Strategic analysis of the European regional anaesthesia kits market

Growing awareness of regional anaesthesia’s myriad benefits has boosted the number of such procedures being performed across Europe. This trend is, in turn, set to trigger increased uptake of regional anaesthesia kits. Continued pricing pressures are likely, however, to compel market participants to implement value-added strategies of which kit customisation is expected to be a critical component.

The spiralling costs of healthcare provision are intensifying pricing pressures in the medical devices industry with ‘commodity’ products, such as needles and catheters being the most acutely affected. While technological development in such product ‘commodity’ categories is unlikely to help arrest price erosion, alternative strategies to maintain price levels are being developed.

“Despite mounting pricing pressure, companies can maintain pricing levels by implementing value-added strategies such as customisation, just-in-time delivery, product bundling and one-stop-shopping options,” says Frost & Sullivan Research Manager Sumit Sharma. “In particular, the increasing demand for kit/tray customisation provides participants an opportunity for extending value proposition to customers and raising average prices.”

Amongst the perceived additional benefits that kit customisation is expected to offer include reduced nursing hours spent in procedure set-up, decreased cross-contamination, more efficient tracking of individual procedure costs and the capacity to meet diverse clinician preferences or requirements. However, the ability to provide a lead offer of high quality regional anaesthesia products alongside additional customisation services poses a major challenge.

Most of this challenge relates to determining a cost-effective process for customising products - whether through outsourcing the manufacture of certain parts of the kit or contracting out the entire ‘custom’ division of the business. Before deciding on the optimal market approach, however, companies need to assess prospective partnership opportunities as well as their own internal capabilities.

Maximising internal resource capabilities while achieving manufacturing efficiencies is also set to help companies meet the demand for low product prices by healthcare purchasing groups, since they can offer customers economically priced products while maintaining profitability levels.

In 2003, the total European regional anaesthesia kits market was valued at 66.66 million euro, of which the epidural kits segment generated the most revenues followed by peripheral kits, combined spinal and epidural (CSE) kits and spinal kits segments.

Particularly high growth - estimated at 14.2 per cent from 2003 to 2010 - is forecast for the peripheral kits market segment. This segment is expected to experience rapid uptake throughout Europe due to the clinical advantages of this technique and related procedural growth.

“Companies need to strategically position themselves to leverage the high growth opportunity projected for the peripheral kits segment and anticipate the opportunities that kit customisation offers,” advises Mr. Sharma. Overall, market leader B. Braun currently leads the peripheral market and is active in the epidural, CSE and spinal kits segments, as well. Other notable market participants include Portex, Becton, Dickinson and Company (BD), Pajunk, Vygon, Arrow International, Rusch and Temena.

Many of these companies have developed product specialisations in various niches. However, this scenario is evolving: while product quality is still identified as the central factor for hospitals when sourcing a supplier, kit configuration is starting to assume an increasingly crucial role. This is likely to effect a shift in market share distribution.

“Product advancement is likely to be crucial with companies needing to rapidly respond to the growing customer requirement for customisation and expanded sets,” notes Mr. Sharma. “Additionally, developments in individual component technology such as needle tips, hubs and ports, require investment to ensure the quality requirements of end users continue to be met.”