As the economies of three of the world’s largest emerging markets—Brazil, India and China—rapidly expand, it becomes imperative to observe the changes happening within each country to understand how they play an increasing role in the global marketplace. The medical device market is seeing increasingly drastic changes and participation from emerging economies and will continue to do so over the next five years. Despite their equal importance in this global scenario, the countries do not always experience the same changes and exhibit the same growth patterns and competitive schemes.
Moreover, due to their sheer size and the economic and social disparity observed in these three countries, it is not safe to say that the same market trends are observed throughout all of their states and provinces. Some general trends, however, remain consistent throughout the countries and each of their respective regions. In China and India, a high demand for gastrointestinal (GI) screening and intervention procedures due to the aging population and growing awareness will drive market growth. During the 2011-2018 forecast period, market expansion will be fueled by procedural growth and a higher incidence of GI disease. In Brazil, the same demographic changes will take place within the next few years and, paired with a shift toward using more disposable technology, will help to fuel the growth of the market.
The gastrointestinal endoscopic device market includes GI endoscopes, capsule endoscopes, stenting devices, dilation devices, endoscopic retrograde cholangiopancreatography devices, biopsy forceps, polypectomy snares, hemostasis devices and enteral feeding devices.
Regional Differences Impact Access to Healthcare Services
One of the trends that repeats itself throughout Brazil, China and India is the disparity in wealth, infrastructure and services available to people living in different states or provinces within each country. This makes it difficult to generalize trends within entire countries as well as forecast changes that will affect entire nations. In Brazil, for example, where the national gross domestic product (GDP) is estimated to be around $2 trillion, the country’s richest state, São Paulo, has a $530 billion GDP, while Roraima, the poorest state, has a GDP of about $3 billion. It’s a striking difference. In similar proportion, the Chinese territory of Guangdong has an $815 billion GDP, while the poorest territory, Tibet, has a significantly lower GDP of $9 billion. And lastly, India’s richest state has an $18.6 billion GDP while the Andaman and Nicobar Islands Territory fall significantly lower at $77 million.
The difference in GDP between territories implies that there are fundamental differences between the degrees of healthcare people receive where they live. While a lower GDP indicates a greater dependence on government funded healthcare systems, a higher GDP suggests greater enjoyment of private health insurance plans and a higher grade of services. The largest cities in each of these countries often offer world-class solutions that are often times not available in the poorest regions, and it is only the top layers of society that tend to take advantage of the best services available.
Reuse of Disposable Products Limits Market Growth
In 2011, the Chinese market for biopsy was almost entirely made up of disposable unit sales. Although the single-use nature of disposable products should avoid the issue of cross-contamination, it is not uncommon for hospitals in less-affluent regions to reuse disposable products up to 30 times before throwing them away. As the price of reusable devices is much higher than disposable products, these devices were not popular among hospitals with limited budgets.
Similar trends occur in India as well. At facilities in India with extremely limited budgets, physicians are known to reuse disposable biopsy forceps for multiple procedures. Although these devices are not intended for multiple use, price pressure and lack of education about the dangers of cross-contamination lead to disposable product reuse. In rural areas, some disposable biliary stone removal baskets are being reused, thus keeping demand for the devices suppressed and further intensifying the pricing pressures that already are taking place in the market.
Strict Regulation of Disposable Technology Contributes to Brazil’s GI Accessory Market
One of the trends predicted to affect Brazil within the next few years is a large shift from the use of reusable to disposable technology, examples of which are disposable biopsy forceps and polypectomy snares. In the past, the practice of reusing disposable devices in the country was widespread, but with time, due to greater education, monitoring and regulation, this practice has been changing. Even though the price of disposable devices hovers around 20 percent of the price of reusables, the overall market value is expected to grow, with more patients receiving care where a new device will need to be used per patient. In 2006, the Brazilian national health surveillance agency, Anvisa, published a resolution that declared it was prohibited to reuse certain medical devices and hospital equipment that could not adequately be sterilized before reuse. Since then, the agency has reinforced regulation in clinics and hospitals and has contributed to a shift in the products used by doctors and endoscopic surgeons.
Growing Presence of Asian Manufacturers, Domestically and Abroad
A significant trend during the past several years has been the growing strength of Chinese and other Asian manufacturers in the various GI accessory markets. Some of these companies have been able to capture significant market share in a short period of time. This has been accomplished by offering products at a significantly lower price than established competitors. However, several concerns have arisen regarding the quality of products of foreign manufacturers, which may affect their future market shares. This might explain the difference in prices between companies across regions and the difference in buying habits of the doctors or hospitals purchasing such products.
In the Chinese market for stenting devices, domestic manufacturer Micro-Tech, held the third-leading position. Micro-Tech sells most of its products in Asia, most specifically, China, and does not have a large U.S. presence. Micro-Tech (Nanjing) Co. Ltd is a joint venture and the company is strong in the biopsy forceps market. Micro-Tech is strong in the domestic market and meets Good Manufacturing Practices standards. The company’s focus on quality and customer service contributes to its strong position.
Tough Competition in India’s GI Endoscope Markets
In 2011, the leading competitor in the Indian market for GI endoscopes was Olympus Corporation. Since its development of the gastrocamera in the 1950s, Olympus has played a crucial role in the advancement of GI endoscopy and the gastroenterology profession as a whole. To encourage sales in India, Olympus established Olympus Medical Systems India Pvt. Ltd. in April 2010 and is increasing the number of local offices. Previously, Olympus distributed through another company, J. Mitra & Co. Pvt. Ltd. In efforts to maintain market share, Olympus has used an aggressive pricing strategy, especially in the ultrasound endoscope market segment. The company also is working to improve awareness among physicians about the importance of GI endoscopy through creation of endoscope training centers in several hospitals across India.
Olympus, Fujinon and Pentax also led the markets in China and Brazil. In Brazil, the majority of GI devices are imported from international manufacturers and, therefore, products are subject to import taxes, resulting in a higher average selling price than devices sold in the United States and Europe (where they are manufactured). In addition, the government requires foreign medical device manufacturers to have a local distributor registered in Brazil. As a result, prices increase further when distributors add a markup to the original price of the device.
Dr. Kamran Zamanian is president and CEO of iData Research Inc., an international market research and consulting firm focused on providing market intelligence for the medical device, dental and pharmaceutical industries, with offices in Canada and the United Kingdom. Zamanian has spent more than 20 years working in the market research industry. He received his Bachelor of Science degree in engineering from the University of Dundee in Scotland, and later earned Master of Science and doctoral degrees in market research and technology from the University of Manchester in the United Kingdom. Sara Whitmore, BSc, is an analyst manager, and Olivia Fellows, BA, is a research coordinator for iData Research. The information contained in this article is taken from reports published by iData Research titled “Chinese Market for Gastrointestinal Endoscopic Devices,” “Indian Market for Gastrointestinal Endoscopic Devices” and “Brazilian Market for Gastrointestinal Endoscopic Devices.” For more information, please contact iData Research at firstname.lastname@example.org.