with 3D printing particularly suited to orthopedics since it offers suppliers such as
Arcam the opportunity to personalise and customise solutions
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Introduction
6
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
In 2016, high growth in emerging sectors such as IT and biotechnology will be offset by
the more established healthcare markets for devices and equipment
Medical Devices Healthcare IT Pharmaceuticals Medical Imaging In-Vitro Patient
2015
& Biotechnology
1,105.00
317.00
Equipment
27.40
Diagnostics
58.10
Monitoring
19.30
49.10
2016 1,190.00 330.00 28.70 62.30 20.30 53.10
Re
ve
nu
e (
$ B
illi
on
)
2015 2016
Sector Growth 2015-16
Pharmaceuticals & Biotechnology 7.7%
Medical Devices 4.1%
Medical Imaging Equipment 4.7%
In Vitro Diagnostics 7.2%
Patient Monitoring 5.2%
Healthcare IT 8.1%
Total Healthcare Industry 6.9%
Frost & Sullivan
Total Healthcare Industry: Revenue Forecast by Sector, Global, 2015–2016
All figures are rounded. Base year = 2015
7
0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00
ROW
Latin America
Asia (Excluding Japan)
Japan
Europe
North America
Revenue ($ Billion)
ROW Latin America Asia (Excluding Japan)
Japan Europe North America
2016 36.38 108.98 303.19 165.07 390.11 680.67
2015 31.52 94.55 267.90 157.59 378.22 646.12
From a geographic point of view, manufacturers are increasingly tapping into the
low-cost potential of emerging markets before subsequently introducing their products
to developed countries to tackle the burden of growing costs
5.4%
3.1%
4.8%
13.2%
15.3%
15.4%
Total Healthcare Industry: Revenue Forecast by Region, Global, 2015–2016
Growth 2015-16
All figures are rounded. Base year = 2015 Frost & Sullivan
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In Europe, 2016 will be marked by continued challenges on the supply and demand side
with Italy at the forefront of rolling out electronic patient records
So
cio
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Po
liti
ca
l E
co
no
mic
R
eg
ula
tory
Te
ch
no
log
y
He
alt
h
Managing the healthcare needs of 850,000 migrants
will strain the overwhelmed health systems in
Western Europe.
Out-of-pocket expenditures escalate despite access
to ‘universal’ healthcare services.
A global high in alcohol consumption, the highest
proportion of smokers, and an alarmingly high
overweight population burden Europe’s HC
systems.
Local health authorities in Italy will adopt the
Integrated System of Healthcare Information tool to
securely transmit patient data across a network of
providers to ensure quality of care provision across
the provider spectrum.
CE Mark bodies to implement stricter, more Food
and Drug Administration (FDA)-like measures for
regulatory approval and surveillance of medical
technologies.
Frost & Sullivan
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Globally, Frost & Sullivan expects that the healthcare sector will be shaped by the
continued roll out of home health platforms, the proliferation of next gen wearables and
the uptake of cheaper and faster Point of Care (POC) tests
Next Gen Wearables
Move The Market
Towards Mass Adoption
The medical (consumer and
clinical) wearables market will
reach $6.5 billion in 2016.
Cheaper & Faster POC
Tests Enable New
Diagnostic Care Models
New care service models to
emerge globally, leveraging next-
generation Point of Care (POC)
technology platforms.
Telecom Service
Providers Launch Home
Health Platforms
Nearly 6 million homes globally
will have some form a telehealth
set-up in place, facilitated by
services from telecom providers.
2015 F&S prediction
2016 F&S prediction
2016 F&S prediction Frost & Sullivan
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1. The roll out of Home Health platforms
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• Telehealth refers to the delivery of healthcare services,
health care education, and health information services
at a distance using technological solutions or platforms.
• Telehealth enables care providers to assess and diagnose
patients remotely, recommend treatment, ePrescribe
medications, and closely monitor the patient’s medical
condition from a remote location, so that changes in
therapy or medications can be suggested according to
variations detected.
Telehealth Telecare
• Telecare refers to technology that allows patients to
manage their conditions independently through the use
of telecommunication technology including telephones,
computers and mobile monitoring devices, such as
alarms, personal emergency response systems, and
video conferencing solutions.
• Telecare involves the continuous remote monitoring of
patients and enables them to manage healthcare risks
by tracking lifestyle changes over time, and sending
alerts to care providers about real-time emergencies
as and when they happen.
The home healthcare market breaks down into two main segments and refers to
solutions which enable the delivery of services (“telehealth”) or the management of
conditions (“telecare”) at a distance
Chronic Disease Management
Post-acute Care Management
Virtual Visits for Physician and Patient
Wellness Programmes
Social Alarms for Elderly Patients
Activity Monitoring of At-risk Patients
Assisted Living for Elderly Populations
Medication and Compliance Management
Definition/Segmentation
Telehealth and Telecare Market: Market Segmentation, Europe, 2015
Frost & Sullivan
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5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0 0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
Revenue
2014
1,048.2
2015
1,083.6
2016
1,123.7
2017
1,167.7
2018
1,215.7
2019
1,268.5
2020
1,325.8
Growth Rate - 3.4 3.7 3.9 4.1 4.3 4.5
Gro
wth
Ra
te (
%)
Re
ve
nu
e (
$ M
illi
on
)
In Europe, the home healthcare market was valued at $1.1 billion in 2015 and will expand
to reach $1.3 billion by 2020, a 4.1% CAGR
Market Analysis & Forecast
Year
All figures are rounded. Base year = 2015
Telehealth and Telecare Market: Revenue Forecast, Europe, 2014-2020
Europe’s telehealth and telecare market is growing consistently and gaining momentum based on the
success of pilot projects across the region
Frost & Sullivan
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Drivers Short Mid Long
Need for a new healthcare delivery model to cope with the pressure on health and
social care service providers to deliver quality care despite budgetary constraints H H H
Government initiatives to utilise Healthcare Information Technology (HIT) for enabling
assisted and independent living H H M
Use of telehealth and telecare to manage shortage of healthcare staff and resources
involved in care delivery H M M
Rising ageing population with high incidence of chronic diseases requiring
continuous monitoring H M M
Home healthcare is seen as a means with which to relieve some of the pressure on the
system but also to improve patient care
Market Trends
Telehealth and Telecare Market: Key Market Drivers and Restraints, Europe, 2015–2020
Restraints Short Mid Long
Lack of interoperability and connectivity standards for information sharing H H H
Failure to commercialise pilot projects for telehealth and other remote monitoring
services H H M
Immature landscape for reimbursement of telehealth and telecare services (including
physician pay) H M M
Need for proven business models that demonstrate return on investment (RoI) H M M
Frost & Sullivan
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• The EU-27 age dependency ratio is expected to double to 52.6% by 2060 from approximately 25.9% in 2010.
• To cope with the healthcare requirements of elderly populations, the Ambient Assisted Living Joint Programme (AAL JP) was
initiated in 2007 and works with 23 member states* and the European Commission. AAL JP is working on several research
initiatives and supports EU-funded research activities within the 7th Framework Programme (FP7) by liaising between the
European Commission and partner states.
• As AAL JP (2007-2013) was successful because of high participation from small and medium enterprises and the
commercialisation of some projects, the European Commission decided to extend the programme till 2020. It receives
support from the Horizon 2020 research framework programme.
• The objective of AAL JP (2014–2020) is to develop innovative digital health products for the elderly; it is expected to benefit
the European Innovation Partnership on Active and Healthy Ageing that works to utilise information technology for enabling
assisted living and integrated care.
