Digitization Initiatives, Price Erosion To Drive Consolidation In European Medical Imaging Market
London — Amidst challenges such as price erosion, reduced hospital beds, lack of radiologists and a trend towards multi-modality deals, novel picture archiving and communication systems (PACS) and digitisation initiatives are spurring growth in the European medical imaging market. As this scenario sets the stage for greater consolidation, uncertainty remains over whether traditionally strong participants will continue to dominate their smaller competitors.
"Consolidation in the medical imaging industry in Europe will be driven by a continued movement towards complete digitisation of the radiology department and workflow integration through PACS," explains Frost & Sullivan Research Analyst Karthik Arun B. "The need to reduce costs and, at the same time, maintain the high standards of quality expected from medical imaging equipment will further influence the trend towards consolidation."
Alliances and acquisitions by various industry participants over the past three years indicate a definite trend towards vertical integration. Most participants are looking to integrate or align themselves with independent PACS developers as well as sub-system producers. Based on the current scenario, this trend is set to continue for the next three to four years.
Given the prevalence of strict legislation and the presence of strong Tier 1 participants, however, consolidation is unlikely to be an easy task. Moreover, issues such as cultural integration, change management as well as certain reimbursement rules could hamper potential consolidation in the medical imaging industry in Europe.
"The increasing trends towards price reduction is minimising the bottom lines for companies," observes Mr. Karthik. "In addition, regulatory policies such as reimbursement rules that restrict the use of certain modalities in favour of others also have a strong impact on consolidation."
The challenge for market participants, therefore, will be to enter into mutually beneficial partnerships with other participants. Companies should look to acquire or form alliances with others that can help them broaden their product portfolio rather than increase their market share.
"By expanding their product portfolio, smaller companies can hope to actively compete with the larger multi-modality vendors," elaborates Mr. Karthik. "With the growing trend towards institutions offering large multi-modality tenders, vertical integration will also help to reduce costs and provide a more efficient deliverable."
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Company Profiles and Consolidation in the European Imaging Industry is part of the Medical Imaging Subscription, which also includes research in the following markets: European Markets for Key Medical Imaging Modalities and Emerging Geographic Markets for Medical Imaging Equipment in Europe. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
SOURCE: Frost & Sullivan