The value of the global neurological therapeutic device market has been growing since 1995 and will continue to grow through 2004, although the rate of growth will slow between 1998 and 2004. On average, growth will be at 19.4% annually. These figures come from a new report from Datamonitor, Trends and Dynamics 2000: Developments in Global Neurological Therapeutic Devices, which looks at sales of hydrocephalus, neurovascular, cranial, electrosurgical, and radiological devices as well as other emerging technologies.
        The total value of the global neurological therapeutic device market in 1999 was $30.2 billion, growing at 42.8%. In 2004, this figure should increase to $48.8 billion. Still, growth rates have slowed and will continue to slow as the market matures and overall prices decline.
        In terms of specific markets, the US neurological therapeutic device market will continue to grow through 2004, although at decreasing rates between 1998 and 2004. Average annual growth will be at 19.75%. The market was valued at $29.8 billion in 1999, when it was growing at 43.5%. In 2004, the total market value should reach $48.3 billion.
        The European market will also continue to grow through 2004, although the actual rate of growth will rise and fall. Average annual growth will reach 3.7%. The compound annual growth rate reached 5% between 1995 and 1999, but will most likely slow to 2.4% from 2000 and 2004. The total value of the European market in 1999 was $406.8 million, growing at 5%. In 2004, this figure is expected to top $492.0 million. Growth rates are directly affected by purchases of gamma knives, which can cost between $2.5 million and $5 million.
        Overall, the market is dominated by well-known manufacturers such as Medtronic, J&J, and Boston Scientific, amongst others, as well as neurology-specific companies such as Radionics and BrainLAB. Consolidation will continue as competitors seek to acquire and bundle a full product range to win hospital contracts. Niche bundles are potentially more effective than bundles involving large ranges of products, and manufacturers need to address their bundling strategies in order to win physician favor; for instance drill tips and cutters can be placed with high-speed drills.
        Prices are falling in the global neurology market, thanks to increased price-based competition and recent healthcare reforms across Europe. Smaller companies are attempting to steal market share from the major competitors by forcing prices lower and capturing niche markets, while simultaneously resisting acquisition by one of the leading manufacturers.
        As for specific technologies, catheter-based neurological treatments are considered preferable to conventional surgical techniques because their less-invasive nature helps decrease patient trauma and reduce costs. The development of neurological catheters has kept pace with similar developments in the field of cardiology, and technological advancements are permitting greater reduction in French sizes for neurological catheters.
        Stereotactic radiosurgery is gaining popularity as a viable alternative to traditional radiotherapy, thanks to physician preference for a steeper dose gradient at the periphery of the irradiated target, which minimizes the exposure of surrounding tissue to radiation. Stereotactic radiosurgery surpasses physician preference for conventional craniotomies in selected cases of metastatic brain tumors, arteriovenous malformations, and acoustic nerve tumors. Stereotactic radiosurgery is evolving rapidly because it does not subject the patient to surgery and may be performed on an outpatient basis. This procedural difference could result in substantially lower hospital costs associated with stereotactic radiosurgery as well as reduced risk for morbidity and mortality associated with surgery.
        Hospital choice in purchasing neurological devices seems to depend on capital costs, the local reimbursement environment, market maturity, potential caseload and mix, current equipment available for use in radiosurgery procedures, and issues such as quality control and clinical outcomes. More than 80% of the world's neurosurgery wards have not yet invested in radiation surgery equipment.
        Certain trends have been observed in radiology; for example, gamma-knife centers are reportedly treating a higher percentage of smaller or convoluted benign or infiltrative malignant intracranial tumors and arteriovenous malformations than linac centers. On the other hand, linac centers treat a higher percentage of primary and metastatic brain cancers than gamma-knife centers. Logistical considerations complicate the installation of a gamma knife, such as transportation to the site and on-site loading of highly radioactive cobalt sources. As a result, many facilities would prefer upgraded and dedicated linear accelerator systems.
       Accelerated hypofractionation regimen is also growing in popularity, and is being marketed as a compromise between the numerous fractions used in conventional radiotherapy and the single-dose delivered in radiosurgery. Intensity modulated radiotherapy and brachytherapy will also grow increasingly important in the radiology market.
       Physicians have only just begun to experiment with angioplasty for stroke prevention. Unfortunately, with current angioplasty, pieces of plaque can break off and cause fatalities. Companies need to develop equipment that will allow physicians to perform this procedure without putting patients at any more risk than is necessary.