• AAL JP (2014-2020) will receive total funding of €700 million over 7 years - €350 million from the industry and €350 million
funded by member states and the European Commission.
• Wearables and sensors, telemedicine and telemonitoring, smart home and medical assistive technologies, and patient safety
technology are the areas focussed on by projects from various member states.
• Overall, these initiatives by European Commission and member states are expected to drive the market for telehealth and
telecare in next 3–4 years.
AAL JP, Europe, 2007-2013
• 150 projects in 23 member states
• €700 M funding between 2008 and 2013 over six RFPs
• 50% is public funding from the AAL JP partner states and the European Commission; 50% is private funding from
public and private companies
Government initiatives aimed at leveraging Healthcare IT (HIT) to enable assisted and
independent living are key to driving uptake
Incentives & Regulations Selected programme
Frost & Sullivan
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Selected players
Convergence
of Markets
High
Competition
Specialised Telehealth
and Telecare
Providers
Hardware Vendors,
Software Vendors,
and IT Service
Providers
Medical Device
Manufacturers and
Pharmaceuticals
Telecommunication
Service Providers
• British Telecom
• Orange Business
Services
• Deutsche Telecom
• Telefónica
• Vodafone
• TeliaSonera AB
• Telecom Italia
• Roche
• AstraZeneca
• Pfizer
• GE Healthcare
• Draeger
• Philips Healthcare
• Smiths Medical
• Tunstall Healthcare
• Aerotel Medical Systems
• Docobo
• BodyTel
• Honeywell Life Care
• IBM, Dell, Qualcomm Life, Intel …
Video Telemedicine
and Video
Conferencing
Solutions
• Cisco
• Polycom
• Vidyo
• SwyMed
• Rubbermaid Healthcare
The market is reliant on input from a range of stakeholders with greater cooperation on
interoperability and connectivity required
Enabling Infrastructure
Telehealth and Telecare Market: Value Chain, Europe, 2015
Frost & Sullivan
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Infrastructure/Opportunity Description
Cloud and Software-as-a-
Service solutions
There are several vendors in the market that are providing cloud and SaaS-based
solutions for the telehealth and telecare sectors; these solutions include
teleconsultations, tele-assistance, and video conferencing. In this space, there are
traditional telehealth and telecare vendors such as Care Innovations and technology
solution providers such as Qualcomm Life. There are also specialised vendors of
video conferencing and telemedicine solutions. such as VSee and SwyMed, that offer
cloud-based and on-the-move telehealth solutions. The advantages of cloud-based
telehealth solutions are decreased complexity and low cost structures—even for
subscription models. SaaS and cloud models will be the next key phase in solution
design for the industry.
Portable networks and
wearable devices
Telehealth and telecare requires the continuous monitoring of vital statistics of patients
during their normal course of activities. Hence, the availability of reliable, portable
networks (such as Wi-Fi and Bluetooth) and wearable devices (such as sensors and
diagnostic monitors) are critical for the non-disruptive monitoring of patients. Advances in
Wi-Fi and Bluetooth are driving telehealth and telecare; however, penetration is non-
uniform and deters adoption. Although there are several wearable products in the
market, many are “me too” products, and have failed to demonstrate any value or
differentiation. As a result, there is an unmet need for solutions that can perform
continuous biomedical signal processing, and body motion, posture, and temperature
assessments to enable physicians to deliver real-time management of patient health
Improving the supporting infrastructure is also necessary and represents an opportunity
for participants to meet un-met needs
Enabling Infrastructure
Telehealth and Telecare Market: Infrastructures and Opportunities, Europe, 2015
Selected infrastructures and opportunities Frost & Sullivan
17
Tier I Tier-I companies are multinational companies that are providers of specialised telehealth and telecare
services.
Tier II Tier-II companies have established positions in telehealth and telecare and have a strong market
presence in Europe; however, they have a limited global presence and narrow product portfolios.
Tier III Tier-III companies mainly serve niche markets and are focused on one or a few countries in Europe.
Tier III
Jontek
TBS GB
Tier I Tunstall Healthcare
Philips Draeger
Honeywell Life Care Solutions
Attendo Systems
H2AD
Vivago
Tier II
Aerotel Medical Systems
Care Innovations
Biotronik
Care2Wear
BodyTel
Docobo
Fold Telecare
Tynetec Welbeing
SHL Telemedicine Orange Healthcare
Appello
Medvivo
Medishare
T-Systems
Qualcomm Life
British Telecom (BT Health)
Telecom Italia
TeliaSonera
Telbios
TeleMedware S.r.l ProWellness
Possum Controls
Telenor
Telemedicine Clinic
Costaisa CUP 2000 S.p.A
Just Checking
Amongst the specialised telehealth and telecare providers, the space is very highly
fragmented with approx. 100 players, ranging from large multi national corporations to
small and medium sized businesses
Key Players & Forecast
Telehealth and Telecare Market: Key Market Participants By Tiers of Competition, Europe, 2015
Selected players Frost & Sullivan
18
Tunstall Healthcare
• Tunstall Healthcare is an established market participant in the telehealth and telecare space.
• The company’s strong portfolio in remote monitoring and assisted-living makes it a preferred vendor for regional healthcare authorities, healthcare organisations, charities, and housing providers.
• The company focusses on personalising its remote-monitoring services for patients with specific chronic diseases by utilising reliable and stable solutions to deliver standardised care irrespective of the location of care delivery.
• The company was part of several acclaimed pilot projects across Europe including Whole State Demonstrator trials. It is a preferred partner of healthcare authorities such as the National Health Services (NHS) and is investing £100 million in the Connected Healthcare 2020 strategy.
Aerotel Medical Systems
• Aerotel Medical Systems is an emerging market growth leader in Europe for telehealth and telecare services.
• The company’s strong foothold in medical diagnostic systems has enabled it to expand its services to telemedicine and remote medical monitoring.
• The company focusses on chronic disease management especially for cardiac remote monitoring. It is equipped with a robust product portfolio comprising remote diagnostics, emergency services, and rehabilitation and monitoring applications.
• The company shows immense growth potential in providing end-to-end hardware and software platforms for remote monitoring.
• The company’s products are mainly targeted at clinics and homecare centres.
UK-based Tunstall is an established player with almost 60 years of experience and
Aerotel is a rapidly emerging competitor
Key Players & Forecast Selected players
Frost & Sullivan
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• 90% of sales is accounted for by B2B customers, including hospitals, assisted living facilities, and
home-health agencies, which are reached through direct sales, partnerships with system integrators
and Value Added Resellers (VARs).
• Several vendors are considering a B2C model and selling directly to patients. However, most end-
consumers expect the government, regional healthcare authorities, or employers to pay for the service
and do not want to pay out-of-pocket.
• B2C revenue generation is based on a subscription model and long-term patient compliance to the
solution will generate a sustainable income for vendors. Under the B2B model, hospitals and
homecare agencies take an active role in ensuring patient adherence to the system and influence
the end-user’s behaviour. Under the B2C model, compliance to the solution is decided by the
customer so there is a certain level of risk involved for both the patient and the vendor whilst under
the B2B model the risk is shared by hospitals and other channel partners.
