Industry Confirms Kalorama Assessment on Digital X-Ray

We like to think we catch the trends that are useful to our readers, and so it is with a bit of pride that we see our assessments of trends confirmed by the industry. As DOTMed News reports, Kalorama's estimate by analyst Joe Constance that for the first time digital systems outsold conventional x-ray has been confirmed by several industry sources.

The DotMed story confirms that Kalorama got the sense of the industry right, as sales managers feel customers are focused on digital. The selling points: better quality pictures and saving room in the hospital used up by archives.

“DR is definitely outselling CR,” says Greg Cefalo, U.S. imaging business unit manager for Agfa HealthCare. “The DR market is probably at least a $500 million industry, while CR is worth $350 million.”

and

“DR is now the technology of choice compared to five years ago,” says Rob Fabrizio, senior marketing and product development manager of Fujifilm Medical Systems U.S.A. Inc.

CR is not dead however, as the article notes - the systems are still cheaper and will still be a significant and profitable minority of this market for years to come.

Kalorama's report on this topic. Medical Imaging Markets: X-Ray, Digital X-Ray, CT Mammography and Other Radiography includes much more detail and sales by regional and product segments. Along with our other complete studies of the healthcare market it is available at www.kaloramainformation.com

'Insourcing' Already Standard Practice in the Medical Device Industry

Last Wednesday, President Obama urged manufacturers back to U.S., saying that companies should engage in 'insourcing' rather than 'outsourcing.' At a Master Lock plant in Milwaukee (the company brought 100 jobs back to the US from overseas), the President urged business leaders in an appeal to patriotism to bring jobs back to our shores.

"Ask what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,"

One industry that got the message long ago is the medical device industry. The industry requires precise specifications and reliable materials and strict quality controls (with high stakes PR consequences for failure) argue for less distance between branded manufacturer and contract manufacturer. Although low-level (Class I) devices are often made abroad, and parts of key devices are, the device industry has a lower outsourcing rate in general than most industries and where outsourcing occurs, it is very often American outsourcing and not "offshoring."

As reported in Kalorama Information's Contract Manufacturing in Medical Devices; The World Market The US is still the largest market for the manufacturing of medical devices, more than half of the market is within the United States. Although Europe and emerging nations will reduce this in the next few years, we still anticipate that the same will be true in 2015.

EMR Driving Sales of Handhelds

The best way to have a busy and fairly mobile healthcare provider comply with EMR meaningful use requirements is to get her a handheld device for data entry. It's not occurring in every hospital, but it is notable trend in the most wired hospitals. As reported in CMIO (citing Kalorama Information's conclusions), the fastest growth in handhelds in healthcare has been in the administrative side, the type of handhelds used to perform data entry and look at patient records during visits. Though there are a number of factors, we think data entry for EMR is a significant one.

The handheld device market’s more than 10 percent growth since 2007 to $11 billion in 2011.

Kalorama Information's report on this topic can be obtained at our website. t The report includes revenue breakouts by type of device and applications.

FDA Moves Quickly On Illegal Handheld X-Rays

The spread of handheld devices in healthcare is not without its hiccups, as evidenced by the recent crackdown by the FDA on online sales of handheld X-ray units which do not comply with regulations. The units, shipped from outside the United States to U.S. dentists and vets, were not compliant with effectiveness standards of the FDA and may expose a patient to more radiation than the FDA permits (no patient was harmed according to the agency). X-ray units cleared by the FDA bear a permanent certification label/tag, a warning label, and an identification (ID) label/tag on the unit. This was not present in the questioned devices, which were noticed by the Washington State Department of Health and brought to the attention of the FDA.

"Health care professionals using these devices should verify they are purchasing and using those that have been reviewed and tested to meet FDA's standards," said Steve Silverman, director of the Office of Compliance in the FDA's Center for Devices and Radiological Health.

