The Medical Device Market: UK

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Medical Devices:

Espicom Business Intelligence
Management Report January 2007

Espicom’s in-depth medical device market reports are ideal for executives wanting to understand the key drivers in medical markets and have access to a wealth of statistical data. Each report opens with an outlook section that provides analysis of the market, 5-year market forecasts, national data projections, market outlook and key developments such as regulation, health facilities and government policy. The report also provides extensive background information, population trends, health status, health expenditure, organisation & administration, hospital services, medical personnel, healthcare development, market access information, trade data and essential industry contacts. Included with the report are 3 free quarterly updated outlook reports, enabling you to keep up to date with market developments for a year. The UK has one of the largest medical device markets in the world, valued at US$7.6 billion in 2006. The domestic market is the third largest in Europe behind Germany and France. Per capita expenditure is, by comparison, much lower and is similar to that of Belgium, equal to US$126.

There are many small scale medical device manufacturers based in the UK but, although the domestic market is one of the largest in the world, there are only four companies that feature in the top 100 companies in terms of revenue. Access to the UK market is well regulated with a plethora of distributors. The NHS is the principal purchaser, via the NHS Purchasing and Supply Agency, of high cost devices, although many low value items are able to be purchased by the general public.

The government is intending to review its NHS spending plans as it becomes clear that many years of under-investment may not be cured by a rapid injection of central funds. In the light of this, the government is becoming increasingly reliant on the private sector to run and operate independent treatment centres and hospitals that have been built via the Private Finance Initiative (PFI). The spending review is targeted for 2007, as the current NHS Plan expires in 2008. Under the current NHS Plan, the government is committed to a 7% increase in real terms year on year and the Wanless Report (2002) suggests continued expenditure increases of between 4.5% and 5.5% year on year until 2012, at least.

The growth of the UK medical device market is predominantly import-led as many domestic manufacturers are not able to rapidly adjust to changes in demand. This led to a trade deficit for the fourth year in succession in 2005.

Payment by Results represents a dramatic change in how the NHS is financed and is key to the government’s healthcare modernisation plans. Although the new financing system may present opportunities to the NHS, it also creates an unprecedented level of financial risk for Primary Care Trusts.

Number of pages - 168

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