The Medical Device Market: USA

Published : April 2013
No. of Pages : 94

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With a population over 300 million, the USA is the third largest country in the world, behind China and India. The largest state is California, with a population of 37 million.

At an estimated US$120.4 billion in 2012, the US medical device market is the world's largest. Per capita expenditure, at US$381, is the second highest in the world.

Much of the market is in private hands; there is no single health system. Public healthcare systems, known as Medicaid, for those on low incomes, are operated by each State. Since 1960, the Medicare system has provided hospital care for the elderly; this has also provided prescription drug coverage since 2006.

President Obama succeeded in signing his healthcare reform bill into law on 23rd March 2010. The bill, formally called the Patient Protection and Affordable Care Act (PPACA) HR 3590, will eventually extend health insurance cover to an estimated 32 million Americans who do not have any form of health insurance.

In January 2012, the Obama administration said the bill is on track to being implemented, despite opposition from some States. The law requires all States to create new health insurance markets called exchanges, so that people who do not have insurance can buy tax-payer subsidised private cover. The law also expands eligibility for Medicaid so low-income adults who have no dependent children can get government insurance. Putting the two approaches together, more than 30 million Americans are expected to gain coverage by January 2014. At the end of June 2012, the Supreme Court upheld the entire law in a 5-to-4 decision which deemed that the mandate was constitutional under the taxing authority afforded to the federal government. Despite only 13 States having set up exchanges to-date, the re-election of President Obama may spur action from those which were waiting for the election result. The remaining States which are still opposed to the changes have until January 2013, one year before the exchanges are to be up and running, before the Federal government can intervene and manage the process.

The USA is home to many of the world's leading medical device manufacturers, such as Johnson & Johnson, General Electric, Baxter, Covidien and Medtronic. Seven out of the world's top ten medical device manufacturers are US companies.

Imports are forming an increasingly significant part of the market, and now account for around 30% of the total. This growth is partly explained by US manufacturers using cheap locations abroad, such as Ireland or Mexico, in order to re-export to the US market.

Imports grew by 8.9% to reach US$35.3 billion in 2011. All categories posted positive growth, with consumables recording the strongest rate of 12.1% for the period, reaching US$5.3 billion. The largest category, diagnostic imaging, rose by 7.4% during the period to reach US$8.3 billion.

The market is highly regulated, and can be an expensive one in which to operate. It is, however, transparent and 'rules-based'. The US is a major site for R&D and clinical trials.

A 2.3% tax on sales of medical devices comes into effect in January 2013 as part of the Patient Protection and Affordable Care Act (PPACA). Estimates suggest this will add US$2.5 billion to the 2013 tax bill of the US medical device manufacturing industry.

Table Of Contents

Executive Summary 1

Key Background Data 3
Geographic 3
Political 3
Economic 3
Healthcare System 4
Centers for Medicare & Medicaid Services (CM S) 4
Medicare 4
Medicaid 5
Children's Health Insurance Program Reauthorisation Act 6
Health Insurance Portability and Accountability Act of 1996 6
Private Health Provision 6
Blue Cross and Blue Shield Association (BCBSA) 6
Managed Care 6
Patient Protection and Affordable Care Act HR 3590 (Healthcare Reform Bill) 7
Medical Device Excise Tax 7
Health Expenditure 7

Market Developments 9
Post-election: Obamacare Moves Forward 9
More Republican Governors Embrace Medicaid Expansion 9
Medical Device Excise Tax Takes Effect 9
US Imports Return to Growth 9
FDA Announces Partnership Aiming to Accelerate Access to New Medical Device Technologies 10

Medical Market Analysis 11
Overview 11
The Market in 2012 12
Past Performance 2007-11 13
Future Performance 2012-17 14
The US Market for Consumables 20
The US Market for Diagnostic Imaging 22
The US Market for Dental Products 24
The US Market for Orthopaedic & Prosthetic Products 26
The US Market for Patient Aids 28
The US Market for Other Medical Devices 30

