This is marketing research on the surgical instruments industry and can include information on the background, market structure, definitions, competitors, trends and developments of surgical instruments and is related to other topics such as devices, surgery, medicine and health.

Table of Contents

1 Background 
2 Market Structure 
3 Industry Definitions 
4 Market Metrics 
5 Industry Players 
6 Recent Trends and Developments 
7 Sources

Background

Advances in surgical techniques started with the use of anesthesia in surgery. The technological advances have replaced open or minimally invasive surgeries by minimally invasive surgeries. A change in surgical instruments over the last 10 years has led to new development of surgical techniques. The surgical instrument market is regulated for product performance, quality and safety, and manufacturing processes. The standards are stringent and progress in harmonization are lowering trade and marketing barriers. Products include Forceps, Retractors, Explorers, Bone cutting forceps and rongeurs, Scalpels and knives, Scissors, Chisels, gouges and bone curettes and Mallets. Surgical Instruments also include energy-based instruments, powered instruments, open surgery instruments, closure devices, MIS (minimally invasive surgery) instruments, and suction/irrigation devices.

Market Structure

The market for surgical instruments is highly competitive, price sensitive and characterized by technological advances. The channel of distribution for surgical instruments is distributors mainly or the products are directly supplied to wholesalers and also to hospitals, private practices and laboratories. Major consumers of industry output in order of market size include foreign consumers, the federal government, medical and health services, doctors and dentists, hospitals, individual consumers, and drug companies.

Surgical instrument business is technology oriented business. Barriers to entry include huge start-up costs to cover research and product development. Furthermore, acute technical expertise typically is needed to develop proprietary knowledge necessary to differentiate products from others in the marketplace and to obtain approvals and patents. Food and Drug Administration (FDA) is the main regulatory body governing this industry. The FDA is responsible for insuring that all products sold in the industry comply with federal safety standards. The FDA possesses the authority to recall products, temporarily suspend devices it deems high-risk, and impose monetary penalties for violations. The 1990 Safe Medical Devices Act (SMDA), which defined procedures for bringing medical products to the market, is one of the most significant pieces of legislation governing producers.

Manufacturers and suppliers are a mix of large multinational corporations, large, mid-size and small manufacturers, the majority of which are located in North America, Western Europe (Germany) and Pakistan. The surgical instrumentation market was valued at approximately $3.78 billion in 2002 and it is growing at a rate of three percent. The market has been segmented as powered instruments which includes devices such as surgical lasers, cutting instruments, and electrosurgery devices, and non-powered devices, including scalpels, scissors, and closure devices, such as sutures and staples. The number of surgical procedures performed in the United States is increasing, reflecting demographic trends, such as the aging population, and technological advancements that have resulted in safer and less invasive surgical procedures.

Powered Instruments Market

The surgical laser market contributes roughly 47 percent of the total powered surgical instruments market. Powered surgical instruments are used to perform orthopedic, cranial, ENT, and spinal procedures. The electrosurgery market has been growing at a rate of seven percent and is estimated to exceed $280 million in 2002. Disposables used in electrosurgery procedures are the major revenue generator for the market participants and are responsible for more than 85 percent of the market's revenues. The Ultracision Harmonic Scalpel marketed by Ethicon, a division of Johnson and Johnson, enjoys monopoly and offers several advantages over electrosurgery. The scalpel uses the power of ultrasound technology and allows surgeons to make incisions with minimal tissue damage and minimal risk to the patient.

Non-Powered Surgical Instruments Market

The non-powered surgical instruments market has grown to nearly one billion dollar market. The market consists of scalpels/blades, scissors, and dilators, cannulae, and trocars.

Wound Closure Devices

The wound closure market is broken down into sutures, staplers, ligating clip appliers, and wound closure strips. The total market was estimated at $1.34 billion in 2002. There has been a shift within the sutures market from non-absorbable to absorbable sutures. Within the absorbable sutures market, synthetic absorbable sutures have been gaining market share as they are more reliable and have a more uniform absorption than gut absorbable sutures. Staples have been proven to be a cost effective method for closing wounds for certain operations. Ligating clip appliers are one of the new devices that have helped to revolutionize the wound closure device industry. Clips are often used to temporarily close areas during surgery before permanent wound closure devices are inserted. The surgical instrumentation markets continues to evolve to provide instruments that can be used with new technologies such as image guided and robot-assisted surgery systems.

Industry Definitions

• Instruments - devices or appliance for use in operative surgery upon the body or in preparation for operative surgery, together with devices designed to assist in operative surgery.

• Medical Equipment Industry Definition - includes surgical and medical instruments, orthopedic, prosthetic and surgical appliances and supplies; dental equipment and supplies; x-ray apparatus, tubes and related irradiation apparatus; electro-medical and electro-therapy apparatus; and ophthalmic equipment.

• Surgical and Medical Instrument Manufacturing - This U.S. industry comprises establishments primarily engaged in manufacturing medical, surgical, ophthalmic, and veterinary instruments and apparatus (except electrotherapeutic, electromedical and irradiation apparatus). Examples of products made by these establishments are syringes, hypodermic needles, anesthesia apparatus, blood transfusion equipment, catheters, surgical clamps, and medical thermometers.

