Hernias are caused when an organ protrudes through an abnormal opening in the body. They can be repaired by using either a tension technique, which uses sutures, or a tension-free technique, which involves the insertion of a mesh. Tension-free techniques, which use a hernia mesh, offer faster recovery time and lower recurrence rates, and are thus on the rise across the US, Europe, Latin America, and Canada, concomitant with the growing hernia population.
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Tension-free techniques may be used on both ventral repairs (occur in the area of a prior surgical incision) and inguinal repairs (resulting from a weakness, tear, or opening in the lower abdomen or groin). Ventral hernia repairs generated the majority of revenues in the tension-free hernia repair market, driven by biologic allograft meshes. The premium prices that these devices demand ensure that the market for hernia repair will grow robustly despite adverse market conditions brought on by economic instability. Revenues for hernia repair meshes achieved a global total of almost $800 million in 2008. Strong growth in the US, Latin America, and Canada, and to a lesser extent, Europe, will push revenues in this market to more than $1.2 billion by 2013. Although budgetary constraints and inconsistent reimbursement will hinder the sale of these devices to some degree, the overall use of higher-priced advanced technologies will rise, fueling market expansion.
In the US, the largest hernia repair device market, the adoption of more advanced devices will spur continued growth. In the ventral hernia repair device market, nonadhesive synthetic meshes are gaining increasing favor because they do not stick to the bowel, which is an uncomfortable side effect that can occur with other types of synthetic mesh such as flatsheet. Biologic meshes will also be used more often for complex ventral hernia repairs, as the materials are more effective compared to synthetics when used in an infected region, or with patients at a high risk of infection. Biologic meshes are used less often in inguinal hernia repairs because inguinal hernias are rarely associated with complications such as infection and recurrence; in most cases, synthetic meshes are sufficient. A lack of reimbursement for inguinal hernia repair will also limit the adoption of higher-priced biologic meshes in this segment.
US hernia repair revenues will increase steadily due to the growing use of laparoscopic surgery. Because laparoscopy offers a number of benefits, including lower infection rates, faster recovery periods, and reduced patient pain, this method of hernia repair will rise in popularity. This will in turn allow for market expansion because premium-priced advanced hernia meshes are often used during laparoscopic repairs. Rising rates of obesity and the expanding US elderly population will also contribute to device sales.
Many countries in the European market, which generated the second highest revenues of all four regions in 2008, suffer from a lack of reimbursement for hernia repair devices, limiting revenue expansion somewhat. With all European countries constrained by shrinking health care budgets, the purchase of premium-priced products in many facilities will be limited. Because they command a premium price, these budget constraints will particularly affect segments such as nonadhesive and proprietary hernia meshes. Furthermore, because tension-free hernia repair is newer and boasts less clinical support than the more traditional suturing repair, more conservative European surgeons have shown reluctance to adopt the technology; however, more and more medical students are training with these newer meshes and are graduating with a great deal of comfort and confidence in the technologies, which will spur adoption and revenues for tension-free repair in the coming years.
The hernia repair device market in Latin America is much smaller than that of the US and Europe, but will post growth at double-digit rates over the coming years. Given their ability to provide a stronger repair and reduce patient discomfort, tension-free repairs are becoming more popular in Latin America. Similar to Europe, medical students in Latin America are now receiving training on the use of tension-free hernia repairs; therefore, an increasing number of surgeons will be willing to adopt this technique over traditional methods. Device revenues will be somewhat limited, however, as a result of funding constraints. Because most Latin Americans are covered under public health care, a large portion of hernia repairs are performed in publicly funded facilities. Scarce resources in the public sector forces facilities to prioritize more life-threatening procedures over hernia repairs. Many patients are wait-listed, which will restrict the volume of hernia repairs performed through 2013. In addition to waitlisting, facilities are also implementing cost-saving measures, including the use of less expensive products, to deal with budget constraints. A number of domestic manufacturers offer meshes at a fraction of the cost of those marketed by international companies. The presence of these lower-cost, locally manufactured hernia repair devices will thus reduce average selling prices and revenue potential.
Compared to other regions, the Canadian market for hernia repair devices is small, but it will grow robustly over the coming years due to the increasing popularity of more premium-priced meshes such as nonadhesive meshes in the ventral market and proprietary meshes in the inguinal market. The country’s universal health care plan is strong but because it is based on public funding, health care facility budgets are stretched. As a result, some hospitals are unable to pay for higher-priced products, such as biologic meshes, if less expensive alternatives are adequate. In addition, facilities have a limited amount of operating room time that can be allotted for hernia repairs. Consequently, the volume of treatments performed per year is considerably lower than the number of Canadian hernia cases. Nevertheless, with the demand for improved products and the growing demographics of both the elderly and the obese, the Canadian hernia repair market will expand significantly through 2013.
With all four global regions experiencing solid growth, the hernia repair market continues to attract new entrants and inspire new developments. Major industry players, including Covidien, Davol, Ethicon, LifeCell, and W.L. Gore, are continually innovating and developing new materials in order to capitalize on the demand for stronger mesh placements and reduced patient downtime. Smaller players continue to make inroads, however, and will continue to incrementally change competitive dynamics. IQ