Kalorama Information Report - Global Market for Medical Devices

The Global Market for
Medical Deviceshttp://www.kaloramainformation.com/Global-Medical-Devices-8186981/
The fifth edition of Kalorama Information’s Global
Market for Medical Devices presents an industry
adjusting to challenges of reimbursement
reductions and new taxes. New product
innovations and mergers were part of the
strategies companies adapted in order to
compete. In the United States, the second year of
collections on the medical device tax began, and
the report describes the impact.
In Europe as well as the United States, reimbursement challenges and the threat
of new legislation loom. Emerging markets again helped to boost revenues
elsewhere, but even some emerging nations saw growth rate reductions. Device
manufacturers responded by boosting innovation and technology, finding new
markets, and buying each other.
As part of the market analysis in this report, the following is included:
 Size and Forecast of the World Market for Medical Devices
 Index of 15 Important Medical Device Players: Performance 2012-2013, International Sales Focus,
R&D Spending
 Regional Breakouts for US, Europe, Asia and Rest of World Regions
 Segment Markets (Catheters, GI, Orthopedic, MIS, Dialysis, Patient Monitoring, MRI, Ultrasound, X-
Ray, Medical Beds, IOLs, Infusion Pumps, Stents, Respiratory, Point of Care Testing Devices, Other)
 Country Markets for US, UK, Australia, Brazil, Japan, Germany, China, Italy, France
 36 Profiles of Key Medical Device Companies
 Mergers and Acquisitions in the Device Market
 New Product Launches, 2013
 Impact of US Medical Device Taxes
 Company Market Share

Kalorama Information considers estimates of manufacturer revenues the most important and valid
methodology for business planning. In many of the largest device markets, Kalorama Information has already
conducted studies and has examined manufacturer revenue estimates, rendering the total market visible.
This report was assembled using data from Kalorama Information's previous medical device reports. Primary
and secondary research was used. Research into company annual reports, trade publications, government and
medical literature was used as a foundation. Interviews with executives at medical device companies were
conducted and are the key source of estimates.
http://www.kaloramainformation.com/Global-Medical-Devices-8186981/

Global Market for Medical Devices, 5th Ed.
5th

Copyright © 2014 Kalorama Information, LLC.
Reproduction without prior written permission, in any media now in existence or hereafter developed,
in whole or in any part, is strictly prohibited.
THE GLOBAL MARKET FOR MEDICAL
DEVICES, 5TH
EDITION
A KALORAMA INFORMATION MARKET INTELLIGENCE REPORT
The Global Market for Medical Devices has been prepared by Kalorama Information. We
serve business and industrial clients worldwide with a complete line of information services and
research publications. Kalorama Information Market Intelligence Reports are specifically
designed to aid the action-oriented executive by providing a thorough presentation of essential
data and concise analysis.
www.kaloramainformation.com

T A B L E O F C O N T E N T S
CHAPTER ONE: EXECUTIVE SUMMARY.........................................................................................1
Top Companies........................................................................................................................................2
Mergers and Acquisitions.......................................................................................................................4
Medical Device Tax.................................................................................................................................4
Scope and Methodology..........................................................................................................................6
Conclusions..............................................................................................................................................6
CHAPTER TWO: INTRODUCTION......................................................................................................8
Definition .................................................................................................................................................8
Regulation in the US ...............................................................................................................................8
Classification of Medical Devices ........................................................................................................8
510(k) Process.....................................................................................................................................12
Regulation in the European Union......................................................................................................13
Regulation in Japan ..............................................................................................................................15
Regulation in China ..............................................................................................................................16
Trends in World Demographics ..........................................................................................................17
Global Aging Population ......................................................................................................................19
Group Purchasing Organizations........................................................................................................20
Unique Device Identifier (UDI)............................................................................................................22
UDI Rule and GUDID Guidance........................................................................................................23
Healthcare Reform and Taxes.............................................................................................................26
Expedited Access Premarket Approval ..............................................................................................27
Hospital Market Update.......................................................................................................................28
A Look at Representative Hospital Chains.........................................................................................29
Medical Device Tax...............................................................................................................................33
CHAPTER THREE: MERGERS AND ACQUISITIONS ...................................................................35
Significant Device Industry M&As .....................................................................................................35
Zimmer-Biomet...................................................................................................................................35
Boston Scientific.................................................................................................................................35
Stryker Makes Several Buys...............................................................................................................36

