Healthcare systems move billions in global wound care sales, yet chronic wounds still are a chronic problem. Despite the legion of products developed for wound care, from dressings to bioengineered skin, the obesity- and age-driven increase in chronic slow-healing and non-healing wounds plague healthcare systems globally. Results according to MedMarket Diligence’s biennial, 2018 Wound Management report (#S254).
BIDDEFORD, Maine – April 1, 2018 – PRLog — Research and routine clinical practice in wound management have advanced the science to better understand and address chronic wounds, but much work remains for research and manufacturing to impact the growing caseload.
Chronic wounds represent a large but still underestimated problem for health systems globally and industry needs to step up in response, according to MedMarket Diligence, LLC.
“Our recent research shows that chronic wounds, which have long been no secret to clinicians, epidemiologists, and product manufacturers as a growing health problem, are actually even more prevalent and costly than has been previously reported,” says Patrick Driscoll of MedMarket Diligence, who has tracked wounds in clinical practice and industry for 25 years.
Care of chronic wounds is a significant, global burden on healthcare systems. In the USA alone, it is estimated that at least 6.7 million people suffer with chronic wounds, requiring treatment in excess of $20-50 billion per year (estimates vary according to the definitions). A report from the UK suggests, based on National Health System (NHS) data, that chronic wound prevalence in developed countries is about 6% and that care of chronic wounds accounts for around 3-5.5% of total healthcare spending in those countries. (Phillips CJ, et al. Estimating the costs associated with the management of patients with chronic wounds using linked routine data. Int Wound J. 2015. doi: 10.1111/iwj.12443.)
Definitions help clinicians determine whether a wound is healing or not. For example, for venous leg ulcers (VLUs), if the wound has not shown at least a 40% reduction in wound size in about four weeks, then additional therapies are called for. A non-healing foot ulcer is generally defined to be any ulcer that is unresponsive to standard therapies and persists after four weeks of standard care. Once a foot ulcer occurs, unfortunately some 60% of patients end up moving into the chronic non-healing category. Many diabetics develop foot ulcers.
Chronic wounds and burns continue to present challenging clinical problems. For example, chronic wounds may present with persistent infections, inflammation, hypoxia, non-responsive cells at the wound edge, the need for regular debridement, etc. For DFUs, it is important for the patient to continuously wear an offloading device such as a special boot. Additionally, the practitioner must carefully debride not only the necrotic tissue in the wound bed, but the wound edges. Cells at the wound edge seem to be unresponsive to typical healing signals, and therefore must be removed to promote and support proper healing.
To the person with a chronic wound, the condition represents pain, social and psychological debilitation and usually a financial load. To society, wound care—and especially the treatment of difficult-to-heal wounds—may represent great human suffering, social discomfort, days lost from work, mental health problems, recurrent infections and great economic burden and the human burden of wound care. Having a chronic wound not only necessitates physical care of the wound, including cleaning, disinfecting, irrigating, and changing dressings; it also impacts the emotional and psychological health of the patient. Depression can set in due to a lower quality of life and dependence on others for care of the wound, as well as for overall assistance, both physical and financial. Wounds may cause odors or may have visible drainage, staining clothing and triggering feelings of embarrassment and shame. These in turn may lead to isolation due to decreased mobility and the fear of being a burden on family and friends. To make things worse, increased stress can slow the progress of wound healing. For all of these reasons, chronic wounds drive product development.
In caring for a chronic wound, the dressing costs are only part of the picture; the less visible costs include such items as nursing care, medications for pain and infections, and hospitalization. Hospitalization is a leading cost driver for wound care, accounting for at least 50% of the global economic burden. Nursing time to properly care for the patient with a chronic wound can be lengthy, and this is time that could be spent with other patients. In a new report published in the December 2017 online version of the International Society for Pharmacoeconomics and Outcomes Research’s (ISPOR) Value in Health journal (An Economic Evaluation of the Impact, Cost, and Medicare Policy Implications of Chronic Nonhealing Wounds. Nussbaum, Samuel R. et al. Value in Health, Volume 21 , Issue 1 , 27 – 32) (see the study), the researchers found that the costs related to wound care in the Medicare population (USA) were much higher than originally estimated, and that care took place primarily in outpatient settings. For the calendar year 2014, there is considerable variation in the estimates originating from different sources:
“Total Medicare spending estimates for all wound types ranged from $28.1 to $96.8 billion. Including infection costs, the most expensive estimates were for surgical wounds ($11.7, $13.1, and $38.3 billion), followed by diabetic foot ulcers ($6.2, $6.9, and $18.7 billion,). The highest cost estimates in regard to site of service were for hospital outpatients ($9.9–$35.8 billion), followed by hospital inpatients ($5.0–$24.3 billion).”