• Standardization - Activity of establishing, with regard to actual or potential problems, provisions for common and repeated use, aimed at the achievement of the optimum degree of order in a given context.

• ISO/TC 170 - sets standards for non-active medical devices which are used during operation such as forceps, scissors, scalpels and retractors. The range of products comprises a range from highly sophisticated complete systems (such as minimally invasive systems), down to ‘simple’ products (such as a scalpel), components or materials (such as stainless steel).

Market Metrics

The United States is world leader in medical device technology and maintained an principal role in medical and dental instruments and supplies. More than 21,000 companies employing well over 100,000 people are licensed to produce medical devices in the United States. Japan has the second largest market for medical devices in the world but it was hard to enter because of protectionist barriers.

The value of shipments of surgical and medical instrument manufacturers totaled approximately $23.7 billion in 2004, up from approximately $21.77 billion in 2000, according to the U.S. Census Bureau's Annual Survey of Manufactures. Among the largest growth sectors in this industry in the United States were wound-care and cardiovascular products.

As seen in the table below, Surgical and medical instruments constitute a huge percentage of medical device industry.

Value of Shipments by Sector (Medical device industry), 2004

Imports

U.S. imports in surgical and medical instruments and supplies subsector (NAICS 339112/3) were $12 billion in 2004, which is more than half of total import of total medical equipment products. This is in price-sensitive lower-technology products where substitution for imported products is easier than in high-tech medical device industry. In 2004, top five countries contributing highest percentage of U.S. imports of surgical instruments were: Ireland, Mexico, Germany, Costa Rica, and Dominican Rep.

Exports

Total exports for 2004 for medical device sector were $ 20.7 billion. Surgical and medical equipment and supplies is the largest category at $11.84 billion in 2004. Leading export markets in 2005 were Netherlands, Japan, Mexico, Canada and Belgium.

Surgical & Medical Instruments for all countries

Surgical & Medical Instruments for all countries

Industry Players

One of the largest manufacturers of surgical and medical instruments and apparatus is Baxter International Inc. and its subsidiary, Baxter Healthcare Corp. The industry giant had $10.8 billion in sales in 2006.

• Siemens Medical Solutions of New Jersey, a subsidiary of Siemens in Germany, employed some 4,500 people in the United States during 2000 and 2001 and had worldwide sales of $8.3 billion, with sales in the United States accounting for 52 percent of that figure.

• Becton, Dickinson and Company (BD), a medical technology company, engages in the manufacture and sale of medical supplies, devices, laboratory equipment, and diagnostic products worldwide. It operates through three segments: Medical, Diagnostics, and Biosciences. The Medical segment offers an array of medical devices, including needles, syringes, and catheters for medication delivery; syringes and pen needles for the self-injection of insulin and other drugs used in the treatment of diabetes.

• Alcon, Inc. engages in the development, manufacture, and marketing of pharmaceuticals, surgical equipment and devices, and consumer eye care products to treat eye diseases and disorders.

• Boston Scientific Corporation engages in the development, manufacture, and marketing of medical devices that are used in interventional medical specialties worldwide.

• United States Surgical Corporation (USSC) is a unit of Covidien (formerly Tyco Healthcare), is a leading maker of surgical stapling products and laparoscopic surgery instruments. Products include single-use and reusable surgical staplers, staples, sutures, and devices for laparoscopic surgery (a minimally invasive surgical technique).

• Intuitive Surgical, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of da Vinci surgical systems for use in urologic, cardiothoracic, gynecologic, and general surgeries. Its surgical systems consist of a surgeon's console, a patient-side cart, a vision system, and wristed instruments.

Integra LifeSciences Holdings Corporation engages in the development, manufacture, and marketing of surgical implants and medical instruments used primarily in neurosurgery, extremity reconstruction, orthopedics, and general surgery. The company offers its products in two categories, such as neurosurgical and orthopedic implants, and medical surgical equipment.

Despite the dominance of a few very large competitors such as Baxter and Siemens, the industry is diversified. Revenues are spread among many niche firms that have developed proprietary products or production techniques, or excel at marketing or distribution.

Market Capitalization in USD $Billions*

- Siemens is a global business with many businesses, it's overall market cap is $126 Billion, but of course, the surgical instrument group is just a piece of this and cannot be broken out as a market cap.

Market Share based on annual sales 2006 in USD $Billions

Recent Trends and Developments

Products utilizing these new hybrid technologies that incorporated pharmaceutical products with traditional device properties, or "hybrids included coated stents and impregnated dressings. New products in the wound-care sector incorporate antimicrobial agents and growth hormones that not only protect the wound, but actively aid in the healing process. New fibrin sealants were also developed as an alternative to traditional wound-care and closure products. The surgical instrument industry as a whole is quite mature. Sectors like urinary catheters, suction tubing, and conventional gauze dressings have utilized advanced technology in manufacturing and have reached the full potential of their application. Due to these factors, the emphasis will continue toward reducing costs. Laser micromachining for manufacturing needles, stents, and catheters has seen recent advances due to more advanced lasers and techniques that have led to the miniaturization and accuracy of medical devices.

Sources

Most current U.S. government sources

Company websites