CareFusion..........................................................................................................................................36
Thermo Fisher and Life ......................................................................................................................37
J&J Sells Clinical Diagnostics............................................................................................................37
Medtronic............................................................................................................................................37
CHAPTER FOUR: SPECIFIC DEVICE MARKETS ..........................................................................42
Market Size, Specific Medical Devices................................................................................................42
Catheters................................................................................................................................................45
Gastrointestinal Devices .......................................................................................................................45
Orthopedics ...........................................................................................................................................46
Minimally Invasive Surgery.................................................................................................................47
Patient Monitoring................................................................................................................................48
Dialysis ...................................................................................................................................................48
MRI ........................................................................................................................................................49
Ultrasound .............................................................................................................................................50
Medical Beds..........................................................................................................................................51
X-Ray Markets......................................................................................................................................52
Intraocular Lens Devices......................................................................................................................53
Infusion Pumps......................................................................................................................................53
Point Of Care Tests...............................................................................................................................54
Stents......................................................................................................................................................55
Respiratory Devices ..............................................................................................................................56
CHAPTER FIVE: BELLWETHER COMPANIES ..............................................................................57
Revenue Performance – 15 Bellwether Companies ...........................................................................58
US versus International sales...............................................................................................................60
Investment in Research and Development..........................................................................................61
CHAPTER SIX: MARKET ANALYSIS................................................................................................63
Size and Growth....................................................................................................................................63
Market by Region .................................................................................................................................64
Market by Country...............................................................................................................................69
Revenues of Top Companies................................................................................................................70
CHAPTER SEVEN: COMPANY PROFILES.......................................................................................73
Johnson & Johnson...............................................................................................................................73
GE Healthcare.......................................................................................................................................75

Siemens Healthcare...............................................................................................................................77
Company Overview ............................................................................................................................77
Product Launches................................................................................................................................77
Medtronic...............................................................................................................................................79
Acquisitions ........................................................................................................................................80
Baxter International .............................................................................................................................81
Acquisitions ........................................................................................................................................82
Philips Healthcare.................................................................................................................................83
Cook Medical.........................................................................................................................................84
Covidien .................................................................................................................................................86
Acquisitions ........................................................................................................................................87
Becton Dickinson &Co. ........................................................................................................................88
B. Braun.................................................................................................................................................90
St. Jude Medical....................................................................................................................................91
Acquisitions ........................................................................................................................................92
Mindray Medical...................................................................................................................................93

Hill-Rom.................................................................................................................................................94
Acquisitions ........................................................................................................................................95
3M Healthcare.......................................................................................................................................96
Acquisitions ........................................................................................................................................97
Toshiba Medical Systems .....................................................................................................................98
Acquisitions ........................................................................................................................................99
Smith &Nephew, Plc...........................................................................................................................100
Company Overview ..........................................................................................................................100
Acquisitions ......................................................................................................................................101
Product Launches..............................................................................................................................101
Hospira.................................................................................................................................................102
Acquisitions ......................................................................................................................................103
Fresenius Medical ...............................................................................................................................104
Boston Scientific..................................................................................................................................105
CR Bard...............................................................................................................................................107
Stryker Corporation ...........................................................................................................................109
Acquisitions ......................................................................................................................................109
CareFusion...........................................................................................................................................112
Acquisition........................................................................................................................................112

Thermo Fisher Scientific Inc..............................................................................................................114
Acquisition........................................................................................................................................115
Terumo Corporation ..........................................................................................................................116
Cardinal Health...................................................................................................................................117
Acquisitions ......................................................................................................................................117
Biomet ..................................................................................................................................................118
Acquisition........................................................................................................................................119
Dentsply ...............................................................................................................................................120
Coloplast ..............................................................................................................................................122
Paul Hartmann AG.............................................................................................................................124
Teleflex Inc. .........................................................................................................................................126
Acquisitions ......................................................................................................................................127
Haemonetics.........................................................................................................................................128
Acquisitions ......................................................................................................................................129
Zimmer.................................................................................................................................................130
Acquisitions ......................................................................................................................................130

Varian Medical Systems.....................................................................................................................131
Product Launch .................................................................................................................................132
PerkinElmer, Inc.................................................................................................................................133
Nobel Biocare ......................................................................................................................................134
Olympus Medical Systems..................................................................................................................136