• Partnerships between telehealth and telecare vendors and medical device and pharma companies are
part of vendors’ strategies for reaching larger customer bases. For instance, pharmaceutical companies
with diabetic drugs collaborate with telecare or telehealth vendors to provide chronic disease management
programmes. Similarly, medical device manufacturers of blood glucose metres or blood pressure cuffs
integrate with telehealth and telecare vendors to remotely monitoring vital statistics. Roche, as an example,
has a partnership with Qualcomm Life’s 2net platform to capture vital data from patients’ medical devices
and uses this information for chronic disease management.
• With rising interest in quantified self trends and the expansion of technologies such as wearables, it is
imperative for vendors to utilise multiple sales channels to reach target customers.
The B2B customer base dominates the market but distribution strategies are changing
with vendors exploring tie-ups with medical device and pharma companies, and looking
at B2C subscription-based models
Customer Analysis Frost & Sullivan
20
Italy snapshot
21
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
100.0
Telecare
2014
43.5
2015
44.6
2016
45.9
2017
47.3
2018
48.9
2019
50.6
2020
52.8
Telehealth 30.5 31.7 32.9 34.6 36.2 38.0 39.8
Re
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nu
e (
$ M
illi
on
)
In Italy, the telehealth segment is valued at $31.7 million and telecare at $44.6 million
with growth rates of 4.7% and 3.4% CAGR (2015-2020) respectively
Year
Telehealth and Telecare Market: Revenue Forecast, Italy, 2014-2020
In Italy, many projects are in a pilot stage but successful commercial deployments are
expected over the forecast period
All figures are rounded. Base year = 2015 Frost & Sullivan
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• The total market for telehealth and telecare in Italy is estimated to reach $92.6 million in 2020 from approximately $76.3 million in 2015, growing at a CAGR of 3.9% between 2015 and 2020.
• Italy has been investing in Integrated Personal Health and Social care services (IPHS) for promoting co-ordination between health and social care; this is expected to benefit the market for telehealth and telecare in the country.
• Several pilot projects are being carried out in telehealth and telecare and are funded by the national health system (Servicio Sanitario Nationale—SSN) and European Commission.
• Key pilot telecare projects that are mainstreamed and commercially available to limited users include the Non Piu Soli project in Rome, San Ferdinando of Puglia project, Valli d’argento in Genoa district, and the E-Care project in Bologna and Ferrara.
• In telehealth, there are several pilot projects such as the Telesal project, pilot projects on telehealth within Firenze Telecare, Airtem project, Il cuore di Bari (Telecardiology project), Telecardiologia Anziani, and Orologio Assistivo ADAMO (assistive watch ADAMO).
• These projects were initiated with the objective of having integrated care systems that enable care co-ordination between social care (care and support services) and healthcare services.
• TBS Group with its integrated solutions for eHealth and eGovernment has a strong market presence in Italy. In 2002, the company acquired TeSan, a specialised vendor for telemedicine and telecare solutions, thereby broadening its service offerings to telemedicine and teleassistance sectors.
• Cup2000 S.p.A, Medishare, Telecom Italia, Telbios, and Telemedware also have a significant market presence in the Italian telehealth and telecare space, especially through their association with significant pilot projects in the region.
The country has been investing in Integrated Personal Health and Social care services
for promoting co-ordination between health and social care …
Frost & Sullivan
23
Market
Maturity
• The adoption of mainstream telecare and telehealth services is steadily rising
(compared to other developed markets in Europe such as the United Kingdom and
Germany) and needs concerted effort to scale-up adoption across the country.
• In telecare, social alarms are mainstreamed to an extent, while other telecare services
are limited to experimental settings.
• In telehealth, there have been several regional pilot projects, but only a few have been
scaled into larger commercial deployments.
Market
Challenges
• The national health system of Italy—Servicio Sanitario Nationale (SSN)—is organised
at national, regional, (19 regions and 2 provinces) and local levels.
• Although public financing is carried out at the national level, there are provisions to generate additional funding at the regional level, resulting in non-equity of services offered in the country.
• In 2008, a financial law was introduced to fix the standard rates of care across the
country; however, this has not yet been implemented.
Insurance
System
• National health insurance is mandatory for all residents and covers 100% of the
population, giving little room for supplementary commercial insurance.
• As a result, private health insurance companies have a very limited role to play. Only 15% of the population have voluntarily opted for additional private insurance. About 80% of these private policies are purchased by individuals, while 20% is covered by employers.
… and the adoption of mainstream telecare and telehealth services is rising steadily
when compared to other developed markets such as Germany
Frost & Sullivan
24
Funding or
Insurance
Reimbursement
for Telehealth
and Telecare
• Long-term care in Italy receives lower public financing compared to other
countries in Europe. Patients eligible for long-term care either receive an
allowance from the National Pension Institute or the municipalities based on
their income level.
• Very few telehealth initiatives have been commercialised in the country. The
absence of an established reimbursement scenario for telehealth acts as an
impediment for the growth of these services in Italy. Most pilot projects have
been funded by SSN.
• In telecare, social alarms have high adoption rates compared to other
telecare services; however, regional adoption is fragmented due to non-
uniformity in pricing and reimbursement policies across the country.
• Social alarms cost approximately €15–€40 a month and patients are
charged or given free access based on their Indicator of Equivalent
Economic Status (ISEE) level.
• In the case of home health, only a few devices are categorised under
assisted IT solutions and are available free of charge based on the
prescription of the general practitioner; they are provided by SSN.
• However, this list of covered products is minimal and patients often need to
spend on an out-of-pocket basis, which may or may not be partially
reimbursed.
Nonetheless, challenges remain, with the absence of an established reimbursement
scenario for telehealth acting as a restraint to growth
Frost & Sullivan
25
Company Positioning Core Competencies
CUP 2000 Telecare • CUP 2000 S.p.A is a specialised provider of eHealth and remote monitoring
solutions in Italy. It was involved in an E-care project for the provision of telecare services in the province of Bologna and in the municipality of Ferrara in Italy.
MediShare Telehealth • The company is a specialised provider of teleconsultation solutions with a specific
focus on radiology and diagnostic imaging.
TBS GB Telehealth
Telecare
• It is a provider of integrated, chronic disease management services for a variety of conditions such as congestive heart failure, Chronic Obstructive Pulmonary Disease (COPD), diabetes, and asthma. The group offers telehealth and telecare services in 13 countries. It has a major market presence in Italy through the acquisition of TeSan; TBS GB now has a presence in 15 regions and a customer base of 43,000 users.
Telbios Telehealth
• Telbios is a leading provider of telemedicine in Italy and is involved in several key projects including Buongiorno CReG—a chronic disease management programme involving General Practitioners (GPs) in Bergamo, Como, and Milan. The company is also involved in several pilot and research projects in association with many municipalities and ministries including Telecardiologia Anziani, DDT, and Home Care.
Telecom Italia Telehealth
• The company is a leading telecommunications provider in Italy and focusses on eHealth and digital solutions for telemedicine through its Nuvola IT Home Doctor and Nuvola IT Digital Clinic product portfolio. The company is involved in several pilot projects for telehealth in Italy, including Telecardiologia Anziani.
Telemedware
Telehealth
Telecare
• The company is involved in the European DREAMING teleassistance-at- home project for the elderly. It has a presence in six European countries and is part of the Ambient Assisted Living (AAL) project. The company’s FacileCare platform facilitates the remote monitoring of elderly populations.
TBS Group via its integrated solutions for eHealth and eGovernment has a strong market
presence in Italy with others running pilot projects
Selected Italian players Frost & Sullivan
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2. The proliferation of Next Gen Wearables
27
Medical-Grade Wearables
Pros
• Defined and actionable use cases with high acuity
health monitoring; can make formal insurance claims.
