Cardiac Rhythm Management U.S. Market- Executive Summary

Cardiac Rhythm Management,

Electrophysiology and Ablation Device Market 2013

~ Report Summary ~

Cardiac Rhythm Management, Electrophysiology and Ablation Device Market

In 2012, the U.S. market for cardiac rhythm management (CRM), electrophysiology and ablation devices market was valued at nearly $6.8 billion.

The CRM, electrophysiology and ablation device market includes pacemakers, cardiac resynchronization therapy (CRT) devices, implantable cardioverter defibrillators (ICDs), cardiac stimulation leads, external defibrillators, ablation catheters, diagnostic electrophysiology (EP) catheters, intracardiac ultrasound (ICE) catheters, electrophysiology (EP) stimulators, diagnostic ECG and cardiac monitoring devices. Over the forecast period, the CRM, electrophysiology and ablation device market will be driven by the aging population, rise in cardiac ablation procedures and adoption of advanced CRM devices. However, the aftermath of the economic recession of 2008 and the sluggish U.S. economy that followed have continued to stifle much of the growth in the markets.

Chart 1-1: Cardiac Rhythm Management, Electrophysiology and Ablation Device Market, U.S., 2009 – 2019

Source: iData Research Inc.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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Pacemaker Market

By 2019, dual chamber pacemakers are expected to account for 53.5% of the total pacemaker market.

The market for pacemakers is segmented into single and dual chamber devices. Single chamber pacemakers only pace one chamber of the heart, typically the right ventricle. In contrast, dual chamber pacemakers sense and control the pacing of both the right atrium and the right ventricle. The added clinical benefit is believed to be well worth the higher initial cost of placing a dual chamber pacemaker; however, many patients have been opting for a less expensive single chamber pacemaker implant if offered a choice, due to cost considerations. As the economy recovers, the growth rate over the forecast period for dual chamber devices will outpace that of single chamber devices.

Chart 1-2: Total Pacemaker Market by Segment, U.S., 2012 and 2019


2012

2019

Year

Market Value (US$M)

Segment A Segment B

Implantable Defibrillator Market

The total implantable defibrillator market is expected to grow over $4 billion by 2019.

Implantable defibrillators include implantable cardioverter defibrillators (ICDs) and cardiac resynchronization therapy defibrillators (CRT-Ds). In 2011 a study by the Journal of the American Medical Association suggested that a large number of physicians have not been following the evidence-based guideline for ICD implementations. Following this study, the Department of Justice has been investigating the issue, and this has been one of the main factors in shrinkage of ICD sales, with many physicians, surgeons and hospitals now on the defensive. This investigation into hospital’s ICD implant practices has disrupted the purchasing pattern of the buyers, resulting in overall reductions of the amount of implantable defibrillator devices purchased; however, the market is expected to recover as the life-saving capabilities of ICDs and CRT-Ds have made them a necessity for patients who have survived an episode of SCA or who are at high risk of suffering from one in the future.

Chart 1-3: Total Implantable DefibrillatorMarket by Segment, U.S., 2019


Segment A

Segment B

Cardiac Lead Market

In 2012, number of pacing leads accounted for 70.7% of the total units sold as they are utilized in multiple cardiac rhythm management devices.

Cardiac leads include pacing, defibrillation and left ventricle (LV) leads. The type of lead implanted depends on the CRM device prescribed to a patient. Numerous clinical studies have shown that cardiac resynchronization therapy defibrillators (CRT-Ds) and implantable cardioverter defibrillators (ICDs) cause a significant reduction in death and heart failure. As these devices become more popular, a greater number of cardiac leads, especially defibrillation leads, will be placed. Pacemakers are a much more cost-effective treatment option; however the device can only treat certain types of arrhythmias. Pacing leads are placed in all CRM devices, and the market will grow parallel to the number of CRM devices sold.

Chart 1-4: Percentage of Units Sold by Segment, Cardiac Leads Market, U.S., 2012 (US$M)


Segment A Segment B Segment C

External Defibrillator Market

The exit of Medtronic from the market caused some disruption in the sales of external defibrillators. However, the market is expected to grow at a CAGR of 2.5% over the forecast period.

The economic recession and slow recovery of the U.S. economy which followed had a significant negative impact on the external defibrillator market. The public access segment for automated external defibrillators (AEDs) was particularly affected as businesses, educational institutions and government agencies delayed purchasing AEDs. External defibrillators are the primary method of restoring normal heart rhythm after sudden cardiac arrest (SCA) for patients who do not have ICDs or CRT-Ds. Decreasing the length of time between an SCA event and defibrillation is crucial to improving a patient’s chance of survival and to reducing the likelihood of serious complications. As many businesses are being held responsible for the safety of their patrons, there is increasing pressure to install AEDs in order to avoid liability. Therefore there is an incentive to have automated external defibrillators on hand in as many locations as possible.

