Long-term growth and profitability in the medical device market will be fueled by continuous innovation and constantly evolving technology. During the next decade, the industry will continue to grow at double-digit rates, thanks to the constant introduction of new designs and novel products that offer better healthcare to patients, reduce hospitalization stays, and reduce the cost burden on patients and insurers.
With innovative technologies and surgical techniques being launched, the next generation of medical devices will feature wireless connectivity, miniaturization, ease of use and minimally invasive interfaces. However, the industry will continue to be characterized by high-mix, low-volume assembly processes that demand frequent changeovers and adherence to stringent quality standards.
"Medical devices have evolved to become a mainstay in the treatment of a number of difficult-to-treat diseases and disorders," says Dhiraj Ajmani, senior medial device industry analyst at Frost & Sullivan Inc. (San Antonio). "More emphasis on outpatient and minimally invasive surgery has lead to the acceptance of medical devices as a therapy of choice. Technology advancement in medical devices has become crucial in developing not only innovative therapeutic solutions, but also new surgical techniques."
For instance, in less than 20 years, the field of drug delivery has evolved from a fledgling market to a multibillion dollar niche segment. Today, approximately 100 medical device companies are developing new methods of drug delivery. Those products promise to provide greater safety and efficacy, fewer side effects, improved convenience and patient compliance, and lower healthcare costs than traditional methods.
Advanced Drug Delivery
According to Medtech Insight LLC (Newport Beach, CA), the U.S. market for advanced drug delivery products totaled more than $33 billion in 2002. The market research company forecasts a 15.4 percent annual sales increase through 2012.
A growing emphasis on drug self-administration is having a major impact on the industry. The aging population and managed care initiatives are major forces driving the growth of home healthcare, a trend that includes the self-administration of drug therapies for chronic conditions such as diabetes, arthritis and hormone replacement therapy. This trend is creating an increased demand for medical devices that are patient-friendly and cost-effective.
"There's a definite healthcare trend that's fostering interest in the self-administration of drugs for chronic ailments, particularly among older patients who often have difficulty traveling to healthcare providers for injections," says George Perros, managing director of Greystone Associates (Amherst, NH). "This shift will benefit delivery technologies that are patient-friendly and can improve compliance."
According to Perros, user-friendly designs and the availability of an increasing number of drugs in prefilled disposable cartridges are propelling the growth of injector pens at the expense of other drug delivery methods, such as traditional syringes. Pen injectors are a leading drug delivery method in Europe. In fact, Perros says more than half of all European diabetics administer insulin via the devices.
"Advances in synthetic materials and concurrent development partnerships between pen designers and drug developers are important factors in the growth of this segment," explains Perros. "Pen growth will expand as new therapies become available for [the] devices."
New forms of inhalation devices are also being developed. "The importance of inhalation devices in drug delivery has traditionally derived from their ability to deliver pharmaceuticals to the upper lung and respiratory system for localized treatment of pulmonary diseases, such as asthma and emphysema," says Perros. "Recent advances and investment in powder formulations, particle engineering, and device architecture have positioned dry powder inhalation as a formidable challenger to more established pulmonary methods, such as metered dose inhalers and nebulizers."
In addition, Perros says a number of companies are addressing "the underlying physiological factors that comprise the various forms of cardiovascular disease." They are developing devices that deliver therapeutic genes that provide beneficial effects directly in the compromised heart tissue. "Gene-based cardiovascular therapies [will] be an important therapeutic option in the second half of the decade," predicts Perros.
To compete with noninvasive technology, manufacturers of traditional drug delivery devices have "started focusing on easy drug administration for patient convenience through enhanced technological innovation," says Alpita Shah, a research analyst at Frost & Sullivan. For instance, insulin syringe makers are producing finer and thinner needles to enhance compliance, while jet injector companies are working on products that cause minimal pain.
"Insulin pump manufacturers are also working on the higher convenience factor," adds Shah. For example, they are introducing more advanced pumps that have to be monitored only once every 2 to 3 days.
Advances in materials processing, such as micromachining, nanoprocessing and structured film forming, are also helping manufacturers create new minimally invasive drug delivery devices. These advances have led to the development of a new breed of devices called microneedles, which feature extremely small needles. They deliver drugs by mechanically perforating the outer skin layer and allowing for transdermal absorption of the active compound. Precise machining, extrusion, casting and forming technology is used to create an array of microneedles.
"Microneedle technology is attaining commercial viability at a time when drug developers are faced with new challenges as they assess ways to administer a new class of compounds with significant therapeutic potential," says Perros. "The widespread availability of rapid throughput screening is accelerating the discovery of large-molecule therapeutic compounds that cannot tolerate passage through the digestive system, requiring pharmaceutical companies to forego [traditional] oral formulations and select alternate routes of administration. By penetrating the stratum corneum [the dead outer layer of skin], microneedle delivery systems can effectively deliver drugs systemically with minimal discomfort."