• Less competition, with highly protected environment for
IPs; increases entry barriers.
• Professional use case: Prescribed clinical wearables
promote longer-term consumer engagement compared
to non-regulated wearables.
Cons
• Stringent regulatory and compliance requirements may
delay the time to market.
• Requires buy-in from multiple stakeholders such as
patients, physicians, and insurance companies.
• Patient data privacy and ownership issues.
• Limited marketing channels for prescription-based
wearables.
Pros
Consumer Health Wearables
Pros
• Lower regulatory hurdles and faster time to market
• The supplier ecosystem is more mature, providing easy
access to innovative and cost-efficient inputs.
• Consumer-facing use cases: Can extensively use
established B2C marketing channels such as
eRetailing.
Cons
• Increasing competition and commoditization of
consumer-grade wearables.
• Short product life cycle (average 18 months).
• Lacks actionable heath benefits, resulting in high
customer churn rate; cannot make formal medical claims.
• Addresses generic wellness and fitness use cases, but
cannot make formal medical claims.
Cons
Pros
Cons
One of the biggest decisions companies must make early during product development is whether to
position their product as a consumer device for health and wellness or to design a true medical-grade
product validated for use in clinical decision making.
Wearable devices are attached to the body as clothing or accessories and can be divided
into consumer and medical/clinical grade devices
Definition/Segmentation Frost & Sullivan
28
Globally, the consumer segment is valued at $2.0 billion and medical at $3.1 billion, with
growth rates of 28% and 33% CAGR (2015-2020) respectively
Consumer Health Wearables
• This segment is expected to grow at CAGR of 27.8%
(2015–2020).
o Commoditization of unregulated wearables is
expected to increase competition for leading
participants such as Nike, Jawbone, Fitbit, and
Samsung.
o Demand for specific wellness and fitness wearables
lacking clinical relevance (wristbands, sports
watches, and smart garments) is expected to shrink
in the near future.
Medical and Clinical-Grade Wearables
• Regulated/clinical-grade wearables is the more
promising product segment within healthcare wearables
and is expected grow at a CAGR of 32.9% (2015–2020).
o During 2015, medical wearables transitioned from
single usability to multi-functional health applications
(i.e., V0.1 to V0.2).
o Increasing need of an integrated healthcare system
and rise in demand from the diagnostic industry is
expected to drive the growth of this segment.
2.4 3.1 3.9
5.0 6.5
8.3
10.6
1.5 2.0
2.6
3.4
4.6
6.2
8.3
0.00
2.00
4.00
6.00
12.00
10.00
8.00
14.00
2014 2015
Rev
en
ue (
$ B
illio
n)
2016(E) 2017(F) 2018(F) 2019(F) 2020(F)
Year
20.00
18.00
Medical and Clinical-Grade Wearables
16.00
Consumer Health Wearables
Market Analysis & Forecast All figures are rounded. Base year = 2015
Wearables Market: Revenue Forecast, Global, 2015–2020
Frost & Sullivan
29
The market is driven by deeper insight into chronic diseases although concerns about
data privacy remain an ongoing brake on adoption
5th Year
Deeper insight into chronic illnesses with multipoint data
tracking solution is unique to wearable technology
Limited hospital resources necessitates remote patient
monitoring and diagnosis to reduce cost and increase patient
reach
Rising pressures to decrease healthcare costs globally
demand cost-efficient technologies and processes
Prescribed clinical wearables promote longer-term
consumer engagement than other non-regulated wearables
Skeptical physician and payer perspectives on new
technology lead to lower adoption
Lack of robust guidelines and policies for regulated
wearable medical devices curtails innovation and time to
market
Data privacy issues involving patient data confidentiality and
security remain a priority
Big Data challenge with large-population clinical studies
demands standardization of data management and
assessment processes
Mark
et
Dri
vers
M
ark
et
Re
str
ain
ts
Impact: High Medium Low
Market Trends
Wearables Market: Key Market Drivers and Restraints, Global, 2015–2020
Frost & Sullivan
30
There are a broad range of technological innovations which are transforming both the
functionality of and applications for healthcare wearable devices
Wireless Charging
• Enables always-on wearables through an
uninterrupted supply of energy
• Aids wearables in 24x7 tracking and
monitoring for health applications
Printed and Flexible Electronics
Brain-Computer Interface
Biosensors
• Promote miniaturization and flexibility of
wearable design and electronics
• Low-cost and disposable wearables can
seamlessly be worn on the body. E.g.,
sensing patches, temporary tattoos
• Enables non-invasive brainwave sensing
technology to monitor brain signals
• Makes it possible to control wearables
with thought E.g., playing games
(hands-free)
• Use remote sensing capability to
recognize and transmit data related to
biological elements or processes
• Huge application of wearables in the
RPM, hospital, and homecare segments
Gesture Recognition
• Human-machine interface (HMI) that uses
gestures to control computing devices
• Wearables can now interact by leveraging
voice and hand and muscle gestures
Energy Harvesting
Cloud Computing
Advanced Processors
• Leverage kinetic energy from human
movement to charge batteries
• Key energy source for ultra-low-power-
consuming wearables
• Enables devices to access and store data
on cloud from anywhere, using the Internet
• Wearables can access, process, and
manage information using a
cloud-based remote platform
• Increases interoperability and integration of
devices, with improved energy efficiency
• Multitasking and faster processing of data
from medical devices, imaging, patient
records, lab reports, etc.
Enabling Infrastructure Frost & Sullivan
31
Wearables in healthcare are shifting from technologies that report real-time data to those
that diagnose and support clinical decision making
Use Cases
Example of
Products/
Devices
Sense
(Non-Acuity Monitoring)
Track
(Health & Fitness Monitoring)
Diagnose
(High Acuity Monitoring & Feedback)
Treat
(Clinical Monitoring & Feedback)
2004
2008
2014 2016
2020
Demand for health and wellness wearables is driving the overlap between clinical and consumer segments.
Evo
lvin
g
He
alt
hc
are
Ap
pli
ca
tio
ns
Consumer &
Infotainment
Wearables
Fitness & Wellness
Wearables
Healthcare
Wearables for
Personal Use
(Unregulated)
Wearables for
Clinical Use (Medical
Grade )
• Smart Watch
• Smart Glasses
• Heads-up Displays
• Bluetooth Headsets
• Imaging Products
• Activity Monitor
• Emotional
Measurement
• Fitness Tracker
• Sleep Monitors
• Heat Rate Monitor
• Skincare Sensors
• OTC (Over-the-
Counter) Blood
Pressure Cuff
• OTC Pulse Oximeter
• OTC ECG/Heart Rate
Monitor
• OTC Glucometer
• Glucometers
• ECG
• Pulse Oximeter
• Drug Delivery
• Blood Pressure Cuff
• Sensor Patch
Healthcare & Medical Consumer, Infotainment & Fitness
Segment
Overlaps
Technology
Health & Wellness
Frost & Sullivan
32
Most solutions that are being developed focus on assisting patients with specialized
medical needs and therefore offer a point of differentiation
Band
Ste
ps/
Movem
ent
He
art
Ra
te
Sle
ep
Te
mp
era
ture
Re
sp
ira
tio
n
Blo
od
Pre
ssu
re
Glu
co
se
Po
stu
re/ F
all
De
tecto
rs
Hydra
tion
Oxyg
en
Le
ve
l
Atr
ial
Fib
rilla
tio
n
Mu
scle
Pre
ssu
re/
Pa
in
Infa
nt
Mo
nito
rin
g
Bra
in H
ea
lth
Pre
gn
an
cy
Mo
nito
r
Wom
en’s
He
alth
Band
Band
Growing Long Tail of Niche Wearables to Address Specific Health Needs
• Wearable devices that promise accurate, fast, real-time health data to users are likely to
experience growth and sustainability.