L I S T O F E X H I B I T S
CHAPTER ONE: EXECUTIVE SUMMARY.........................................................................................1
Figure 1-1: Global Medical Device Market, 2013-2018.......................................................................2
Figure 1-2: Medical Device Market Share, 2013..................................................................................3
Table 1-1: Medical Device Excise Tax Payment of Selected Industry Leaders, 2013.......................5
TWO: INTRODUCTION ..........................................................................................................................8
Table 2-1: 2013 FDA Device Approvals..............................................................................................11
Table 2-2: World Population, 2010 - 2050 ..........................................................................................18
Table 2-3: Percent Population Over 65, 2010-2050............................................................................19
Table 2-4: GPOs in the United States..................................................................................................21
Figure 2-1: Example of a Simulated Unique Device Identifier (UDI) ..............................................23
Table 2-5: Compliance Dates for UDI Requirements........................................................................25
Figure 2-2: Number of Hospitals in the US, 1975-2011 .....................................................................28
Figure 2-3: HCA Corporation: Revenues, Salary Costs, Bad Debt..................................................29
Figure 2-4: Community Health Hospitals Corporation: Revenues, Salary Costs, Bad Debt.........30
Figure 2-5: Net Income, HCA and Community Health.....................................................................31
Table 2-6: Leading For-Profit U.S. Hospital Chains, 2008 and 2010...............................................32
Table 2-7: Medical Device Excise Tax Payment of Selected Industry Leaders, 2013.....................33
THREE: MERGERS AND ACQUISITIONS........................................................................................35
Table 3-1: Mergers and Acquisitions in the Medical Device Market, 2013-2014............................39
FOUR: SPECIFIC DEVICE MARKETS...............................................................................................42
Figure 4-1: Medical Device Market Share by Category...................................................................43
Table 4-1: Markets for Medical Devices, 2013...................................................................................44
FIVE: BELLWETHER COMPANIES...................................................................................................57
Table 5-1: Revenue Performance, Bellwether Companies, 2013 vs. 2012 .......................................58
Table 5-2: Revenue Performance, Bellwether Companies’ Growth Rates, 2013............................59
Table 5-3: Percent of Sales from US, 2013 and 2012 .........................................................................60
Table 5-4: Research and Development Spending, Bellwether Companies ......................................61
Table 5-5: Research and Development Spending as a Percentage of Revenues,
Bellwether Companies..........................................................................................................................62
SIX: MARKET ANALYSIS ....................................................................................................................63
Figure 6-1: Medical Device Market, 2013-2018 .................................................................................64

Figure 6-2: Medical Device Market by Region, 2013.........................................................................65
Figure 6-3: US Market Forecast, 2013-2018.......................................................................................67
Table 6-1: Significant Country Device Markets (US, UK, Australia, Brazil, Japan, Germany,
China, Italy, France).............................................................................................................................69
Table 6-2: Top Medical Device Company Revenues, FY 2013 .........................................................71
Figure 6-4: Estimated Market Share of Medical Device Market by Competitor ...........................72

C H A P T E R O N E
Executive Summary
The fifth edition of Kalorama Information’s Global Market for Medical Devices finds a
market with tremendous opportunity for a range of device makers, but also a number of
challenges. In the United States, the second year of collections on the medical device tax began.
In Europe as well as the United States, reimbursement challenges and the threat of new
legislation loom. Emerging markets again helped to boost sagging revenues elsewhere, but even
some emerging nations saw declines. Device manufacturers responded by boosting innovation
and technology, finding new markets, and buying each other.
Because of the broad definition, estimates of medical device markets vary as any item
from a nuclear camera or catheter to a latex glove can be considered a medical device. It is a
scattered market in which hundreds of companies worldwide participate. Despite this, not more
than forty companies earn most of the revenue in the market and much of the revenue is earned
in a few key categories.
The medical device market in terms of revenues is not even half as large as the global
pharmaceutical market, though it sees many more transactions. This is due to pricing, as in
volume terms there are more units sold and more patients are impacted by the device market.
Although the largest component of the market is in the United States, the majority of sales are
non-US, and growth is occurring in other markets. Chapter Six of this report breaks down the
overall market by region.

