European electrosurgical devices - market analysis

Feb 16 2006

Heightened awareness among both electrosurgical device companies and consumers about the potential spread of communicable diseases during surgery is encouraging the uptake of disposable electrosurgical devices. However, high customer expectations regarding the provision of after-sales and service support is putting market participants, particularly smaller companies, under tremendous pressure.

With single-use medical devices being recycled in up to one-fifth of the hospitals in some European countries, medical technology companies are pushing for changes to existing regulations on reprocessing these medical devices. Rising awareness about communicable diseases and the need to ensure higher safety and health standards has triggered a review of the European Union’s Medical Devices Directive. This is likely to introduce regulatory changes that promote the adoption of disposable surgical devices, including electrosurgical devices.

At present, however, cost containment issues are causing several hospitals to continue investing in reusable devices. Device to device, reusable accessories are much more expensive than their disposable counterparts. “However, considering their effect on price per surgical procedure, reusable devices are much more effective at containing costs”, notes Frost & Sullivan Healthcare Analyst Claire Staniforth. “It is usually necessary to purchase a new batch of electrosurgical reusable accessories only once a year or even less. This will impact market revenues.”

Over time though, strong growth is anticipated for disposable electrosurgical accessories and for smoke evacuators. Unlike the Netherlands, evacuators are not considered a compulsory piece of equipment across the rest of Europe. As hospitals become increasingly conscious of employee health and safety, sales of smoke evacuator units is set to rise. This trend will be bolstered by prospective legislation enforcing the use of smoke evacuators across the whole of Europe by 2007.

An initial boom in device sales is expected to follow the implementation of such legislation. At the same time, the requirement of one smoke machine – priced between $2,500 and $4,500 – per electrosurgical generator will cause a massive growth in market size in 2007.

Novel technologies are underlining renewed interest in electrosurgical devices. For instance, the introduction of electrosurgical units and accessories specific to a certain type of surgery, for example gynaecology or urology, is poised to boost the sales of specialist surgical packages.

Reinforcing the expansion of the European electrosurgical devices from $171.6 million in 2004 to $247.2 million in 2011 will be a number of complementary trends. These include the increased adoption of minimally invasive surgical techniques and of day surgery. Simultaneously, an overall upsurge in surgical procedures related to a rapidly aging population, of non-essential lifestyle surgical procedures with a purely cosmetic outcome as well as the rising incidence of lifestyle-related clinical conditions (obesity, gall bladder and pancreatic diseases) that require surgical intervention are set to encourage continued growth in the electrosurgical devices market.

Amidst this, a real challenge faced by electrosurgical device companies is that some surgeons have a low level of awareness about the effectiveness of electrosurgery, as an alternative to traditional, cold-steel surgical techniques.

“This is where companies must introduce workshops in hospitals or ensure that they are involved with surgeons from the first day of their training,” advises Ms. Staniforth. “Otherwise, the next generation of surgeons will become reliant and therefore, comfortable with traditional surgical methods. If this is the case, companies will see a reduction in interest from the new generation of surgeons and sales will take a turn for the worse.”

In addition, high customer expectation levels of after-sales and service support are making it increasingly hard for market participants to comply with the expectations of customers as in most cases, it involves significant additional costs. This situation is making survival particularly hard for smaller companies as, in all probability, they lack the geographic coverage or staffing capabilities required to satisfy clients’ needs.

“Companies that can offer a complete product portfolio, with high levels of after-sales and service support can be expected to experience moderate growth in the maturing market,” says Ms. Staniforth. “Participants that stay close to the end user, and collect enough feedback related to what is desirable in terms of clinical application, will have the knowledge to lead market trends. In doing so, these companies will present partnership potential to surgical facilities that will offer sufficient strategic benefit and ensure continued revenue generation.”

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