• Consumer adoption and demand is expected to shift from general wearables to health-and-
wellness-centric ones that continuously track body vitals, help in remote monitoring to
enable self chronic disease management and in improving an individual’s overall wellbeing.
Commodity Zone
Medtronic
Medtronic
Key Players & Forecast Market participants, Frost & Sullivan
33
There is a long history of wearables that have failed but manufacturers are learning from
past mistakes and focussing on five key success factors
Platform
Flexibility
Clean
User
Interface
Targeted
Impact
Identify the
Right
Segment
More than a land grab for customers,
it is critical for market participants to
identify and establish partnerships
with the right stakeholders.
Entrants witnessing the highest rates of
adoption targeted applications where
ROI was easy to recognize, measure,
and translate into savings.
Many available solutions suffer from over-
engineering. An overwhelming number of
features, and advanced functionalities lead
to user confusion and can delay or restrict
usage.
As new entrants continue to enter the
marketplace, solutions with the ability to adapt
to various use cases and function as a
platform or plug-and-play mitigate risk.
Under-
served
Population
A number of underserved customer segments are in
need of solutions, but very few services are
designed to meet their needs.
Key Players & Forecast Frost & Sullivan
34
On the consumer side, increasing adoption amongst millennials will shift the value
proposition from complex products to simple consumer-centric information services,
empowering individuals for self-health management
Female
Overall
(n=1,500)
Currently Use Consider Using in Future Would Not Use
18–35 36–55 55+
Overall, 16% of the
consumers report using
wearable sensors to
track health, with the
highest use (28%)
among consumers aged
18–35.
Interest in using
wearable sensors in
future is strong among
both men and women.
The younger age
groups report the
highest use and future
interest in wearable
sensors. 13%
50%
37%
16%
48%
36%
28% 15%
6%
54%
50%
36%
18% 35%
58%
19%
Male
45%
36%
Customer Analysis
Wearables Market: Consumer Adoption by Age and Gender, US, 2015
Frost & Sullivan
35
On the medical/clinical grade side, widespread uptake will require the proactive
participation of providers, patients and payers
• Real-time capturing and analysis of patient data for informed patient diagnosis and treatment
• Enabling multitasking by hands-free interactions and information exchange in hospitals and operation rooms to boost care provider efficiency
• Anytime-anywhere training assistance and access to audiovisual reference material for medical professionals
• Wearables enable easy access and collation of accurate patient data and help translate them into meaningful trends and significant treatment benefits
• Continuous monitoring of data will empower patients in the early diagnosis of disease, personalized treatment, and quick recovery
• Enables RPM and homecare concepts to aid post-discharge patient/elderly care and those suffering from chronic illnesses
• Convenient and effective vital sign monitoring such as sugar levels, blood pressure, temperature, and heart rate keep the patient more informed to take precautionary measures.
• Wearables enable individuals to leverage data-driven informed decision making to control their activities for a healthy future
• Help the payer community leverage the data and trends generated from wearables to more accurately
define the risk profiles of members and arrive at an optimum plan cost
• Wearables encourage members adopt a healthy lifestyle and help in effective treatment outcomes to
reduce overall hospital visits—which help payers reduce their claims and overall cost
• Enable payers to implement incentive-based plans, where members with a healthy lifestyle can be
incentivized with low premiums, and higher charges for members with unhealthy habits or higher
susceptibility to diseases (e.g., VitalityHealth)
Providers
Payers
Patients
Customer Analysis Frost & Sullivan
36
3. The uptake of Point of Care (POC) tests
37
POC Testing is defined as medical diagnostic testing at or near the point of care and can
be segmented according to disease and/or indication
18.3%
3.4%
8.5%
16.2%
24.7%
9.9%
5.3%
3.1%
3.0%
3.8% 1.9% 2.1% 2020
19.3%
3.6%
9.1%
14.8% 22.0%
10.6%
5.5%
3.9% 3.4%
3.4%
2.0% 2.3%
Blood Glucose
Blood Gas and Electrolytes
Infectious Diseases
Hematology
Urinalysis
Foecal Occult
2016
Infectious Disease: Technology innovation in
molecular diagnostics is a major driver within the
infectious disease POCT for HAIs and STDs. In EU,
some of the trending infectious diseases are HIV-1,
HCV, c.difficle, Chlamydia, H. Pylori, Strep A/B,
Influenza A/B, RSV, Ebola and Zika.
Cardiac Disease: Highly sensitive cardiac troponins
that are the efficacy equivalent to centralised lab
testing will increase the adoption of POC cardiac
markers in POC settings. CK-MB, myoglobin, BNP,
NT-proBNP and D-dimers are simultaneously being
used in emergency settings. Inevitable
pharamcoeconomic benefits in POC cardiac testing
propels this segment to achieve its highest growth
potential.
Infectious Diseases = 24.7%
CAGR = 9.0% (2016–2020) Cardiac Disease = 16.2%
CAGR = 8.3% (2016–2020)
Hb1Ac
Cardiac Biomarkers
Rapid Coagulation
Pregnancy
Cholesterol
Drugs of Abuse
POCT Market: Market Segmentation, Europe, 2016 and 2020
Frost & Sullivan All figures are rounded. Base year = 2015 Definition/Segmentation
38
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
4,000.0
3,500.0
3,000.0
2,500.0
2,000.0
1,500.0
1,000.0
500.0
4,500.0
0.0 2013 2014 2015 2016 2017 2018 2019 2020
Revenue 2,609.1 2,747.9 2,900.8 3,057.2 3,228.4 3,416.9 3,624.7 3,853.4
Growth Rate - 5.3 5.6 5.4 5.6 5.8 6.1 6.3
Gro
wth
Rate
(%
)
Reven
ue (
$ M
illio
n)
• The growth of POCT in Europe is driven by lifestyle changes in the young population and a burgeoning
ageing population, leading to increased adoption of cardiac markers and a spurt in infectious diseases
that drive the high testing volumes.
• The increase in demand for POCT especially in the growing Emergency Department (ED) set up is due
to its ability to deliver fast results with low turnaround times that in turn reduces healthcare expenditure.
POCT has been well-supported in Western Europe despite reimbursement issues for certain types of
tests.
In Europe, the POCT market was valued at $2.9 billion in 2015 and will expand to reach
$3.9 billion by 2020, a 5.8% CAGR
Market Analysis & Forecast
POCT Market: Revenue Forecast, Europe, 2015–2020
All figures are rounded. Base year = 2015 Frost & Sullivan
39
Drivers Short Mid Long
Promising applications in molecular diagnostics, antimicrobial resistance H H M
Increased use in personalized medicine and companion diagnostics M M H
Increased capacity in data connectivity, application to telemedicine M M H
Miniaturisation of laboratory devices and microfluidics technology M M M
Growth is bring driven by promising applications in molecular diagnostics and
antimicrobial resistance in particular and increased capacity in data connectivity which
is bringing POCT into the telehealth and care domain
Market Trends
POC Tests Market : Key Market Drivers and Restraints, Europe, 2015–2020
Restraints Short Mid Long
Test quality issues and increasing complaints; the need to prove consistency and
effectiveness H M M
Inconsistent reimbursement laws across the European region H M L
Transition from fee-for-service to payment for outcomes L M H
Frost & Sullivan
40
In EU, the payment for POCT tests is by payer segments which include private insurance companies,
employers, hospitals, or patients themselves. There has been a growing importance in terms of privately
insured patients in Germany and the United Kingdom. In Western Europe, 10 % of privately insured
patients accounted for 15 % of the test volume. The reimbursement norms across countries and customer
segments is illustrated here.