One: Executive Summary
2
Figure 1-1
Global Medical Device Market
TOP COMPANIES
Because of the variety of types of medical devices, there are many competitors. Still
eighteen companies earn most of the global revenue in the device market. Most companies
operate in just a few markets, though the top companies such as J&J, GE Healthcare, Siemens
and Medtronic are multi-billion dollar companies that operate in several categories. There are
thousands of companies making devices in the United States alone, most of these are private
concerns having less than 50 employees. The market share of the top medical device companies
is provided in the following figure.
2013 2014 2015 2016 2017 2018

3
Figure 1-2
Medical Device Market Share, 2013
Major companies are profiled in Chapter Seven of this report. In Chapter Five,
Kalorama has isolated 15 “bellwether” companies based on revenues and also diversity of
medical devices produced. The results of the bellwethers between 2012 and 2013, the
geographic breakout of their sales and their decisions on R&D spending are part of the analysis
for the report’s findings on the market.

4
MERGERS AND ACQUISITIONS
In 2013 and early 2014, key market players were active in acquiring companies, among
these were Boston Scientific, Stryker Corporation, CareFusion, ThermoFisher Scientfic, The
Carlyle Group, and Medtronic. Stryker’s purchase of MAKO Surgical, Zimmer’s purchase of
Biomet and the sale of J&J’s Ortho Clinical Diagnostic Group to the Carlyle Group were among
the larger purchases. Chapter Three of this report focuses on merger activities.
MEDICAL DEVICE TAX
The beginning of 2013 saw the medical device industry make the first payments to the
IRS for the new 2.3% excise tax on all classes of medical devices as part of the 2009 Patient
Protection and Affordable Care Act (referred to in this report as US healthcare reform). Medical
device manufacturers have to date paid an estimated $1 billion to the Internal Revenue Service
for the medical device excise tax, according to the Medical Imaging & Technology Alliance
(MITA), the Advanced Medical Technology Association (AdvaMed) and the Medical Device
Manufacturers Association (MDMA), the tax costing an estimated average of $194 million per
month by device manufacturers in an industry that spends nearly $10 billion in R&D each year.
Net income was broadly impacted in 2013, though the actual amounts vary. Table 1-1
shows the medical device excise tax payment totals of selected industry leaders. Johnson &
Johnson, the largest device company, paid $200 million, which was recorded in selling,
marketing and administrative expenses.

5
Table 1-1
Medical Device Excise Tax Payment of Selected Industry Leaders, 2013
Company Payment
Johnson & Johnson $200 million
Boston Scientific $73 million
Covidien $60 million
Smith & Nephew $24 million
Hill-Rom $12.3 million
Source: Kalorama Information
Clearly, the amount of money being paid is substantial. The initial feeling within the
industry was that this level of taxation would deny manufacturers opportunities to invest in
R&D, to make capital investments, and to increase staffing. The reality of the tax is reflected in
a survey by the Emergo Group, in which 45% of senior managers indicated that the tax has had a
"very" or "somewhat negative" impact on their business in 2013, while 34% indicated that it had
"no impact."
Though the growth of small players in the market is likely hurt by the tax, Kalorama
Information estimates that the tax impact was 20 to 30% less than the projections of industry
commentators and corporate reports.
Bipartisan support for repeal of the tax is building in both the House of Representatives
and the Senate, according to the Medical Imaging & Technology Alliance (MITA). In the House
and Senate, bipartisan majorities support repeal of the device tax. In March, a coalition of 79
Senators reached across the aisle in a vote to adopt an amendment to the Fiscal Year 2014 Senate
Budget Resolution repealing the medical device tax. Reps. Erik Paulsen (R-MN) and Ron Kind

6
(D-WI) introduced in the House the “Protect Medical Innovation Act,” which garnered a
bipartisan response that has increased to 253 co-sponsors.
SCOPE AND METHODOLOGY
There are many estimates of the medical device market as a whole that have been
published using various methodologies; export and import sales, unit estimates and price
averaging, but Kalorama Information considers estimates of manufacturer revenues the most
important and valid methodology for business planning. In many of the largest device markets,
Kalorama Information has already conducted studies and has examined manufacturer revenue
estimates, rendering the total market visible. This report was assembled using data from
Kalorama Information's previous medical device reports. Primary and secondary research was
used. Research into company annual reports, trade publications, government and medical
literature was used as a foundation. Interviews with executives at medical device companies
were conducted and are the key source of estimates.
CONCLUSIONS
The following are the major conclusions of the report:
 The global market for medical devices was billion dollars in 2013. With
average growth, this should grow to $ billion in 2018.
 A majority of companies in Kalorama’s Bellwether index of medical device
companies increased research and developing spending as a percentage of
revenue.
 For most device companies, migration from US sales continues. On a revenue
basis, companies earned of their total revenues from United States customers.
 The average of our device company index was a % increase in non-US sales,
though some companies were well beyond this average.
 The “Rest of World” market (all areas outside of the US, Europe and Asia)
represents % of the world device market. Growth in healthcare spending in