Annual Imports 33
Consumables 34
Diagnostic Imaging 34
Dental Products 34
Orthopaedic & Prosthetic Products 34
Patient Aids 34

Monthly Imports 48

Annual Exports 49
Consumables 50
Diagnostic Imaging 50
Dental Products 50
Orthopaedic Products 50
Patient Aids 50

Monthly Exports 66

Domestic Production 67
Manufacturing by State, 2002 69
Trade Associations 70
Advanced Medical Technology Association (Advamed) 70
Medical Device Manufacturers Association (MDMA) 70
National Electrical Manufacturers Association (NEMA) 70

Domestic Manufacturing 71
Local Manufacturers 71
Overview of the Leading Domestic Producers 71
1. Johnson & Johnson 71
2. GE Healthcare 73
3. Medtronic 73
4. Baxter International 74
5. Covidien 74
6. Stryker 75
7. Becton Dickinson 75
8. Boston Scientific 76
9. St. Jude Medical 76
10. Zimmer 77

Multinational Activity 78

Accessing the Market 80
Distribution 80
Health Industry Distributors Association (HIDA) 80
Independent Medical Distributors Association (IMDA) 80

Medical Device Regulations 81
Medical Device User Fee and Modernisation Act of 2002 81
Reprocessed Single-Use Devices 81
Third Party Reviews 82
FDA Modernisation Act of 1997 82
Pre-Marketing Requirements 82
510(k) Pre-Market Notification 83
510(k) Paradigm 83
Pre-Market Approval Application 83
510(k) Reform Plan 84
Humanitarian Device Exemption 84
Investigational Device Exemptions 85
Third Party Review 85
Post-Marketing Requirements 86
GMP/QS Regulations 86
Compliance 87
Requirements for Record Keeping 87
Product Liability 88
Mutual Recognition Agreement with EU 89

Methodology & Sources 90
Trade Code Classifications 90
Methodology 92
Sources 93

List Of Tables

Espicom Analysis of the US Medical Market, 2013 2
Economic Projections, 2013-18 3
Largest Health Insurance & Managed Care Companies by Revenue and Profit, 2011 6
Summary of Key Data, 2006-12 8
US Medical Device Market, Key Ratios, 2012 11
US Medical Device Market by Category, 2012 12
Projected Medical Device Market, 2012-17 14
The US Medical Device Market, 2007-17 (US$ Millions) 15
The US Medical Device Market, 2007-17 (US$ Per Capita) 17
The US Medical Device Market, 2007-17 (% of Total) 18
The US Medical Device Market, 2007-17 (% Change) 19
The US Consumables Market, 2007-17 (US$ Millions) 20
The US Consumables Market, 2007-17 (US$ Per Capita) 20
The US Consumables Market, 2007-17 (% Change) 20
The US Diagnostic Imaging Market, 2007-17 (US$ Millions) 22
The US Diagnostic Imaging Market, 2007-17 (US$ Per Capita) 22
The US Diagnostic Imaging Market, 2007-17 (% Change) 23
The US Dental Products Market, 2007-17 (US$ Millions) 24
The US Dental Products Market, 2007-17 (US$ Per Capita) 25
The US Dental Products Market, 2007-17 (% Change) 25
The US Orthopaedic & Prosthetic Products Market, 2007-17 (US$ Millions) 26
The US Orthopaedic & Prosthetic Products Market, 2007-17 (US$ Per Capita) 27
The US Orthopaedic & Prosthetic Products Market, 2007-17 (% Change) 27
The US Patient Aids Market, 2007-17 (US$ Millions) 28
The US Patient Aids Market, 2007-17 (US$ Per Capita) 29
The US Patient Aids Market, 2007-17 (% Change) 29
The US Other Medical Devices Market, 2007-17 (US$ Millions) 30
The US Other Medical Devices Market, 2007-17 (US$ Per Capita) 31
The US Other Medical Devices Market, 2007-17 (% Change) 31
Summary Medical Imports by Product Area, 2007-11 (US$000s) 34
Summary Medical Imports by Product Area, 2007-11 (US$000s % Change) 35
Summary Medical Imports by Product Area, 2007-11 (% of Total) 36
Leading Medical Equipment Suppliers by Product Area, 2011 (US$000s) 37
Top 20 Suppliers to the American Market, 2011 (US$000s) 38
Detailed Imports of Medical Equipment, 2007-11 (US$000s) 39
Detailed Imports of Medical Equipment, 2007-11 (Growth Trends) 42
Detailed Imports, Leading Suppliers, 2011 (US$000s) 45
Monthly Imports of Medical Equipment, January 2010-November 2012 (US$ Millions) 48
Summary Medical Exports by Product Area, 2007-11 (US$000s) 50
Summary Medical Exports by Product Area, 2007-11 (US$000s % Change) 51
Summary Medical Exports by Product Area, 2007-11 (% of Total) 52
Leading Medical Equipment Destinations by Product Area, 2011 (US$000s) 53
Top 20 Destinations for American Exports, 2011 (US$000s) 54
Detailed Exports of Medical Equipment, 2007-11 (US$000s) 55
Detailed Exports of Medical Equipment, 2007-11 (Growth Trends) 58
Detailed Exports, Leading Destinations, 2011 (US$000s) 61
Balance of Medical Trade, 2007-11 (US$000s) 64
Monthly Exports of Medical Equipment, January 2010-November 2012 (US$ Millions) 66
Summary Sector Trends, 1999-07 (US$ Millions) 67
Medical Equipment Production by Category, 2007 (US$ Millions) 68
Establishments, Workers & Shipments by Top Five States & Industry Sector, 2002 69
Top 10 US Manufacturers by Medical Device Revenue, 2008-12 (US$ Millions) 71
HS Trade Codes Used in This Report 90
HS Trade Codes, Rearranged 91

