Heart valve market faces falling revenue despite increase in life saving surgery, says Frost & Sullivan

Frost & Sullivan year, around 80,000 heart valve repair procedures were carried out in Europe: 88 percent were using either mechanical or tissue replacement valves and the remaining 12 percent with annuloplasty rings. This figure is estimated to grow to almost 87,000 procedures throughout Europe in 2007, increasing the demand for these products.

However, new research from healthcare analysts Frost & Sullivan (medicaldevices.frost.com) shows the revenue generated by the sale of these life saving devices will decrease over the same period as a consequence of price erosion. Frost & Sullivan valued the European heart valve market at $162.6 million in 2000.

Research analyst Kate Lawrence explains the downward pricing trend: "Cost containment in the European healthcare system has put the pressure on hospitals' spending budgets. Since heart valve products are primarily purchased through public tenders, intensifying competition between manufacturers to win these tenders has resulted in a general fall in prices over the past years.

"Where tissue valves were previously more expensive than mechanical valves, there is now a negligible difference in price. The general decline in prices has been so significant in some countries that despite an increase in units sold, the outcome remains at negative revenue growth."

The study found the market was also being limited by a small increase in the number of patients with heart valve disease. Degenerative disease caused by calcification is the major cause of heart valve repair and replacement. As a result, growth in number of patients per year is mainly determined by population dynamics. The threshold implant age for valve replacement is now as low as 60 years in some European countries. Today, roughly 21 percent of the European population is aged 60 and over.

The annuloplasty rings market, introduced within the last decade, was the most interesting market of the three devices. "The popularity of repairing heart valves using annuloplasty rings is continuing to grow in favour of replacement surgery," Miss Lawrence continues.

"Many cardiologists are now opting to use an annuloplasty ring where possible, partly because it is a cheaper alternative to total valve replacement, but more importantly because it enables preservation of the existing valve structure, and is less traumatic to the patient for the management of their heart valve disease. As surgeons become more familiar and competent in the procedure, an increasing proportion of mitral valve defects are now repaired instead of being replaced."

The annuloplasty rings market was worth $8 million in 2000 and is forecast to reach $11.1 million in 2007. However, the success of this market has had a negative impact on the total market revenues. The impact is only short term as many of the patients who receive annuloplasty rings will eventually require their valve to be totally replaced.

The tissue valves market generated $58.9 million in 2000, an overall increase of just 0.9 percent since 1997, despite a 10 percent growth in unit shipments. This is the result of price erosion in this mature and saturated market. However, over the forecast period as prices begin to stabilise, high unit growth driven by the market shift towards using tissue valves, should help to bolster revenue generation.

The tissue valves sector is growing primarily at the expense of mechanical valves. Advances in heart valve technology have helped to boost unit sales, as improvements to tissue valve products has increased their durability and made them suitable for implantation in younger patients.

The mechanical valves market was valued at $95.3 million in 2000, a 10.1 percent reduction in revenue from $106 million in 1997. This significant decrease in the size of the market can be explained by the gradual shift towards using tissue valves, in place of mechanical valves. The study found this problem is compounded by two other key factors. Firstly, the fact that the market is highly saturated, and patients numbers are growing at a low rate of between 1 and 2 percent per annum. Secondly, this is a very competitive marketplace, which is causing price erosion and consequently declining revenues. Frost & Sullivan projects the mechanical heart valves market will continue to fall over the forecast period.

Germany is by far the largest market valued at $50 million in 2000, generated from more than 20,000 heart valve replacements and 2750 repairs. The French market is slightly smaller than the German market as demand is lower, and Italy is the third largest market.

Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of healthcare markets for trends, market measurements and strategies. This on-going research is utilised to complement a series of research publications to support industry participants with customised consulting needs. (Report Code: 3824, Publication Date: June 2001, Price: 4980 Euros).

For more information contact Nikki Cole at nikki.cole@fs-europe.com .

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