7
countries such as Brazil, Turkey, South Africa, Chile, Mexico and others drove
the market. Expect more device companies to focus on these import-heavy
markets.
 Respiratory Equipment, Catheters, Patient Monitoring and Dental Equipment are
the largest categories of medical devices.
 IOLs, stents, molecular tests, and cosmetic products were the most common
categories of new devices approved last year.

C H A P T E R T W O
Introduction
DEFINITION
Medical devices include any instrument, apparatus, appliance, machine, contrivance,
implant, in-vitro device as well as any accessories or related components that facilitate any or
some of the following functions pertaining to a disease, injury, or condition of handicap:
diagnosis, prevention or monitoring, treatment. The following conditions apply to our definition.
 It should be regulated by a state regulatory authority.
 It should be intended for application in the prevention, diagnosis, and/or cure of
disease or other conditions such as an injury or a handicap.
 It should not achieve any of the above intended applications by chemical action
and/or metabolism activity within or on the body.
REGULATION IN THE US
Classification of Medical Devices
Medical devices are typically classified into three classes based on the risk associated
with them. This classification was originally provided by the US Food and Drug Administration
(US FDA), and similar classifications are followed by major Asian countries such as Japan and
China.
These classifications signify the level of control required to ensure the safety and
effectiveness of the device. Consequently, manufacturers of the different classes need to adhere

Two: Introduction
9
to different levels of regulations and norms, i.e., stringent regulations for higher class of medical
devices:
Class I: This class includes medical devices that pose minimum risk to a patient and are
simpler in design as compared to Class II and Class III medical devices. Class I devices are
classified in the ‘general controls’ category, as specified by the US FDA, and include devices
such as tongue depressors, bedpans, elastic bandages, examination gloves, hand-held surgical
instruments and X-ray film. The manufacturing and distribution of medical device products in
this class generally requires:
Class II: According to the US FDA, Class III devices are subject to ‘special controls’ in
addition to ‘general controls’. These devices require a higher level of safety assurance in terms of
potential injury or other harm to the patient. Devices in this class include X-ray machines,
powered wheelchairs, infusion pumps, surgical drapes and ultrasonic diagnostic devices. In
addition to Class I requirements, the manufacturing and distribution of medical device products
in this class generally entails the following:
 Special labeling requirements
 Compliance with performance standards
 Post-market surveillance
 Pre-market approval may be required
Class III: Devices in this class require the highest level of safety and effectiveness
assurance as the potential threat to the patient is highest in their case. Information availability
regarding the safety aspect of these devices is generally limited as compared to Class I and Class
II devices; and these, therefore, require additional safety measures after ‘general controls’ and
‘special controls’. Medical devices in this category include life-supporting or life-sustaining
devices, such as replacement heart valves, implanted cerebellar stimulators, implantable
pacemaker pulse generators, endosseous (intra-bone) implants, etc. In addition to Class I and
Class II requirements, the manufacture and supply of these devices entails the following:
 A scientific review to ensure the safety and effectiveness of a device
 Pre-market approval (mandatory)
In some countries, a device-tracking system to maintain and update information about the
recipients of the device is necessary for certain Class III devices such as implantable
pacemakers.

