The total U.S. nuclear medicine market expanded 42% between 1999 and 2000, due mainly to the explosive growth of dedicated PET, according to a report by analysts at market research firm Frost & Sullivan of San Jose, CA.
The PET and gamma camera markets were evaluated within the U.S. only, using 2000 as the base year, report authors Monali Patel and Zareen Mallik said at a teleconference August 1. The major competitors offering dedicated PET are ADAC, CTI, GE, Marconi, Positron, and Siemens. Companies offering gamma cameras include ADAC, Digirad, GE, Marconi, Siemens, and Toshiba.
Although F&S wouldn't give exact market shares, they said GE Medical Systems owns about a third of the total U.S. nuclear medicine market (defined as PET systems and gamma cameras), while ADAC, CTI, and Siemens each hold between 15% and 20%.
F&S declined to go into much detail on market specifics, referring to the written report, which they said contains additional data on installed base forecast and analysis, detailed procedure volume and procedure type data, and annual market forecasts from 2000 to 2007. It also includes historical data, market challenges and strategy, equipment utilization trends, demand, pricing and technology analysis, and end-user study data.
Favorable reimbursement has been the biggest force by far driving PET's high growth rate, the analysts said. However, as with any market dependent upon reimbursement, future decisions by the Centers for Medicare and Medicaid Services (CMS, formerly HCFA) may not be so generous, and therefore success will be very dependent on the marketing abilities of manufacturers.
Reimbursement now represents the primary restraint on the growth of the gamma camera market. Unless the recent reimbursement decisions by CMS are eventually resolved to some extent in favor of gamma cameras, F&S believes the outlook for this particular segment is not optimistic. They expect that almost 55% to 60% of total reimbursement to nuclear medicine could be wiped out in the near future.
A fallout of the reimbursement issue is the ongoing turf wars between major gamma camera players, the analysts said. There is limited room for further consolidation, and the barriers to entry are higher than ever. Market concentration of the top players -- GE, Siemens, Philips/ADAC, and Marconi -- has reached nearly 80%, according to the report.
Although dedicated PET has a history spanning some 25 years, F&S said the market more closely resembles that of an emerging technology. The U.S. PET market earned approximately $200 million in 2000, with expectations that revenues will reach nearly $900 million by the year 2007, and will likely hit $1 billion before the end of the decade, the analysts predicted.
The availability of the most common PET radiopharmaceutical, FDG, is also assisting market growth, with a growing number of FDG pharmacies and distribution centers.
The report shows a dedicated PET market that is growing rapidly, the analysts said. Dedicated PET is used most commonly within community and academic hospitals, which account for the largest end-user group, but it has also established a solid and rapidly growing base within freestanding imaging and freestanding PET centers. Exact numbers were not given.
In the short term, F&S believes mobile PET service has the potential to drive PET sales, but growth in this area is expected to slow as a greater number of community hospitals are beginning to offer their own PET services.
CT/PET and the new lutetium oxyorthosilicate (LSO) and gadolinium oxyorthosilicate (GSO) crystal detector materials, which cut scanning times in half, should boost sales, according to the analysts. The two technology trends will most significantly impact academic hospitals in the short term, given the higher price tags and volume requirements for the new technology.
There are 5,700 sites in the U.S., including both hospital and nonhospital facilities, that account for the installed base of over 12,000 gamma cameras, according to F&S. Market penetration levels and total market size for this modality are also near their potential saturation levels. The gamma camera market is, therefore, definitely a mature market. This means that while the market is growing, it is doing so at a very stable and consistent rate of about 3%-4% per year.
In terms of revenue, the U.S. gamma camera market earned about $307 million in 2000. Given current growth rates, total annual sales of around $425 million are expected by the year 2007.
Over 50% of the 15.5 million nuclear medicine procedures performed annually are cardiac procedures, the report said. Gamma camera sites are migrating in increasing numbers from the traditional hospital setting to freestanding imaging centers. Only 70% of gamma cameras remain at in-hospital locations, and this number is expected to fall further.
The most radical new nuclear medicine development is the introduction of solid-state digital gamma cameras. At present, only one manufacturer, Digirad, is marketing a solid-state product, but all the major players are believed to be working on some version of the solid-state camera. These systems, however, are likely to be even more expensive, and it remains to be seen if reimbursement rates can justify the high R&D investment in this technology.
Frost & Sullivan's analysts don't believe that PET's installed base will overtake that of SPECT, but PET may lead in revenue or procedure volume. There are about 12,000 gamma cameras in place. The number of installed dedicated PET scanners was not given.
By Robert BruceAuntMinnie.com staff writer
August 7, 2001
Related Reading
Strong growth expected for PET, gamma camera markets, July 16, 2001
Nuclear medicine rides wave of good news as SNM show opens, June 25, 2001
U.S. approves PET for re-staging breast cancer, June 20, 2001
HHS officials change name, structure of Medicare agency, June 15, 2001
SNM says HCFA understates PET's value in breast imaging, June 8, 2001
Medicare coverage of PET imaging for breast cancer to be challenged, June 8, 2001
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