Region Independent Labs Hospital Labs POL
UK 1. Payment by insurance
2. Directly by patient
DRG-based annual budget
through commissioning
Cost per test basis
(regulated)
France
Directly by patient
(reimbursed by patient‘s insurance
company)
Annual budget
Not regulated
Regulated prices per test
(exemptions for few tests exist)
Benelux
1. Reimbursement per test, if
ordered by GP
2. if not, patients pay themselves
Reimbursement per test
Reimbursement per test
(regulated)
Scandinavia Reimbursed by the
government
Fixed basic budget
plus price per test
Cost per test basis
(regulated)
In Europe, POCT devices are regulated under the 1998 European Directive 98/79/EC on in vitro diagnostic
medical devices. The latest amended directive was in 2011 (2011/100/EU). Recently, an international
standard (ISO 22870:2006) giving specific requirements applicable to POCT was introduced, and this is
intended to be used in conjunction with ISO 15189, which describes the general requirements for the
competence and quality of medical laboratories. Patient self-testing in a home or community setting is not
covered by these ISO standards.
Nonetheless, inconsistent reimbursement laws across the European region act as a
restraint on widespread adoption
Incentives & Regulations Frost & Sullivan
41
Point-of-care
Testing
Multiplexed Lateral Flow Immunoassay This is a traditional method in which the sample flows through a solid substrate through capillary action, functionalized with a color-coded output to detect test outcome (e.g., HIV Test).
Breath Analyser This device has the ability To identify and quantify volatile organic compounds in alveolar breath at picomolar concentrations; applications include tuberculosis, lung cancer.
Integrated Cartridges
Cartridges are customised for a wide range of test menu utilising thin-film sensor in combination with microfluidics and analytes depending on the application in context (e.g., iSTat from Abbott).
Magnotech Biosensor
Cartridge-based system that is based on magnetic technology with functional nanoparticles, enabling high sensitivity detection at picomolar range.
Market participants are pushing a broad range of new technological advancements with
magnotech and BioMEMS finding wider applications
Portable MDx This is a portable battery-operated miniaturised platform for performing complex molecular biology analysis such as PCR. Applications predominantly in infectious disease that eliminates long incubation times involved in conventional microbiology lab testing (e.g., Coabas LIAT).
BioMEMS
BioMEMS and biochips are built from silicon, plastics, or polymer by using micro and nanofabrication technologies; they are highly multifunctional. Applications include Circulating Tumour Cells (CTC), Cancer biomarkers, and DNA/mRNA identification.
Technology Frost & Sullivan
42
• Have real-time, dynamic patient
verification at the device level
• Provide integration into data
management systems
• Offer automatic validation routines
checking and flagging suspicious
results
• Provide cconnectivity to automate
QA data collection and clinical
documentation
• Automate data analysis and report
generation/distribution
• Facilitate communication by
sending messages to certain
units or users through the POCT
device
iPOCT solutions
Moving forward, POCT informatics (or iPOCT) is expected to emerge as the next
technology-based and need-driven evolution, bringing a range of benefits to patients,
hospitals, physicians and payers
nd 2 Gen POCT 1st Gen POCT
Data collection Data Management
Information Integration
and Analytics
Tests visually read then
evolved to using a laptop
computer at test sites to
download data; usually not
interfaced to LIS or HIS.
3rd Gen POCT
Output-based patient
care
POC testing nursing
influence
Outcome-based patient
care
Regulatory and
connectivity focus
Hand-held devices and
centralized server
connected by Ethernet to
docking stations on patient
care units; interfaced to LIS
and HIS
Multivendor wireless
connectivity using a single
DMS with bidirectional
communication to wireless-
enabled POCT devices.
Open IT; Wireless
Web; EMR
Hospital
Reduce readmission,
patient process time and
test duplication
Payer Physician
Access comprehensive
patient data and history
for improved decision
making and diagnosis
Reduce treatment cost,
hospital length of say,
and overall process
efficiency
Technology/Enabling Infrastructure
Patients
Frost & Sullivan
43
From a competitive point of view, the POCT market is highly concentrated with five
players taking a combined 80% share
Number of Companies in the Market More than 20
Competitive Factors
Large and global installed base with major presence in EU; some EU
based; diversified, comprehensive products and services; products in
high-growth segments; strong brand recognition in key EU markets
(UK, Germany, France)
Key End-user Groups Clinical laboratories, hospital laboratories, critical care, satellite sites,
physician offices, self-testing
Major Market Participants and their share in
revenues terms in 2015
Roche Diagnostics (20.3%), Abbott Diagnostics (12.9%), J&J (12.3%),
Danaher (23.0%), Panasonic (11.2%)
Market Share of Top 8 Competitors 79.7%
Other Notable Market Participants Mernarini, Thermo Fisher, bioMerieux, Sysmex, Becton Dickinson, Bio-
Rad
Notable Acquisitions and Mergers Abbott‘s acquisition of Alere to consolidate leading position
Key Players & Forecast
POCT Market: Competitive Structure, Europe, 2015
Frost & Sullivan
44
Primary Care
(POL & Retail)
Total POCT Market
Hospital Emergency Department Home care*
Hospital emergency departments are currently the largest users of POC tests, followed
by independent reference laboratories and primary care
Independent Labs
Driver for POCT Usage Setting Example
• Diagnosis
• Rule in or rule out disease
• Rule in or rule out diagnosis
• Primary care
• Emergency
department
• Bacterial infection
(Urinalysis)
Troponin
• Treatment guide/monitor
• Decide on drug dosage
• Assess efficacy
• Monitoring compliance
• Primary care
• Operating room
• Primary care/home
• Blood glucose
• Parathyroid hormone
• Hb1Ac
• Patient-related factors
• Convenience
• Disease management
• Home • Pregnancy screening
• Diabetes care
• Physician-related factors
• Therapeutic decision
• Avoid adverse events
• Primary care/hospital
• Primary care
• MDx (cancer therapy)
• Drug screening test
• Policy/organisation factors
• Reduce hospital time
• Manage long term chronic
diseases
• Primary care
• Cardiac troponins
(length of ED
stay)
* The home care segment is highly fragmented and majorly over the counter. It is also called non-professional testing and has not been considered for segmentation
Total POCT Market: Percent Sales
Breakdown, Western Europe, 2015
Physicial Office
Laboratory 3.7%
Independent Reference Laboratory
32.4%
Hospital
Emergency
63.9%
Customer Analysis Sources: Price CP, St John, Point-of-care Testing: Making Innovation Work for Patient-Centered Care Frost & Sullivan
45
2.0%
4.0%
6.0%
8.0%
10.0%
600
Cardiac
Testing
Blood
Glucose
Rapid
Coagulation
Blood gas and
electrolytes
Haematology Hb1Ac
Fecal
occult
Urinalysis
Pregnancy Drugs of
Abuse
Cholesterol
200 300 400 500
Estimated Market Size ($ Million)
CA
GR
Gro
wth
(2
01
5–2020)
POCT Market: Revenue and CAGR by Segment, Europe, 2015
Infectious
disease
Cardiac biomarkers and infectious diseases are major segments for POCT adoption
given the need for faster diagnosis is the norm here
0.0%
-100 0 100
Customer Analysis
700 800
12.0%
Frost & Sullivan
46
Italy snapshot
47
800.0 6.0
700.0
5.5
600.0
5.0
500.0
400.0 4.5
300.0
4.0
200.0
3.5
100.0
In Italy, the POCT market was valued at $555.7 million in 2015 and will expand to reach
$719.1 million by 2020, a 5.3% CAGR
POCT Market: Revenue Forecast, Italy, 2015-2020
All figures are rounded. Base year = 2015
3.0 0.0
Revenue
2013
502.6
2014
528.1
2015
555.7
2016
583.7
2017
613.5
2018
646.0
2019
681.0
2020
719.1
Growth Rate - 5.1 5.2 5.0
Gro
wth
Ra
te (
%)
Re
ve
nu
e (
$ M
illio
n)
Frost & Sullivan
48
• The Italian POCT market was valued at $555.7 million in 2015 and is expected to reach $719.1million
in 2019, expanding at a CAGR of 5.3 per cent between 2015 and 2020.