Two: Introduction
10
In the United States, the Food and Drug Administration (FDA) requires manufacturers of
clinical devices that may have a negative consequence on the patients’ health with improper use
to prove both the device is safe and it is effective prior to sale. However, some policymakers and
device manufacturers have labeled U.S. device regulation as slow, risk-averse, and expensive.
FDA's Center for Devices and Radiological Health (CDRH) is responsible for regulating firms
who manufacture, repackage, relabel, and/or import medical devices sold in the United States.
In addition, CDRH regulates radiation-emitting electronic products (medical and non-
medical) such as lasers, x-ray systems, ultrasound equipment, microwave ovens and color
televisions. Manufacturers (both domestic and foreign) and initial distributors (importers) of
medical devices must register their establishments with the FDA. All establishment registrations
must be submitted electronically unless a waiver has been granted by FDA. All registration
information must be verified annually between October 1st and December 31st of each year. In
addition to registration, foreign manufacturers must also designate a U.S. Agent.
Most class I devices, such as blood pressure monitors are low level-risk and subject only
to “general controls,” Class II devices meet general controls as well as “special controls,” such as
additional labeling requirements. These moderate-risk devices generally pass through the 510(k)
review pathway, which refers to the section of the Food, Drug, and Cosmetic Act dealing with
premarket notification. In this process, the FDA and the manufacturer rely on similarities
between the device at issue and a previously cleared device.
Products requiring PMAs are Class III devices are high risk devices that pose a
significant risk of illness or injury, or devices found not substantially equivalent to Class I and II
predicate through the 510(k) process. The PMA process is more involved and includes the
submission of clinical data to support claims made for the device. An investigational device
exemption (IDE) allows the investigational device to be used in a clinical study in order to
collect safety and effectiveness data required to support a Premarket Approval (PMA)
application or a Premarket Notification 510(k) submission to FDA. Clinical studies with devices
of significant risk must be approved by FDA and by an Institutional Review Board (IRB) before
the study can begin. Studies with devices of nonsignificant risk must be approved by the IRB
only before the study can begin.
The following table provides information on recent FDA device approvals. Stents, IOLs
and molecular testing were among the larger categories of newly approved devices.

Two: Introduction
11
Table 2-1
2013 FDA Device Approvals
Device Name Category Date
Therapy™ Cool Flex™ Ablation Catheter and IBI 1500T9-CP
v.1.7 Cardiac Ablation Generator - P110016/S0081 Catheter 12/18/2013
GORE® VIABAHN® Endoprosthesis, GORE® VIABAHN®
Endoprosthesis with Heparin BioActive Surface - P1300062 Stent 12/5/2013
RNS® System - P1000263 Epilepsy 11/14/2013
MitraClip Clip Delivery System – P1000094 Heart Valve Device 10/24/2013
Juvéderm Voluma XC - P1100335 Implant 10/22/2013
Nidek EC-5000 Excimer Laser System - P970053/S0116 LASIK 9/30/2013
Wavelight ALLEGRETTO WAVE® Eye-Q Excimer Laser -
P020050/S0127 LASIK 9/27/2013
DIAMONDBACK 360® Coronary Orbital Atherectomy System
- P1300058 Stent Delivery System 10/21/2013
Liposorber® LA-15 System - H1200059 Blood Processing 10/10/2013
MiniMed 530G System - P12001010
Glucose Monitor/Insulin
Delivery 9/26/2013
Complete® SE Vascular Stent System - P11004011 Stent 9/19/2013
GORE TAG Thoracic Endoprosthesis - P040043/S05112 Endovascular Stent Graft 9/10/2013
Mobi-C® Cervical Disc Prosthesis (two-level) - P11000913 Cervical Disc Prosthesis 8/23/2013
Parascript® AccuDetect® 6.1.0 - P12000414
Computer-Aided Detection
(CAD) Software 8/22/2013
Nit-Occlud® PDA - P12000915 Occluder 8/16/2013
Mobi-C® Cervical Disc Prosthesis – P11000216 Cervical Disc Prosthesis 8/7/2013
therascreen® EGFR RGQ PCR Kit - P12002217 Molecular Assay 7/12/2013
Abbott RealTime HCV Genotype II; Abbott RealTime HCV
Genotype II Control Kit; and Uracil-N-Glycosylase (UNG) -
P12001218 Lab Test 6/20/2013
MemoryShape Breast Implants - P06002819 Breast Implant 6/14/2013
THxID™ -BRAF Kit for use on the ABI 7500 Fast Dx Real-
Time PCR Instrument - P12001420 Molecular Assay 5/29/2013
Trulign Toric Posterior Chamber Intraocular Lens and Trulign
Toric IOL Calculator - P030002/S02721 Intraocular Lens (IOL) 5/20/2013
Selenia Dimensions 3D System - P080003/S00122 Mammography Device 5/16/2013
cobas® EGFR Mutation Test - P12001923 Lab Test 5/14/2013
SEDASYS® Computer-Assisted Personalized Sedation System
- P08000924 Sedation 5/3/2013

