Drastic market changes with MRI contrast media and PET radiopharmaceuticals emerging as most promising segments

Oct 21 2004

Significant changes in the European contrast media and radiopharmaceuticals market are seeing some segments experience growth while others near saturation.

For instance, in the contrast media market, the X-ray/computed tomography (CT) segment is experiencing a slump in growth largely due to the introduction of new technologies that require less contrast agents. On the other hand, the magnetic resonance imaging (MRI) and ultrasound segments are witnessing exceptional growth.

A similar situation prevails in the radiopharmaceuticals market with positron emission tomography (PET) agents growing much at a much faster rate than the other segments. Apart from the saturation in some segments, the market is also experiencing a fair amount of price erosion that is slowing its overall growth.

"However, MRI contrasting agents and PET radiopharmaceuticals are showing tremendous growth potential and helping to balance the effects of market saturation and price erosion in the overall contrast media and radiopharmaceuticals market," remarks Research Analyst Ms. Srividya Badrinarayanan from Frost & Sullivan. "Companies that overcome the pricing threats and introduce cost-effective and enhanced imaging agents are well poised for success."

New analysis from Frost & Sullivan reveals that the European contrast media market generated revenue of USD 779.4 million in 2003 and is expected to grow at a compound annual growth rate (CAGR) of 6.8 per cent to reach USD 1238.3 million in 2010. The radiopharmaceuticals market generated revenue of USD 415.9 million in 2003 and is forecast to grow at a CAGR of 6.4 per cent to reach USD 643.6 million in the corresponding period.

In particular, the MRI segment - which currently contributes a sizeable portion of the contrast media market's revenues - is expected to show double-digit growth over the forecast period (2003 to 2010). This is because of the increased number of MRI procedures being undertaken and the resultant installation of MRI equipment. The focus on MRI contrast media has also grown due to its superior contrasting features and wider application.

While the market anticipates the introduction of new products - particularly in the MRI contrast media and ultrasound segments - the slow rate of product adoption by physicians and technologists is bound to be a limiting factor. This disinclination to adopt new products is attributable to the price sensitiveness of the market.

"This situation is especially apparent in countries such as France and the United Kingdom," observes Ms. Badrinarayanan. "Although these markets show great potential for growth, price sensitivity and reluctance in adopting these products are creating a huge impact on the overall contrast media market."

Unclear reimbursement policies and pricing are also restraining market growth. Individual countries have different policies on the reimbursement of contrasting agents, with some countries having no clear guidelines at all. Countries such as Germany and Italy follow extremely strict policies.

This creates uncertainty among participants attempting to introduce their products in these countries. In many cases, the reimbursement provided by the authorities is meagre, causing physicians to shy away from high-cost - albeit effective - products. As a result, the industry as a whole loses out.

Despite these challenges, the European contrast media and radiopharmaceuticals market does offer scope for expansion. As the competition increases and products reach maturity, the focus on research and development is expected to rise - bringing in a surge of new products.

However, the R&D departments of industry participants are also likely to face greater pressure to develop more cost-effective products that offer equally good - if not enhanced - performance to meet the needs of end users.

As participants seek to consolidate their positions, the market is also likely to see a spate of mergers and acquisitions occurring in the near future. A case in point is the recent acquisition of Amersham plc by GE Medical Systems - a move that has united an imaging company with a contrasting agent company.

Finally, with radiologists and technicians across Europe always seeking to identify better imaging agents that provide enhanced image quality and aid in the improved detection of diseases, the future for this market appears promising.

"Apart from the increasing focus on fast-growing segments such as MRI and PET, the rising interest in ultrasound contrasting agents and therapeutic pharmaceuticals resulting from greater awareness of cancer diagnostics and cancer therapeutic agents is helping promote the growth of the overall market," concludes Ms. Badrinarayanan.