Engineers at the Georgia Institute of Technology (Georgia Tech, Atlanta) have developed a series of microneedle arrays for delivering drugs and vaccines through the skin without causing pain. The hollow and solid microneedles, in a variety of shapes and sizes, have been created from metals, biodegradable polymers, silicon and glass. The micron-scale needles deliver proteins, nanoparticles, and both small and large molecules through the skin. Arrays of up to 400 needles are designed to punch holes in the outer layer of skin.
"There is an aggressive movement toward bringing microneedles to the market," claims Mark Prausnitz, a professor in the School of Chemical and Biomolecular Engineering. "We've shown that microneedles can serve as a hybrid drug delivery system, combining the advantages of conventional needles-which deliver drugs easily-with transdermal patches that are more patient-friendly." Prausnitz claims that he and his colleagues have developed manufacturing processes that are suitable for mass-producing microneedles from inexpensive metal and polymer materials.
Several medical device manufacturers have been pursuing the microneedle concept. For instance, BioValve Technologies Inc. (Worcester, MA) has licensed the Georgia Tech technology. It is marketing a product called Micro-Trans for applications such as fluid sensing of glucose, hormones, blood gases and therapeutic drug levels.
Kumetrix Inc. (Union City, CA) has developed a device that contains a cartridge of disposable silicon microneedles and a handheld meter. A patient presses the meter against his or her skin, causing a microneedle to penetrate and draw a blood sample about 0.01 the size of a drop. The silicon microneedle itself is approximately the size of a human hair. Blood immediately flows through the needle into a tiny reservoir and reacts with chemicals to produce a readout of the blood glucose level. The entire one-step process can be completed in less than 1 minute.
For the last 50 years, the medical device industry has been at the forefront of new technology. However, all those advances may pale in comparison to the future potential of nanotechnology. Unlike current production methods, in which existing parts and components are combined, nanotechnology takes individual atoms and precisely assembles them to produce objects with desirable characteristics.
"What was recently only pure science fiction is now becoming commercial reality," claims Patrick Driscoll, president of MedMarket Diligence (Foothill Ranch, CA). "Hundreds of commercial and research groups are developing technologies that work at the molecular and cellular levels, and the synergistic integration of microfluidics, gene chips and nanomedicine is leading to new applications and markets. These advances are now proving their potential in delivering individually specific, minimally invasive and less expensive medicine."
According to Driscoll, nanotechnology is no longer in the realm of science fiction. Indeed, many cutting-edge applications are now in clinical trials. For instance, microelectromechanical systems (MEMS) have been developed that can inoculate individual red blood cells as they travel through a capillary. "Nanoparticles can be directed to specific tissues or cells," explains Driscoll. "They can enter individual cells to seek specific molecules, report on their presence, and be activated to initiate a treatment procedure."
Long-range forecasts indicate that nano-enabled services could represent a $180 billion healthcare market by 2015. "Besides facilitating detection of minutest traces of diseases such as cancer-or perhaps detecting a single spore of pathogen-nanostructured materials and nanodevices could provide better diagnosis of complex diseases and enable unprecedented drug delivery," says Girish Solanki, a healthcare industry analyst at Frost & Sullivan. "With a new generation of nanochips, we could obtain much more accurate medical diagnosis; quickly and efficiently screen the mind-boggling array of drug candidates; and perform targeted delivery of drugs and vaccines like never before."
In terms of drug delivery, developments in nanoencapsulation promise enhanced delivery and absorption. "Additionally, researchers are contemplating the possibility of using magnetic nanoparticles containing drugs to be delivered to specific parts of the body by means of a magnetic field," explains Solanki. "This is likely to boost therapeutic benefit while minimizing side effects on other parts of the body."
According to Driscoll, companies that have advanced beyond the lab include MicroCHIPS Inc. (Bedford, MA), which has developed drug-delivery microchips, and NanoDelivery Inc. (Nashville, TN), which has developed drug delivery through microparticles and nanoparticles.
Nanosensors also offer endless potential. "In addition to nanosensors being used to detect DNA sequences in the body, implanted nanosensors could enable simpler and more effective diagnosis," says Solanki. For instance, implanted devices could dispatch a signal to a pump to release more insulin for diabetes patients. Similar devices could be extended, over time, to deliver a wider range of medication.