There are several handheld x-ray systems that do comply with FDA regulations; one is the Aribex NOMAD

The spread of handheld devices will create different regulatory responses which Kalorama Information has monitored. Last year the agency hinted it would regulate new handheld apps as very low-level (Class I) designation. That kind of flexibility would be needed for the market for medical handheld and corresponding apps to grow. However, when the device can do harm or influence a diagnosis, the agency is likely to be more aggressive. Kalorama Information has detailed the markets for handhelds and x-rays in two recent reports:

Handhelds in healthcare: http://www.kaloramainformation.com/Handhelds-Healthcare-Smartphones-6789230/

X-Ray Markets: http://www.kaloramainformation.com/Medical-Imaging-Ray-6404203/

Endoscopy Doesn't Have to Be Unsightly

Capsule Endoscopy can conjure up a negative image for patients; the leads and wires attached to their torso leading to a recording device that is worn on a belt or harness. This is needed in current systems due to the wireless technology used in transmitting the pictures captured by the capsule endoscope through radio-frequency signals.

Some products are looking to get the process down to no more than taking a pill. One such product, available for sale in the UK, France, Germany, and India, is Capsovision's Capsocam SV-1. The unit features a tiny, 360 degree camera available for sale in Europe and India through medical distributors. Pictures are downloaded, rather than transmitted by radio.

"The patient doesn't need to look like a bomber with a datarecorder and sensor attached to them anymore," says Tim O'Dwyer, Capsule Endoscopy Specialist for hte Saratoga, CA-based company. He recently spoke with Kalorama Information.

According to O'Dwyer, the new capsule Capsocam SV-1 has four cameras and 15hours of
battery operating time minimum and can take more pictures than the average unit.

"That's over half a million photographs compared to less than 80,000 taken by the market leader," O'Dwyer said.

Another system by Sayaka Corp uses an inner lens that constantly rotates so that a 3D image of the canal is taken. Sayaka's Capsule has a lens on the lateral surface of the capsule instead of the front. This new design obtains clear-cut lateral images of the gastrointestinal wall while the inner capsule spins in the digestive tract. The unit is battery free.

Capsule Endoscopy is one of the faster growing market segments in GI and more competitors are expected. We've completed a whole market research study on this promising area. Kalorama Information's latest report can be found on our website:Gastrointestinal Devices market research report.

Cancer Biotherapy Revenues Settle Down, But Still Strong

In the last decade, one of the most promising new approaches in modern cancer treatment is immunotherapy or biotherapy, the development of methods to augment and enhance the body’s natural tendency to defend itself against malignant tumors without damaging healthy tissue. Therapies such as monoclonals or interleukins were growing at over 25% between 2005 and 2010.

That type of revenue growth could not have been sustained forever. As these products become an increasingly common part of treatment, we note that growth rates - while still very high - have slowed from previous levels. Kalorama notes in Cancer Therapeutics , our latest study, that biotherapies grew at 10% between 2010 and 2011. That new revenue growth rate though should hold long-term, at least the next five years, and still makes for a very comfortable atmosphere for new product introductions.

Cancer is the second most common cause of death in the industrialized world. Most cancer patients are treated with some combination of surgery, radiation, and chemotherapy. Unfortunately, radiation and chemotherapy destroy healthy as well as malignant cells and thus can cause severe side effects.

The rising incidence of cancer, particularly in the over 50 population, is likely have a significant impact on all areas of cancer treatment. However, for many cancer types, there remains a significant unmet need in effective treatment. Lung cancer is one example as patient survival is less than five years after diagnosis. Traditional therapies have failed to provide adequate treatment for these patients, signifying a need for an alternative treatment plan. Compassionate use has been granted for several therapies in the past and this trend is likely to continue.

Canada Moves Highlights Interest in Personalized Medicine

A challenge to anyone promoting a therapeutic or a medical device in healthcare markets currently is that no matter how good it is, even if it is better than current regimens, payors both in the U.S. and Europe are seeking to cut costs, and that usually doesn't present a good market for innovative but more expensive solutions. This austerity is lead by governments, and is echoed by private payors.

Most major governments have undergone some type of cost-cutting program. In the U.S., while healthcare reform will likely expand the insured population, it also can be considered at least partially a 'cost-cutting' program that features payment decreases to providers and fees on devices.

It's possible that tests may be different, particularly those molecular tests that can improve patient outcomes and lessen the use of a therapeutic in a case where it has little probability of working. Canada's recent move to provide millions for personalized medicine products highlights how even in an austerity time, a product that can cut costs long-term has promise.

Kalorama has always discussed personalized medicine in its IVD reports, but we have recently completed our first full market research study on the concept. Personalized Medicine Diagnostics is available for pre-publication orders now and will publish on March 1st, 2012.