Chart 1-5: External Defibrillator Market by Segment, U.S., 2012 (US$M)


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Note: Bubble size represents number of units sold.

Cardiac Ablation Market

In 2012, over 85% of surgical procedures used RF ablation, however cryoablation is expected to increase in popularity by 2019.

Cardiac arrhythmias can be treated by catheter-based ablation with radiofrequency (RF) energy or with cryoablation. This procedure is used for treating various types of arrhythmia, but atrial fibrillation (A-Fib) is considered the most promising target because the condition is relatively common and does not respond well to existing treatments. There has been much research surrounding the treatment of arrhythmia through cardiac ablation, and many firms in this space have been heavily investing in the R&D of new exploratory methods. Recently, the market was boosted by the FDA approval of cryoablation and balloon cryoablation for the treatment of atrial fibrillation. While cryoablation will still be used far less frequently than RF ablation, it is expected that the number of cryoablation procedures performed will increase much faster than the number of RF procedures. Due to recent FDA approval of the Arctic Front® Cardiac CryoAblation Catheter, Medtronic was able to capture market share within the cryoablation segment and will be establishing a strong foothold against competitors due to its first mover advantage.

Chart 1-6: Procedure Volume Growth Rate by Segment,Cardiac Ablation Market, U.S., 2009 - 2019


2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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Diagnostic Electrophysiology Device Market

Steerable electrophysiology catheters are expected to represent nearly 58% of the market for diagnostic electrophysiology catheters by 2019.

The market for diagnostic electrophysiology (EP) devices includes EP stimulators, diagnostic EP catheters and intracardiac echocardiography (ICE) catheters. This market is expected to grow due to the increasing use of premium-priced catheters that have mapping or ultrasound capabilities, as well as the rising number of cardiac ablation procedures. Steerable catheters have more maneuverability and can be used in conjunction with robotic or magnetic steering. These catheters also represent a greater proportion of the total diagnostic EP device market as compared with to fixed curve catheters. Over the forecast period, the decline of fixed curve catheters is expected to stabilize due to their lower price and suitability for certain EP and cardiac ablation procedures.

Chart 1-7: Total Diagnostic ElectrophysiologyDevice Market by Segment, U.S., 2019


Segment B

Segment A

Electrocardiograph and Cardiac Monitoring Device Market

The total electrocardiograph (ECG) and cardiac monitoring device market is expected to experience strong growth, led by both the office- based and hospital stress testing markets.

Electrocardiograph (ECG) and cardiac monitoring devices are used for diagnosing and monitoring arrhythmia. The market for cardiac monitoring devices includes resting ECG devices, stress testing systems, Holter monitors, event monitoring and ECG data management systems (ECG DMS). Hospital budget constraints have caused delays in the purchase of capital equipment. Reimbursement cuts for diagnostic cardiac monitoring procedures such as stress testing, Holter and event monitoring have limited market growth. The markets for Holter monitoring and resting ECG devices are expected to experience minimal increases as unit growth is offset by declining prices.

Chart 1-8: Segment A, Unit Growth Rate, Electrocardiographand Cardiac Monitoring Device Market, U.S., 2009 – 2019


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Competitive Analysis

In 2012, Medtronic was the leading competitor in the U.S. market for cardiac rhythm management, electrophysiology and ablation devices.

Medtronic dominated the pacemaker, implantable cardioverter defibrillator (ICD) and cardiac resynchronization therapy (CRT) market segments in 2012. They also made considerable gains in the cardiac ablation market. Biosense Webster was the market leader in the cardiac ablation and diagnostic electrophysiology markets. Philips Healthcare had a strong presence in the external defibrillator market and nearly all segments of the cardiac monitoring market.

Other competitors of note in the cardiac rhythm management, electrophysiology and ablation device market included Bard Electrophysiology, Boston Scientific, Cardiac Science, GE Healthcare, St. Jude Medical, and Zoll Medical. In-depth competitive analysis by segment can be found in the main chapters of this report.

Chart 1-9: Leading Competitors, Cardiac Rhythm Management,Electrophysiology and Ablation Market, U.S., 2012


Medtronic

Others

Health & Medicine

Cardiac Rhythm Management U.S. Market- Executive Summary