       Computer-assisted techniques, endoscopic methods, and microsurgical robots will allow surgical removal of neurological tumors to be even less invasive than it is at present. Robotic technologies, electronics, and lasers will have the most impact in stereotactic neurosurgery. Computers are becoming cheaper and more powerful, and neurosurgeons are becoming more interested in minimally invasive techniques. The fact that there is considerable pressure for more cost-effective procedures with lower risk is also driving the market.
       Industry experts suggest that companies in the neurosurgery market seek new clinical indications, develop new products, increase market penetration in existing markets, establish operations in new growth markets, acquire companies with complementary technologies or market infrastructure, and form strategic alliances to obtain specific technologies.
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Diagnostic imaging, an evolving part of modern medicine, is entering a new digital era. What was once called the radiology department is now called the diagnostic imaging department because of the wealth of new technologies available beyond simple x-rays. The revolution in medical imaging is being fueled not only by new imaging technology, but also by advances in computer hardware and software. New systems such as spiral CT or multi-slice CT would not be possible without today's faster processors. Better software algorithms for image analysis and compression make the process more accurate and efficient. Large mass-storage systems such as the optical disk enable the storage of massive amounts of data. Not surprisingly, the growth of diagnostic imaging is an important source of revenue for computer manufacturers such as Compaq and Mercury and for software companies such as ISG Technologies, a Canadian company specializing in imaging software.
        According to a Business Communications Co. study, Medical Imaging: An Evolving Technology, the total market will grow at an average annual growth rate (AAGR) of 5.9% from 1999 to 2004. Valued at just over $4 billion in 1999, diagnostic imaging will generate nearly $5.4 billion by the end of 2005.
       X-ray systems dominate the market in terms of growth and revenue, growing at an AAGR of 7.8% and garnering a 47.7% share. Digital systems, a relatively small fraction of the x-ray systems market, are nonetheless on pace to eventually replace older equipment. These systems alone are experiencing market growth of nearly 23% per year on average. By 2004, x-ray systems will account for 52.1% of the market for diagnostic imaging equipment. Conventional and digital x-ray systems are expected to generate sales of $2.8 billion in 2004, up from $1.9 billion in 1999.
       On the other hand, the markets for CT, ultrasound, and nuclear medicine systems will continue to grow slightly, but are not expected to keep pace. Together, CT and Ultrasound systems will grow at an AAGR of 4.1% through 2004, while systems for nuclear medicine will grow at an average annual rate of only 3.4%. Sales of CT and ultrasound systems are expected to generate $2.1 billion in 2004, up from $1.7 billion in 1999. Revenues from nuclear medicine system are expected to rise from $401.7 million in 1999 to $474.4 million in 2004.
        The diagnostic imaging field has evolved in two complementary ways. On the one hand, new imaging modalities have been introduced, followed by new uses for diagnostic imaging such as interventional radiology and electrophysiology. Equally important, the field is moving from analog to digital image processing. Some of the new modalities such as CT and MRI are inherently digital in nature because of their need for signal processing and electronic data acquisition. Older modalities such as x-ray and ultrasound are entering the digital age, too.
       The impact of this is far reaching. Once an image is in digital form, it can be sent over telephone lines or microwave links to a specialist at a remote location. The radiologist can then view and overlay images from different modalities on his workstation, which can be located in the hospital or at home. He or she may even access the images over the Internet.
       The rooms full of x-ray film will eventually be changed to jukebox systems storing laser disks. In addition to saving space, cost, and resources, the images stored optically in a computer-controlled jukebox cannot be misplaced, like x-ray films can.
       Sales of diagnostic imaging companies were frequent in the 1990s, and the industry has been changing as a result of cost-containment pressures, primarily within managed care and Medicare. This has led to a wider range of systems, including entry-level machines, which provide additional sales opportunities in emerging nations. In addition, many facilities have been emphasizing interventional radiology for less-invasive surgery in an effort to shorten hospital stays.
       The industry has several large multinational companies, but many viable midsized companies compete effectively in one or two types of imaging, often for specialized applications. Startup companies are numerous, especially in the fields of teleradiology and digital x-ray imaging, where there is enormous room for innovation. Opportunities exist not only for new companies in imaging products but also companies writing software for image processing and PACS networks.
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