MARKETS
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The French medical device market is the fourth largest in the world. In 2005, it was valued at US$6550 million. Approximately 3% of the country’s total health expenditure is spent on medical equipment and supplies. In 2006, total expenditure is projected to be US$219.5 billion. Overall the market is well developed, but there is a lack of more innovative modern technologies because of the country’s approval system. The shortfall in equipment is expected to improve as a result of a significant injection of resources. A E10-billion programme over five years (2003–2007) is underway. Espicom estimates that market growth in real terms will average 3.5% over the next five years (Table I).
Recent acquisitions
There are approximately 300 companies manufacturing medical equipment and supplies in France. Acquisitions in 2005 included the purchase by Carl Zeiss of a majority stake in the ophthalmic surgery device manufacturer, IOLtechnologie. The former operating tables business of French surgical equipment manufacturer ALM was sold to Steris Corporation and Fukuda Denshi purchased Kontron Medical. CIS Bio International, part of Schering AG’s radiopharmaceutical business, has been acquired by a Belgian Consortium of Ion Beam Applications and the Institut National des Radioelements. In addition, Tyco Healthcare now owns virtually all the shares of Floréane Medical Implants, which specialises in surgical reinforcement implants.
These acquisitions are further evidence of increasing foreign ownership in the French medical device industry. They leave only a small number of majority French-owned companies among the country’s leading medical device manufacturers, which include Air Liquide Santé/Taema, Urgo, Vygon, Thuasne, Corneal, Tornier and Guerbet.
Trade
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Table I: Market projections 2006–2010 (US$ billions). |
France exports 35–40% of its medical equipment production, although exports of most high-tech equipment are higher. Approximately two-thirds of all French medical device exports were sent to countries in Europe, with Germany taking a 14.8% share; 13.2% goes to the United States. Despite growth in exports, imports outweigh exports in most major product groups, with the notable exception of radiology equipment and supplies and other media, and surgical instruments. Imported products now supply more than 80% of the medical device market.
Capital investment
The government’s five-year E10 billion-investment programme has already approved 937 projects. This investment includes new hospitals in Strasbourg, Amiens. Dijon, Nice and Orleans, and major redevelopment in Lyon, Marseilles, Toulouse and Tours. An additional E2 billion a year is being provided for new programmes to finance infrastructure, capital-intensive equipment and information systems. Priority is being given to projects linked to implementing national health programmes such as cancer, perinatal and accident and emergency services. Funds will be allocated by region.
Reimbursement changes
After recent largely ineffective efforts to reform the health-care system, the government has embarked on a far-reaching reform programme. This aims to overhaul the system of financing and administration and promote more efficient use of resources.
The reimbursement system for a wide range of implantable medical devices has undergone an important change with effect from 1 March 2006. The list of medical devices for which hospitals are able to claim additional reimbursement has been substantially reduced. Many implantable products have been removed and their cost is now included within the new hospital stay rates, which are fixed according to the type of treatment provided. This is reportedly designed to put public and private hospitals on an equal footing with regard to funding, because many of the devices were previously only reimbursed separately for private hospitals. However, there are some devices for which both public and private hospitals have lost the right to claim additional reimbursement. These include many types of pacemaker, artificial ligaments and tendons. In future, separate reimbursement of devices will be restricted to costly innovative products or those products that have low usage rates and the cost of which represents more than 50% of the fixed hospital treatment rate.
This information was taken from the Medical Device Outlook report on France in the Medistat World Medical Market Analysis series, published by Espicom Business Intelligence, Tangmere PO20 2FS, UK, tel. +44 1243 533 322, www.espicom.com