Future generations of smart medical implants, such as intelligent artificial hips, will be able to detect and destroy bacteria. For instance, a hip embedded with MEMs could contain sensors that would detect germs. The MEMs would trigger the release of antibodies stored within the implant.
Implantable medical devices using biosensors and fuel cells are currently under development. When the technology is perfected, it will lead to highly efficient, long-lasting, sophisticated medical devices.
Some day soon, biosensors will sense early signs of a heart attack. Researchers at the University of Missouri (Columbia, MO) are developing implantable devices that monitor the release of natural chemicals, such as troponins, which indicate a heart attack is imminent.
"The human body experiences significant biochemical activity long before the physical symptoms of a heart attack surface," says Sheila Grant, assistant professor of biological engineering. Grant and her colleagues are developing biosensors for two types of deployment. One device, a glass disk that is approximately 1-centimeter square, can be implanted under the skin's surface. A second device is an optical fiber that is designed to be inserted into blood vessels near the heart. Grant says this sensor may be coupled with a pacemaker.
The devices have been successful in a lab setting, but designing a sensor that is compatible with the chemistry of the human body is more problematic. "The sensing capability is there," Grant points out. "We've already shown that we can sense troponins in the laboratory. The biocompatibility issue is much more complex. We have to try to fool the body into accepting this foreign material."
For instance, Grant says researchers must coat the sensors with a material that will allow them to integrate with surrounding tissue. The challenge is finding a way to prevent fibrous tissue from encapsulating sensors and rendering them ineffective.
Finding an alternative power source is another challenge facing medical device engineers. Many experts view fuel cells as the most promising alternative to batteries in medical implants. Conventional fuel cells run on either hydrogen gas or liquid methanol. But, some prototype fuel cells can run on more exotic fuels, such as glucose or formate.
Two new microfluidic fuel cells developed at Brown University (Providence, RI) may help make long-running medical implants a reality. The miniature devices provide long-term power for medical devices such as implants that monitor glucose levels in diabetics.
The Brown fuel cells do not require an ion-conducting membrane or selective catalysts at the electrodes to separate the fuel-containing fluids-two thorny technological traits of fuel cell design that must be considered in the development of miniature fuel cells, notes Tayhas Palmore, associate professor of engineering, biology and medicine. Instead, the new fuel cells exploit the fact that fluids do not mix under certain conditions. "We take advantage of how fuels flow in small channels," says Palmore, "in that they don't mix, which means we can keep fuels separated without a membrane."
The fuel cells work in tandem to provide power under the pulsating conditions that mimic the flow of blood in the body. One of the microfluidic fuel cells features a branched-channel, which encloses six electrodes. This fuel cell is "most suitable for generating electrical power under conditions of pulsed-flow," says Palmore. "The design of the device makes possible the delivery of power to a chip as a result of changes in the concentration of a fuel, such as glucose. This power feedback is a necessary component in an embedded sensor for diabetes."
Applied Digital Solutions Inc. (Delray Beach, FL) recently received approval from the U.S. Food and Drug Administration (FDA, Rockville, MD) for a tiny microchip that can be implanted under the skin to give doctors instant access to a patient's records. The controversial device transmits a signal to a scanner that allows healthcare professionals to confirm a patient's identity and obtain detailed medical information from an accompanying database.
The VeriChip is the world's first implantable radio frequency identification (RFID) microchip for human use. It is inserted under the skin in a brief outpatient procedure. The device is about the size of a grain of rice and costs approximately $200. It could eventually be used for patient monitoring applications, which is expected to grow more important as the patient-to-caregiver ratio grows wider due to a severe nursing shortage.
Demand for telemedicine equipment is growing 20 percent annually, says MedMarket Diligence's Driscoll. "Healthcare providers at all sites of service, including hospitals, health networks, physicians offices, clinics and homecare providers, are steadily adopting telemedicine applications as routine parts of healthcare delivery in the U.S.," he points out. "Combined with acceptance by third-party payers, telemedicine is already, or is soon to be, a routine part of cardiology, dermatology, teleradiology, ENT [ear, nose and throat care], emergency medicine, gastroenterology, home care, neurology, oncology, ophthalmology, mental health, telerehabilitation, telepathology and eventually even telesurgery."
As the U.S. population ages during the next decade, Driscoll says the medical device industry will be affected by the movement of healthcare treatment to alternate care sites, continuing demand for cost-effective treatment and short lengths-of-stay.
The next 10 years will see an accelerating market for cardiovascular therapeutics thanks to the aging of the baby boom generation, which will begin to turn 65 in 2011. Over the next 20 years, the fastest growing segment of the U.S. population will be those aged 55 and over.