Two: Introduction
28
0
1000
2000
3000
4000
5000
6000
7000
8000
1975 1980 1990 1995 2000 2007 2011
7156 6965
6649
6291
5810 5708 5724
HOSPITAL MARKET UPDATE
Community hospitals include nonfederal, short-term general, state specialty hospitals.
Excluded are hospitals not accessible by the general public such as prison hospitals or college
infirmaries.
Large US-based hospitals benefit from economies of scale. They have lower costs per
patient or per procedure because of volume discounts in purchases and other similar factors.
Therefore, it has been observed that many hospitals have been merging to form a bigger group.
Merged hospitals often find it easier to borrow money and make greater profits because of
decreased competition.
Figure 2-2:
Number of Hospitals in the US, 1975-2011

Five: Bellwether Companies
60
US VERSUS INTERNATIONAL SALES
For the past few years bellwether companies have seen a decline in US sales as they
focus on international markets, especially the emerging BRIC nations. 2012 represented a slight
stay of this trend as the US economy rebounded slightly and European nations began unusually
large healthcare cuts that impacted the industry. 2013 demonstrated that this is a longstanding
trend; US markets declined and most companies continued to seek outside the US markets.
Table 5-3
Percent of Sales from US, 2013 and 2012
2013 2012
Johnson and Johnson
GE Healthcare
Medtronic
Philips
Boston Scientific
Becton Dickinson
Stryker
St. Jude Medical
B. Braun
Siemens
Hill-Rom
Smith and Nephew
Covidien
CareFusion
Fresenius Medical
On a revenue basis, companies earned of their total revenues % US vs. US) from
United States customers.

Five: Bellwether Companies
62
Table 5-5
Research and Development Spending as a Percentage of Revenues,
Bellwether Companies
2013 2012
Johnson and Johnson
GE Healthcare
Medtronic
Philips
Boston Scientific
Becton Dickinson
Stryker
St. Jude Medical
B. Braun
Siemens
Hill-Rom 4.1 4.0
Smith and Nephew 5.3 4.2
Covidien 1.9 1.7
CareFusion 4.8 4.5
*

Seven: Company Profiles
116
TERUMO CORPORATION
Location: Shibuya, Tokyo, Japan
Website: www.terumo.com
Revenues 2013:
Revenues 2012:
($ billions)
Company Overview
Terumo Corporation is a Japanese company founded in 1921 to design and make superior
thermometers. Terumo today is broadly engaged in the manufacture and sales of medical
products and equipment, its product lines including pharmaceuticals, nutritional food
supplement, blood bags, disposable medical devices, cardiovascular systems, vascular grafts,
peritoneal dialysis, blood glucose monitoring system, and medical electronic and digital
thermometers. In addition to Japan, the company has established subsidiaries in numerous
regions, including the US, India, China, and many European countries.
The company’s revenues were approximately billion in 2013, an increase of 4%
over 2012. In the cardiac & vascular segment, net sales increased by 5.7%; in the blood
management segment, net sales increased by 4.1%; in the general hospital segment, net sales
increased by 2.3%.
In the area of coronary stents, Terumo Corporation markets the Nobori drugeluting stent,
a version of Biosensors International’s BioMatrix stent, through a licensing agreement between
the two companies. In October of 2012, Biosensors and Terumo extended the original licensing
agreement for territories outside of Japan until December 2014. NOBORI 2 is the largest real-
life registry of the Nobori® stent. The 3 year clinical results of the NOBORI 2 study show
consistently low occurrence of clinical events throughout the trial. Given the NOBORI 2 three
year results; the more than 20.000 patients studied in the NOBORI clinical program supports the
safety and efficacy of the Nobori® stent.
Endovascular coiling now accounts for fully 50% of neuroendovascular aneurysm
treatments in Western countries. Some 30% of cases in Japan are treated by coiling, a share that
continues to increase. Terumo figures prominently in this market.

