Electronics Production | August 07, 2006
Consolidation in Medical Imaging Market
Amidst challenges such as price erosion, reduced hospital beds, lack of radiologists and a trend towards multi-modality deals, novel picture archiving and communication systems and digitisation initiatives are spurring growth in the European medical imaging market.
As this scenario sets the stage for greater consolidation, uncertainty remains over whether traditionally strong participants will continue to dominate their smaller competitors. “Consolidation in the medical imaging industry in Europe will be driven by a continued movement towards complete digitisation of the radiology department and workflow integration through PACS,” explains Frost & Sullivan Research Analyst Karthik Arun B. “The need to reduce costs and, at the same time, maintain the high standards of quality expected from medical imaging equipment will further influence the trend towards consolidation.” Alliances and acquisitions by various industry participants over the past three years indicate a definite trend towards vertical integration. Based on the current scenario, this trend is set to continue for the next three to four years. Moreover, issues such as cultural integration, change management as well as certain reimbursement rules could hamper potential consolidation in the medical imaging industry in Europe. “The increasing trends towards price reduction is minimising the bottom lines for companies,” observes Mr. Karthik. The challenge for market participants, therefore, will be to enter into mutually beneficial partnerships with other participants. Companies should look to acquire or form alliances with others that can help them broaden their product portfolio rather than increase their market share.