Because of that demographic trend, the market for drugs and medical devices designed to treat hypertension, atherosclerosis, and congestive heart failure in the over-45 population is predicted to reach $20 billion by 2013. According to a recent study conducted by Kalorama Information (New York), the population over 45 years of age currently represents approximately 36 percent of the total U.S. population but almost 90 percent of the cases of cardiovascular disease. In 2013, however, those over 45 will represent more than 40 percent of the population and almost 95 percent of the cardiovascular disease cases.
While the aging of the American population is creating a large part of this market's growth, there are other drivers as well. For example, the development of advanced medical devices, such as drug-eluting stents, is boosting demand.
A combination of demographic factors and technological advances will also fuel dramatic market growth for orthopedic devices. With a larger elderly population, there will be a rise in the incidence of age-related orthopedic problems, such as osteoarthritis, osteoporosis, degenerative disc disease, herniated discs and spondylolysis, triggering a significant demand for braces, supports, and replacement bones or joints. The increasing development of new materials, such as carbon fiber reinforced plastics, will promote the creation of innovative products, while opening up applications in numerous niche markets.
In addition, the home healthcare products market is expanding rapidly, due to the aging population and the corresponding increase in chronic illnesses and diseases, the expense and reduced length of acute care hospital stays, advances in new home medical technologies, and patient demand for home-based products and services. According to Medtech Insight, the overall market for these services in the United States is expected to increase from $56 billion in 2003 to $112 billion in 2012.
One of the fastest-growing segments will be obstructive sleep apnea therapy products. Sales are projected to increase from $365 million in 2003 to more than $636 million in 2007, a compound annual growth rate of nearly 15 percent.
The American Sleep Apnea Association (Washington, DC) claims that more than 12 million Americans suffer the problem each evening. Sleep apnea is a serious health condition that causes constant interruptions from sleep. The most common form of sleep apnea is caused by a blockage of the airway, often when the soft tissue in the rear of the throat collapses and closes during sleep. As a result, people with untreated sleep apnea stop breathing repeatedly and may wake up 20 to 30 times per hour during the night. The most common symptoms for sufferers are snoring and fatigue.
Until recently, one of the only effective cures for the disease was painful surgery and uncomfortable, lifelong treatment options. However, the FDA has approved the first implantable treatment for mild to moderate sleep apnea.
The Pillar palatal implant system, developed by Restore Medical Inc. (St. Paul, MN), is designed to restore or stiffen the palate, a contributor in nearly 80 percent of patients suffering from sleep and breathing disorders. A minimally invasive office procedure places three inserts in the patient's soft palate, causing the palate to stiffen. The stiffening helps to prevent or lessen blockages of the airway. Pillar inserts are less than 1-inch long and made from a woven soft polyester material that has been used for many years in implantable medical products. Restore Medical manufactures the device in a state-of-the-art Class 100,000 clean room.
The market for home defibrillators is also expected to grow rapidly in the near future. In fact, the FDA recently approved the first device available for home use without a prescription. It is manufactured by Royal Philips Electronics (Amsterdam).
More than 75 percent of cardiac arrests occur at home. Defibrillators provide treatment for ventricular fibrillation, the most common cause of sudden cardiac arrest, by delivering a controlled electrical shock to restore a normal heart rhythm.
Sudden cardiac arrest claims approximately 340,000 lives a year in the United States. "It takes an average of 9 minutes for emergency professionals to reach a victim in a typical U.S. community," claims Deborah DiSanzo, vice president of Philips Medical Systems (Andover, MA). "For each minute that passes before defibrillation therapy is administered to a victim, the chance for survival decreases by about 10 percent."
From Auto Parts to Medical Devices?
Convergence is occurring throughout the medical device industry. For example, most people would never imagine an automotive company making medical devices 10 years ago. But, in today's competitive market, anything goes.
Indeed, the world's largest auto parts manufacturer, Delphi Corp. (Troy, MI), recently jumped into the healthcare field by created Delphi Medical Systems. The new company is focused on being a provider of technology and manufacturing in the areas of dialysis, respiratory care, mobility and infusion. It will provide components and complete medical instrumentation to medical equipment manufacturers and distributors.
"As a Delphi subsidiary, Delphi Medical Systems has access to Delphi's technology experience and strength, as well as the global footprint needed to supply medical devices virtually anywhere in the world," explains Christophe Sevrain, managing director. He says the company is "capable of providing up-to-date technologies in circuit electronics, sensors, user-interfaces, wireless technologies and more to address challenges in a global market."
Delphi Medical Systems recently announced an $80 million contract with Sunrise Medical Inc. (Carlsbad, CA), a large manufacturer of homecare and extended care products, such as oxygen and sleep therapy devices, respiratory aids and wheelchairs.