• Steady growth is expected throughout the forecast period, with a large network of small and large
hospitals and clinical laboratories.
• The SSN, Italy‘s national health plan, is tax funded and universal, and provides healthcare at minimal
or no cost to Italian citizens. Inpatients are reimbursed through DRG and outpatients are reimbursed
through a positive list of services.
• The implementation of co-payment on laboratory diagnosis for patients, for a specified time, is likely to
have a negative impact on the number of POCT tests in the short term. The Essential Level of
Assistance (ELA) is a formulary that had enforced a cut in the IVD prices in 2013 by 35% causing a
severe impact in the private segment within the NHS rule, with many small laboratories defaulting, and
accelerating consolidation of the labs.
• Late payment is a major problem in Italy. The reimbursement time is on an average between 500 and
800 days for a product after delivery. For products not in the reimbursement list, purchases will be
made through regional budgets. Manufacturers will face a series of problems when they sell their
products across Italy if their device/equipment is not included in the national tariff.
Steady growth is expected throughout the forecast period, with the benefits of a
comprehensive reimbursement system offset, to some extent, by the introduction of a
programme of co-payment for laboratory diagnoses
Frost & Sullivan
49
4. Orthopedic Implants
50
The market for orthopedic implants can be segmented into four major areas of which
joint reconstruction is the largest, with a 55% share in revenue terms, followed by spine
(22%), trauma (17%) and orthobiologics (16%)
Blood- and
Marrow-based Products
Joint
Reconstruction
Orthopedic Implant Market: Market Segmentation, Global, 2013
Orthopedic Implant Market
Trauma Orthobiologics
Hip Replacement
Extremity
Replacement
External Fixation
Internal Fixation Fusion
Non-fusion
Hemostasis
Growth Factors
Knee Replacement
Spine
Synthetic Bone
Graft Substitutes
Allograft, DBM,
and BMP
Growth Factors
Viscosupplements
DBM = demineralized bone matrix and BMP = bone morphogenetic proteins Definition/Segmentation
Frost & Sullivan
51
Globally, the orthopedic implants market was valued at $34 billion in 2013 and will
expand to reach $45 billion by 2020, a 3.3% CAGR
0.0
2.0
4.0
6.0
8.0
10.0
0.00
10.00
20.00
30.00
40.00
50.00
Revenue
2011
32.58
2012
33.14
2013
34.00
2014
34.95
2015
35.99
2016
37.14
2017
38.41
2018
39.85
2019
41.47
2020
43.31
2021
45.36
Growth Rate 2.4 1.7 2.6 2.8 3.0 3.2 3.4 3.7 4.1 4.4 4.8
Gro
wth
Ra
te (
%)
Re
ve
nu
e (
$ B
illi
on
)
Year
All figures are rounded. Base year = 2013
Orthopedic Implants Market: Revenue Forecast, Global, 2011–2021
Frost & Sullivan
52
Drivers Short Mid Long
Emerging Markets Account for More than 40% of the World’s Population and have
Growth Rates that are 3–4 Times Faster than Developed Markets H H H
Advancements in MIS Allow for Increased Safety as Patient Trauma and
Time Spent in the Operating Room are Reduced M H H
Expanding Research on Orthobiologics and Biomaterials will Provide High-quality
Outcomes and a Reduction in Revision Surgeries M H H
Customizable Implants and Surgeries will Expand Market Solutions and Patient Population M H M
Emerging markets are key to driving growth in the sector overall …
Market Trends
Orthopedic Implant Market: Key Market Drivers and Restraints, Global, 2014–2021
Restraints Short Mid Long
Navigating Multiple Regulations Across Global Markets is Challenging, Especially
in Terms of Managing Various Products H H H
Orthopedic Implant Material Costs can be Dictated by Other Industries H H H
Lack of Evidence-based Studies for Novel Technology Restrains Usage in the Short Term H H M
A Macroeconomic Environment Significantly Affects Procedural Volumes H M M
Frost & Sullivan
53
Company Revenue(%)
J&J 23.0
Stryker 14.5
Zimmer 12.7
Biomet 8.5
Smith & Nephew 6.7
Others 34.6
Total Market
Revenue
$34.0 B
The top 5 market participants contributed 65.4% of the
total revenue. J&J, which includes Synthes and Depuy,
led the competition in 2013, with $7.5 billion in revenue.
J&J’s management is centralizing orthopedic operations
and planning to launch 30 new medical devices in 2016.
Since the acquisition of Synthes’ trauma products portfolio
in 2011, J&J has successfully maintained its position as
global market leader.
Stryker broadened its product portfolio with the acquisition
of MAKO in 2013. Stryker is one of the few companies
with the ability to own a majority of both the capital and
the consumable equipment in the operating room. It is
able to leverage recent acquisitions to accommodate
market demand and solidify itself as a market leader.
Following Stryker in market rankings are Zimmer, Biomet,
Smith & Nephew, and Medtronic.
Most orthopedic implant companies, especially top-tier
participants, have experienced a decline in once-profitable
sub-segments, such as hip and knee implants. However,
opportunities to expand market presence with those
procedures still remains in emerging markets.
Orthopedic Implant Market:
Company Market Share Analysis of Top 5
Competitors, Global, 2013
… whilst mergers & acquisitions and other partnerships are supporting the success of
individual participants looking to grow their share
Frost & Sullivan All figures are rounded. Base year = 2013
J&J = Johnson & Johnson Others include Aaap Implante, B Braun, Ceraver, Corin Group, Endotec, Exatech, Implants International, Integra Life Sciences, DJO Lima, Medtronic, NuVasive, Orthofix, Tecres Medical, Tronier, Wright Medical Technologies
Key Players & Forecast
54
Medtronic, Mazor and RTI are emerging players with strong exposure to the attractive
spine segment as well new robotics applications
Medtronic, Inc.
• The company has strong brand recognition and is a leader in spine and orthobiologics products.
• As a percent of total net sales from 2011 to 2013, spinal products decreased by 3% as procedural volumes decreased.
