Dental Products Industry Perspective – August 2018

Consolidation among dental products majors continues as the industry expects 6.1% annual growth in the professional market, and a 4.5% growth in the oral care consumer market.

The major segmentation of the dental market is among professional consumables, professional dental equipment, consumer oral care, and laboratories.

The global dental consumables market is expected to grow at a 7.1% compound annual growth rate (CAGR), reaching an estimated $41.5 billion by 2023, while the global dental instrument market is set to grow at a 5.9% CAGR over the same period, reaching approximately $6 billion by 2023.¹ In addition, the dental laboratory industry, which produces restorations, is forecasted to reach $43 billion by 2022, growing at a CAGR of 5.8%.² The global consumer oral care market is forecasted to grow by 4.5% annually and reach $54 billion by 2022.³

Consolidation in the dental products market has significantly changed the competitive landscape.

Over the past few years, M&A among the large market players has had a substantial impact on market dynamics. In 2016 Dentsply acquired Sirona, the third largest dental implants maker, for $5.6 billion. In 2018, Danaher Corporation acquired Nobel Biocare for $2.2 billion to strengthen its position as a market leader. In the personal dental care space, Church & Dwight acquired Water Pik for $1 billion in 2017. But the largest transaction in recent years was Zimmer’s acquisition of Biomet for $13.9 billion.

Many of the industry’s largest companies have acquired smaller firms to bolster their product portfolios, expand their geographic coverage, or enter new niches. Consolidation has also helped boost profit margins as it allows companies to spread fixed costs across larger organizations.

CRO Industry Perspective – July 2018

Data analytics and expanding post-marketing surveillance is driving growth.

Contract Research Organizations (CROs) provide R&D services to companies in the biotechnology, pharmaceutical and medical device industries, which outsource R&D activities to access capabilities not found in-house, manage R&D costs and improve efficiencies. According to Grand View Research, the global CRO market is expected to reach $45.2 billion by 2022. Though CROs were initially niche players in clinical research services, full-service CROs today provide a wide range of services that include discovery and preclinical development, clinical trial services, post marketing surveillance, data management and analytics, consulting, and often other commercialization services.

CROs are involved with every step in the drug development process. In the discovery stage, a lead compound is found to have the potential of a new medicine. This lead compound is then tested in preclinical trials, mainly in forms of in-vitro and in-vivo experimentation. In-vitro testing is done in the lab using inanimate research tools, while in-vivo tests are conducted on animals. The discovery and preclinical development market was worth $3.25 billion in 2016¹, representing 16% of the CRO market today. It is expected to grow annually by 8.3% to 2016².

If the lead compound successfully completes its pre-clinical studies, it moves into the clinic and into human subjects. A Phase I clinical trial usually involves a small group of healthy participants and focuses primarily on drug safety and dosage determination. After products are tested for safety, a Phase II trial is conducted to test effectiveness in a slightly larger group of ill patients. After safety and effectiveness have been established, Phase III trials, which are typically much larger studies, compare the safety and effectiveness of the new treatment to other available treatments. After successfully completing Phase III trials, the new product may receive FDA approval. Across the three phases, clinical trial services represent the largest component of the CRO market, worth $25 billion in 2017 and growing 7% annually, according to Beroe, Inc.³

Healthcare Insurance Services Industry Perspective – January 2016

New regulations set to transform the U.S. healthcare landscape are providing strong growth opportunities for the firms that service health insurance companies.

In 2013, MarketsandMarkets valued the U.S. insurance services industry at $11.1 billion. The industry is expected to grow at a 30% compound annual growth rate (CAGR) through 2016.

Insurance services companies provide outsourced services to healthcare payers and administrators. Healthcare payers are the institutions that finance the delivery of healthcare and include insurance carriers, employers, and government entities. Healthcare administrators include managed care organizations and third party administrators (TPAs), organizations that are contracted to administer and manage health plans for healthcare payers.

These companies employ highly complex business processes, which historically have been manually intensive and prone to error. For this reason, they look to insurance services companies to manage their costs, mitigate risks, and improve the operational efficiency of back office processes, allowing them to focus on their core competencies.

Dental Services Industry Perspective – October 2015

Dental practices are seeking consolidation to manage costs, expand their service offerings, and spur higher growth rates.

Arriving at a global market size of the dental services industry is hazardous, but information for certain countries is available, and the U.S. is the largest single market world-wide.

Brazil has over 250,000 dentists, representing the greatest number of dentists per capita of any large economy.¹ By comparison, the U.S. has around 186,000 and Japan has over 97,000.^2,3

Dental services consist of all procedures and treatments, both medical and cosmetic, related to the oral cavity and the teeth, and business management solutions targeted towards dental service operations.

The largest segment of the industry is general dentistry, representing over 50% of the global market. This sector includes restorative services, such as dental fillings to restore structure to teeth, dental crowns to protect damaged or decaying teeth, and procedures treating damaged teeth and gums. It also comprises preventive services, from routine dental exams and cleanings, to fluoride and sealant applications, and more commonly, cavity treatments, especially among children. Finally, it includes diagnostics, such as digital radiography and x-rays.

Dental Products Industry Perspective – November 2014

The worldwide professional dental industry encompasses the diagnosis, treatment and prevention of disease and ailments of the teeth, gums and supporting bone.

The principal categories of the dental products market are dental consumables and dental equipment.

The global market for dental consumables is expected to grow at a 7.1% compound annual growth rate (CAGR) through 2018, reaching an estimated $23.8 billion. The global dental equipment market is to grow at a 4.7% CAGR over the same period, reaching an estimated $7.6 billion by 2018.¹

The largest geographical markets for dental products are in North America, Europe, and Japan, followed by the rest of Asia, Latin America, Africa, the Middle East, and Australia.