The development of advanced wound care dressings, devices and biologics is helping to change this situation. Although these advanced products may seem (or may be) expensive, they end up saving money for health care systems by healing wounds more rapidly.
The wound care industry remains quite fragmented, with about eight companies holding leading market shares, but with possibly thousands of small cap companies around the world that are also manufacturing and marketing various wound care products. The Traditional Wound Care space remains attractive, in part since gauze dressings are relatively easy to manufacture and are also still the most commonly-used wound dressing. Even a small company can invent a novel twist to a dressing and experience a rise in profits and inroads into the market.
Low to medium industry concentration. As the traditional and advanced market shares diagrams below demonstrate, there are five to eight major players in Traditional and Advanced Wound Care Markets.
While these firms account for about 79% and 73% of the total markets, respectively, a significant portion of these markets are covered by hundreds or thousands of Other companies. This low to medium level of concentration means that smaller companies, or large companies looking to break into Wound Care, are able to do so more easily than if, say, three companies controlled 95% of the market.
Johnson & Johnson is estimated to be the Traditional Wound Care market leader with about 26% share, followed by Smith & Nephew, 3M Health Care and Hartmann. Medline Industries is estimated to account for about 8%, while Others account for about 21% of this market.
Breaking into the Advanced Wound Care markets presents a somewhat greater challenge. Here, the leading companies have invested heavily in R&D to gain strategic competitive advantage, as well as to create improved products for patients. Smith & Nephew is holds an estimated 21% of this market, followed by Acelity and Johnson & Johnson with 11% each, and Mölnlycke, 3M Health Care, Hartmann, Cardinal Health and ConvaTec accounting for smaller shares. Here again, Others accounts for at least 27% of this market.
Opportunities exist in both Traditional and Advanced Wound Care, especially if a company is in the position of acquiring part or all of an existing wound care company, and if the company can then invest in the development of its new products. If points of distribution overlap, then so much the better.
Relatively low barriers to entry. Good news for companies wishing to break into wound care: barriers to entry into the traditional wound dressing segments (Adherents, Gauze and Non-Adherent Dressings) are relatively low, while demand remains strong. Typically, once a company is established in a traditional segment, it may either plow revenues into research and development, or it may acquire companies to more easily break into new product segments and markets. Many companies in wound care have followed just this path to gain market share and make an impact in the industry.
From, “Wound Management to 2026”; Report S254. Excerpts available.
Generally, the longer the product has been around (e.g., gauze), the less complex it is compared to emerging technologies…
…BUT simpler is easy to adopt and, with well established sales, growth on a percentage basis will be low (see area in red)..’
Generally, new technologies incorporate rarer materials, have more complex construction, and may cost considerably more…
…BUT complex technologies may be far more effective clinically than older technologies and may allow treatment where no older technology could, and with low initial sales (penetrated potential), growth on a percentage bases will be high (see area in green).
Country and Regional Variation in Growth Rates
While this size-to-growth dynamic exists for most product types, the dynamic varies from one geographic region to the next. The time point at which a particular product/technology starts to be more rapidly adopted — or the rate at which use of established products are use starts to decline — can vary considerably from country to country.
As a result, there will be variability in sales growth rates for a product in one country/region versus another.
For example, the 2017 to 2026 compound annual growth rate in sales of Alginates in wound management range from a low of 5.3% in one country to a high of 24.3% in another country. (If you make alginates, in which country would YOU like to compete?)
Regionally, as in USA versus Europe versus Asia/Pacific, etc., there is less variation in growth rates for any given product in that region. For alginates:
country-to-country variation in CAGR: 19%
region-to-region variation in CAGR: 7.8%
In other words, the difference between the countries with the highest and lowest CAGRs for alginate sales is 19%, while the difference between regions shows one region with a 7.8% higher CAGR for alginates than the lowest growth region.
We present data from our 2016 to 2026 forecast of the global market for wound management products. (Data available, full report this month.)
At a glimpse, you can see the overall trend in global wound management, including the relative size of each market. (The four regional sales charts are shown on the same scale to illustrate this.) Most notably, the USA dominance of this global market is fading, as aggregate Asia/Pacific sales of all wound products will eclipse USA sales within the forecast period.
Looking at just the aggregate of all wound product types, Asia/Pacific relative sales are squeezing out shares in every other region.Source: MedMarket Diligence, LLC; Report #S254.
When we then look specifically at the USA versus Asia/Pacific, it illustrates that by 2020, Asia/Pacific’s sales of wound management products will eclipse those of the U.S., making it the largest regional wound management market.