• As a percent of total net sales from 2011 to 2013, neuromodulation products increased by 1% as physicians looked for alternative treatment.
• Key products include artificial cervical discs, balloon kyphoplasty (MIS for vertebral compression fractures), biologic fusion systems, interspinous spacer implants, and other MIS implants and tools.
Mazor Robotics Ltd.
• Based in Israel, the company
specializes in robotic spine
surgeries and has assisted in
the placement of more than
45,000 implants worldwide.
• In 2013, revenue was 61%
higher than the previous year,
at $19.8 M.
• A renaissance surgery system
may reduce radiation exposure
for patients and physicians.
• Innovative products in the
pipeline include minimally
invasive spinal stabilization
procedures, intraoperative
3D-imaging systems, and a
Renaissance Guidance
System brain module.
RTI Surgical, Inc.
• It is a global company
specializing in metal, biologic,
and synthetic implants.
• In 2012, it launched 18 new
implants/implant
enhancements, accounting for
$2 M of the $178.1 M annual
revenue.
• Distribution is offered in 50
countries, with 4 manufacturing
facilities in the United States
and Europe.
• In July 2013, it acquired
Pioneer Surgical Technology,
Inc. to expand its global
implant portfolio in metals and
synthetics.
Key Players & Forecast Frost & Sullivan
55
Behind the joint reconstruction segment, trauma segment is one of the fastest growing,
with room for technology development and adoption
Spine
Orthobiologics
Maturity Development Growth
Trauma
Decline Time
Se
gm
en
t Va
lue
Joint Reconstruction
As technology advances, the
orthobiologics segment will
continue to grow; however,
high cost and a lack of
empirical data are restraining
widespread usage.
As implants and procedures
improve, the spine segment will
continue to grow. The increasing
spinal deformities being observed
among the active and aging
population acts as a market driver.
The joint reconstruction
segment is mature, with no
innovation and a dependence
on the United States. However,
with the aging population and
the expansion into emerging
markets, growth will remain
constant.
The trauma segment is one of the
fastest growing, with room for
technology development and adoption.
The total orthopedic implant
market is expected to
witness growth during the
forecasted period.
Total market
Orthopedic Implant Market: Segment Lifecycle Analysis, Global, 2013
Customer Analysis Bubble size represents market size Frost & Sullivan
56
More broadly, the use of novel manufacturing materials and techniques for developing
medical devices is growing
Technology
3D Printing
Composites Manufacturing
Micromanufacturing
Multi-Material Joining
01
03
02
04
3D printing is an emerging manufacturing technology that has been changing the conventional
manufacturing paradigms in various industries. In medical device manufacturing, 3D printing
has significant potential to become a popular manufacturing method for producing medical
device and implants
Composites is the wonder material of material science. Composites combine physical and
chemical properties of several materials and become one material with the desired properties
for application in medical devices. Manufacturing composites is a key technology to power
medical devices for the future market
Micro manufacturing encompasses technologies for micro machining, micro carving and micro
subassembly of medical device components Micro manufacturing is gaining prominence in
medical device manufacturing in order to keep up with the miniaturization and
personalization trends
The medical device industry is constantly innovating, using varied materials to deliver high-
quality healthcare to consumers. As new composites and materials increasingly make their
way into devices, joining these materials in order for them to work in tandem and deliver
precise outputs becomes necessary. Frost & Sullivan
57
3D printing is particularly suited to orthopedics as it offers suppliers the opportunity to
personalise and customise solutions
Technology
Technology Overview Readiness Level
Application Overview
3D printing is an emerging revolutionary technology that originated in the Massachusetts
Institute of Technology, USA. In recent years, 3D printing is revolutionizing many industrial
production environments with its immense capabilities. In the healthcare industry, 3D Printing
has immense potential in medical devices and tools manufacturing
In Medical device manufacturing, 3D printing has been demonstrated to have a strong
potential in rapid protyping of medical devices. This can be attributed to the nature of
healthcare industry which is dependent on prototypes to conduct clinical trials and gain
approvals before moving into commercial manufacturing of medical devices.
Apart from prototyping, many research studies from academia and industry have
demonstrated the use of 3D printing in medical uses such as printing implants and other such
devices. 3D printing technologies such as stereolithography, Electron Beam Melting (EBM),
and laser sintering are popular choices for printing medical devices and implants.
Many start-up companies and university spin-offs are already offering 3D printing services for
producing implants and prosthesis. The success of these entities are based on the fact that
3D printing offers a great degree of personalization and customization to suit the needs of
patients. Orthopedic implants and prosthesis benefits immensely from these factors
3D printing has been adopted on an
industrial scale in various industries.
In medical device manufacturing. 3D
printing is now being adopted at a
faster rate for rapid prototyping.
• Medical Device Prototyping
• Low risk devices
• Orthopedic implants
• Surgical and other medical tools
Frost & Sullivan
58
Arcam is a leading additive manufacturing technology provider that uses Electron Beam
Melting to develop implants
Arcam AB, Frost & Sullivan Technology/Key Players & Forecast
Description
• Arcam has established strategic partnership with a number of companies in order to
fuel its innovation in Electron Beam Melting (EBM) and other additive manufacturing
technologies in the aerospace and medical implants industries.
• EBM is the core of additive manufacturing solution developed by Arcam. Its solution for
additive manufacturing creates a manufacturing environment that can easily produce
standard and custom implants at a high speed and precision.
Arcam AB is a Swedish 3D printing
and additive manufacturing
technology provider that uses
Electron Beam Melting process to
create orthopedic implants.
Technology
• Arcam‟s EBM technology is an optimized EBM process that offers cost-efficiency and flexibility to manufacture standard
orthopedic implants such as press-fit and cemented implants. This technology is specifically beneficial during volume
production, where it yields huge cost benefits.
• Another striking feature of Arcanm‟s EBM technology is its ability to print implants with advanced Trabecular Structures (the
microscopic tissue elements in bones and other organs which provide mechanical functions) in a single process. This will
lower the production time of implants.
• Arcam‟s EBM technology uses a faster interface between CAD designs and the printer, which enables a faster and precise
printing of custom implants for patients.
Orthopedic Implant Market: Selected 3D Printing Market Participant
Selected player
59
Appendices
60
Principal abbreviations
AAL Ambient Assisted Living
AAL JP Ambient Assisted Living Joint Programme
B Billion
B2B Business To Business
B2C Business To Consumer
BMP Bone morphogenetic proteins
CAGR Compound Average Growth Rate
CTC Circulating Tumour Cells
DBM Demineralized Bone Matrix
EC European Community
ED Emergency Department
EU European Union
ELA Essential Level of Assistance
F Forecast
FDA Food & Drug Administration
FP7 7th Framework Programme
GP General Practitioner
HC Healthcare
HIS Hospital Information Systems
HIT Healthcare Information Technology
HIV Human Immunodeficiency Virus
IP Intellectual Property
ISEE Indicator of Equivalent Economic Status
IT Information Technology
LIS Laboratory Information Systems
M Million
PCR Polymerase Chain Reaction
POC Point Of Care
POCT Point Of Care Testing
POL Physical Office Laboratory
RFP Request For Proposal
ROI Return On Investment
RPM Remote Patient Monitoring
SaaS Software-As-A-Service
SSN Servicio Sanitario Nationale
UK United Kingdom
US United States
VAR Value Added Reseller
61
Frost & Sullivan
www.frost.com
July 2016
Study carried out exclusively for
Intesa Sanpaolo Innovation Center
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