List Of Charts

US Medical Device Market by Category, 2012 (%) 12
Change in the US Medical Device Market, 2007-17 (%) 13
CAGR of the US Medical Device Market by Product Area, 2007-11 (%) 13
Market Projections, 2012-17 (US$ Millions) 14
Projected CAGR of Medical Device Market by Product Area, 2012-17 (%) 15
The US Market for Consumables, 2007-17 (US$ Millions) 21
The US Market for Consumables, 2007-17 (CAGR) 21
The US Market for Diagnostic Imaging, 2007-17 (US$ Millions) 23
The US Market for Diagnostic Imaging, 2007-17 (CAGR) 24
The US Market for Dental Products, 2007-17 (US$ Millions) 25
The US Market for Dental Products, 2007-17 (CAGR) 26
The US Market for Orthopaedic & Prosthetic Products, 2007-17 (US$ Millions) 27
The US Market for Orthopaedic & Prosthetic Products, 2007-17 (CAGR) 28
The US Market for Patient Aids, 2007-17 (US$ Millions) 29
The US Market for Patient Aids, 2007-17 (CAGR) 30
The US Market for Other Medical Devices, 2007-17 (US$ Millions) 31
The US Market for Other Medical Devices, 2007-17 (CAGR) 32
Medical Equipment Imports, 2003-11 (US$ Millions) 33
Change in Medical Equipment Imports, 2003-11 (%) 33
CAGR of Medical Imports by Product Area, 2007-11 (%) 35
Medical Equipment Imports by Product Area, 2011 (%) 36
Leading Medical Equipment Suppliers, 2011 (%) 38
Medical Equipment Exports, 2003-11 (US$ Millions) 49
Change in Medical Equipment Exports, 2003-11 (%) 49
CAGR of Medical Exports by Product Area, 2007-11 (%) 51
Medical Equipment Exports by Product Area, 2011 (%) 52
Leading Medical Equipment Destinations, 2011 (%) 53

The Medical Device Market: USA

Published By: Espicom Limited

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