117
CARDINAL HEALTH
Location: Dublin, OH
Website: www.cardinal.com
Revenues 2013:
Revenues 2012:
($ millions)
Company Overview
Cardinal Health is a Fortune 19 healthcare services company specializing in the
distribution of pharmaceuticals and medical products. Based in Dublin, Ohio, this company
employs more than 30,000 people worldwide. Cardinal also manufactures medical and surgical
products for ambulatory care centers, physician offices, clinical laboratories and hospitals. The
company reported fiscal year 2013 revenues of $101 billion.
The Cardinal Health medical segment manufactures high-volume replenishable products
such as gloves, gowns, surgical drapes, scrubs, and fluid management product. They support the
diagnostic industry by supplying surgical and procedural kitting operations that assemble single-
use products and apparel for specific procedures in one kit. Among the products offered:
Acquisitions
Cardinal Health has announced the completion of the acquisition of AccessClosure, a
leading manufacturer and distributor of extravascular closure devices in the United States. The
$320 million acquisition was an all-cash transaction.
- DuraBlue™ sterilization wrap is double-layered, with a securely bonded seal on
three sides, and made with non-woven 100% polypropylene SMS technology for
superior strength and microbial protection.
- The Pulse Wave® laparoscopic suction/irrigation system is lightweight and
disposable and designed to enhance speed, efficiency and ease of use during
surgery.
- The Protexis™ brand of surgical gloves designed to enable natural hand
movement.
- The Medi–Vac® portfolio of products suction and fluid collection products.

118
BIOMET
Location: Warsaw, IN
Website: www.biomet.com
Revenues 2013:
Revenues 2012:
($ billions)
Company Overview
In May of 2014, Biomet’s Boards of Directors approved a definitive agreement under
which Zimmer will acquire Biomet for $ billion. The transaction, which is subject to
customary closing conditions and regulatory approvals, is expected to close in the first quarter of
2015. The merger of Zimmer and Biomet will position the combined company as a leader in the
$ billion musculoskeletal.
Biomet, established in 1977 and located in Warsaw, Indiana, is one of the world’s leading
medical device manufacturers. The company specializes in reconstructive products for hips,
knees and shoulders, fixation devices, orthopedic support devices, dental implants, spinal
implants and operating room supplies. In 2013, the company’s revenues approached $3.1
billion.
During 2013, E1® Antioxidant Infused Technology Tibial Bearings continued to receive
strong market acceptance. The E1® technology provides Vitamin E infused highly cross-linked
polyethylene, which is designed to offer strength and oxidative stability for implant longevity,
helping Biomet to remain a market leader for products accommodating minimally-invasive knee
techniques.
The Oxford® Partial Knee, which was introduced in the United States during 2005 and
has been commercially available in Europe for 35 years, is currently the only free-floating
meniscal bearing unicompartmental knee system approved by the FDA. Biomet’s offering of
minimally-invasive partial knee systems also includes the Alpina™ Unicompartmental Knee
(which is not currently available in the United States); the Vanguard M™ Series
Unicompartmental Knee System, a modified version of the Oxford® Partial Knee that
incorporates a fixed-bearing tibial component as opposed to a free-floating tibial bearing; and the
Repicci II® Resurfacing Knee System.

119
Acquisition
Prior to its acquisition by Zimmer, Biomet was active in acquisitions in 2013.
In October, Biomet announced agreement to acquire Lanx, Inc, a full service spine
company and a leader in minimally invasive techniques and technologies. This expands Biomet
Spine’s technology portfolio through the addition of innovative products currently offered by
Lanx, including the Timberline® Lateral Approach Fusion System, and the Aspen® Minimally
Invasive Fusion System. These products are complementary to Biomet Spine’s comprehensive
offering of products, including the Lineum® OCT Spine System, MaxAn® Anterior Cervical
Plate System, Cellentra™ VCBM and the Polaris™ Translation™ Screw System.
Product Launches
The first clinical use of the Signature™ Patient-Specific glenoid instrumentation in the
United States took place in 2013. The Signature™ Glenoid System had been introduced in
Europe in February 2013, and is used in conjunction with Biomet's Comprehensive® shoulder
system, the market-leading shoulder replacement system in the United States. Signature™
glenoid guides utilize CT data and a proprietary algorithm to match each patient's anatomy and
facilitate proper positioning of the glenoid component. The Signature™ Glenoid System is
viewed as a significant advance in shoulder arthroplasty.
Biomet launched in July of 2013 the ePAK™ Single-Use Delivery System, the latest in
innovative technology for internal fracture fixation. The system is a pre-sterilized, single-use
procedure pack that addresses distal radius fractures and features the DVR® Crosslock implant
and instrumentation.

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