The U.S. and Europe represent the fastest growing markets for dental products, due to the generation of aging baby boomers who can afford higher quality dental procedures. Europe is expected to show exceptionally high growth due to the added element of dental tourism from patients migrating from Western Europe to Eastern Europe, seeking cheaper dental care. Consequently, Europe is forecasted to grow at a 5% CAGR from 2012 to 2018.²

While the top ten competitors used to account for only 60% of the overall market, consolidation of the largest players in the past few years have led to a changing dynamic in the market. In 2011 DENTSPLY acquired Astra, the third largest dental implants maker for $1.8 billion. In 2012 Straumann acquired 49% of Neodent for $275 million, positioning itself as a leader in the Brazilian market. Straumann has the option to acquire the remaining 51% within 6 years. In 2013 Mitsui Chemicals significantly increased its presence in the dental market through the acquisition of Heraeus for $578 million.

More recently, Zimmer’s anticipated acquisition of Biomet for $13.4 billion will double Zimmer’s spine and dental business. Danaher’s anticipated acquisition of Nobel for $2.2 billion, will help it become the world’s biggest player in dental implants. As these deals complete and the these firms begin to integrate their operations, the dental implant market is likely to experience a transformation and look quite different in the coming years.

Pharma Business Services Industry Perspective – August 2014

Changing dynamics in the pharmaceutical industry are driving a growing demand for outsourced services.

Research and Markets valued the global healthcare business process outsourcing (BPO) market at $92 billion in 2013. The market is expected to reach $188 billion by 2018, growing at a CAGR of 10.8%. The industry for outsourced business services includes payer, provider, and pharmaceutical outsourcing segments. Of these, pharmaceutical outsourcing represents the largest segment. Within the pharmaceutical outsourcing segment there are clinical research organizations (CROs), contract manufacturing organizations (CMOs), and companies that provide non-clinical, business support services.

Pharmaceutical business process outsourcing groups provide non-clinical services such as medical communications, marketing, operational and analytical support, and compliance and regulatory services. When it comes to drug development, the process from initial analysis of the opportunity to bringing the drug to market involves several steps. There are opportunities to outsource elements of each one and many pharma services companies are well equipped to take on several of them.

According to KPMG, the most highly outsourced steps within the drug development process are discovery, development, and launch/marketing. Regulatory support is also a key across each one of the above steps, and is increasingly being outsourced as well.

Areas expected to experience the most growth in the near future include marketing, sales analytics, drug development support and compliance and regulatory services. These represent areas that are less functional in nature, and more strategically important.

Medical Reprocessing Industry Perspective – July 2014

Healthcare providers are increasingly turning toward reprocessing of medical devices and equipment, in an effort to cut costs and increase sustainability.

Sterilization is the process wherein used medical equipment and devices are sterilized for future use in an effort to destroy the viability of any microbial life. Sterilization equipment represents some of the most critical equipment in a medical facility, given that the efficacy and success of patient outcomes depend on the ability to prevent cross-infections. There are a variety of methods for sterilization, which involve the use of heat, pressure, chemicals, or radiation.

The repair and refurbishment market serves a wide range of medical devices and equipment, from singleuse devices such as endoscopes and surgical tools to larger equipment such as imaging machines. The imaging, monitoring, and diagnostic devices segment is the fastest growing and represents 17% of the global market. Repair and refurbishment services range from basic cosmetic repairs to a full restoration of equipment back to its original state.

CRO Industry Perspective – July 2014

Demand to spur full-service model, strategic partnerships, and growth in preclinical services

Contract Research Organizations (CROs) provide outsourced research services to the biotechnology, pharmaceutical and medical device industries, allowing them to manage R&D costs and focus on their core competencies. These services include drug and device research and development, including drug discovery, preclinical and clinical trials, post-marketing surveillance, and related data management and consulting services.

Preclinical services, which include discovery services, represent 15% of the CRO market. These consist of drug safety testing and toxicity testing in the form of in-vivo and in-vitro experimentation. In-vitro experimentation, conducted using laboratory tools, is used to test the efficacy of a drug on microorganisms, such as extracted cell tissue or DNA molecules. In-vivo experimentation in preclinical trials and drug discovery involves testing on animal models, rather than isolated organisms.

Healthcare Insurance Services Industry Perspective – January 2014

New regulations set to transform the U.S. healthcare landscape are providing strong growth opportunities for the firms that service health insurance companies.

In 2013, MarketsandMarkets valued the U.S. insurance services industry at $11.1 billion. The industry is expected to grow at a 30% compound annual growth rate (CAGR) through 2016.

Healthcare Staffing Industry Perspective – June 2013

The U.S. Healthcare Staffing industry is currently valued at roughly $14 billion, and is expected to grow at a CAGR of 3.1% from 2013 to 2018.

Healthcare staffing agencies provide recruitment services to healthcare providers for positions such as physicians, nurses and allied healthcare professionals. Their services consist of permanent and temporary placement, evaluation-to-hire, retained search and direct independent contracting services.

Roughly 75% of the industry’s revenue is derived from permanent and temporary employee placement services.

Permanent and temporary recruitment is comprised of physician, nurse, pharmacist and allied health staffing. Allied health encompasses most professions within healthcare staffing other than physician and nurse staffing, including: radiology, occupational therapy, human resources, medical coding, medical assistance, health care administration, physical therapy, etc.