The American Heart Association says sudden cardiac arrest claims 900 plus lives a day. And for those that survive the initial attack, the survival rate is low, about five percent is the national average.
But while medical communities across the country are continuously working to improve response rates and obtain equipment to treat victims of cardiac disease or sudden cardiac arrest, they’ve having second thoughts about their first line of defense: internal and external cardiac defibrillators.
Although manufacturers have increased production of cost effective defibrillators, and also continue to develop high-end products to maintain revenue and profits, technical problems besetting existing equipment has thrown the market into a bit of turmoil. On a worldwide scale, incidentally, the defibrillator market is estimated at about $6 billion in annual turnover. But the outlook for defibrillators, which jump-start the heart via electrical charges once it’s stopped, is a bit murky right now.
Frequent recalls have rocked this market with sales of heart-shocking cardiac devices, once hot sellers, now floundering somewhat. Medtronic, Inc. took the latest hit, voluntarily recalling its Sprint Fidelis implanted defibrillator (ICD) leads in early October. This recall focused on 235,000 leads that may fracture causing a patient to receive unnecessary electrical jolts or no jolt at all when needed. In 2005, Medtronic recalled around 87,000 implantable cardioverter defibrillators after faulty batteries were discovered. This year too, Guidant Corporation, now part of Boston Scientific Corp., also recalled 50,000 defibrillator devices after it was found that some could short circuit causing major safety concerns. Last month, Boston Scientific announced worldwide job cuts of more than 2,000 employees after posting net losses for the quarter ending September 30, of $272 million.
So little wonder that the medical community and their patients are a little antsy, wondering whether getting an implantable defibrillator is worth the risk. It also has industry experts, who were once predicting strong sales increase in the defibrillator market for 2008, shying away from that prediction. In fact, Medtronic has reported a decline in the US implantable defibrillation market starting in 2007’s first quarter and has continued the downward slide through the year. Medtronic has maintained market share of approximately half of the entire defibrillator market, with Boston Scientific (Guidant) and Canada-based St. Jude Medical, Inc. picking up the rest.
So acute is concern over product safety that later this month, the Medical Device Safety Institute (MDSI) is sponsoring a conference at Beth Israel Deaconess Medical Center (BIDMC), Boston, that will discuss and hope to find solution talking points about the number of critically important issues that have impacted the market. In particular, the conference will focus on ICD lead safety and performance issues to identify where changes to the current system are needed.
There is Some Good News Too
On a positive note, St. Jude Medical, Inc. reported that 2007 second-quarter sales of implantable cardioverter defibrillators increased 18 percent, to $327 million, compared to the same period a year ago. Richard A. Packer, President and CEO at ZOLL said the company’s third quarter 2007 performance was strong, "particularly in the North American pre-hospital market." He says that ZOLL continues to grow across the globe, with particular strength in professional defibrillators sold in emerging markets and AED growth in Europe.
Meanwhile, Defibtech, LLC, in Guilford, CT, which designs and manufactures AEDs and has attained a staggering 16,286 percent revenue growth rate over five years from 2002 to 2006, has earned the highest ranking among medical equipment companies and Number 7 rank overall in Deloitte’s Technology Fast 500. The company recently announced that, over the past five years, more than 50,000 Defibtech’s Lifeline(TM) and ReviveR(TM) defibrillators have been deployed in public access areas, workplaces, police and fire vehicles, schools and churches, health clubs and other locations through distribution partners worldwide.
The Hartford Courant printed an article in its October 21, 2007 edition entitled Building Home Grown Tech Firms, in which Defibtech president Gintaras Vaisnys, said, "Right now, Defibtech is concentrating on organic growth. For example, next year we’ll be releasing a new set of products. We’re looking to release a product that’s the iPhone of the defibrillator market, and I think from that we can see tremendous growth in the next couple years just from that type of product."
Future bright for refurbished defibrillators
Because cost-effective defibrillators are in demand, the refurbished defibrillator market is robust. DOTmed.com has hundreds of refurbished units offered for sale or on auction by an array of reputable users.
Shannon Moore, CEO of STAT Biomedical Sales and Rentals, Inc., Shannon says his Lubbock, TX company can save a client over half of what it would normally cost to purchase a new biphasic defibrillator. "Our refurbishing division has seen steady growth," Moore says. "When we refurbish a defibrillator, it goes through a 20 point process. It is tested, calibrated and inspected to the original manufacturer’s specifications." STAT Biomedical is also equipped to deal with recalls. Their computerized system alerts them of a recall, which is forwarded to their customers. Moore says that if they can make the repairs on the recall they will. If not, they will recommend that the client return it to the authorized dealer for replacement.
Scott Patneaude, President, ACE Medical Equipment, Inc., Clearwater, FL says his company is not concerned with recall issues because the defibrillators they refurbish are older models that have been around five years or more. "By buying a refurbished defibrillator, a company can save up to 40 to 60 percent," he says. "Our defibrillators all come with a one year warranty, and we never sell what we can’t service."
David Ogren, President, OMED Of Nevada, Reno, sells many defibrillators on DOTmed. He believes that refurbished defibrillator sales will continue to grow because they are readily available as used equipment from hospitals. "The mono-phasic, older models will go to international emerging health care programs and bi-phasic models will sell in the US and more progressive international markets," says Ogren. "When technology changes, the leading edge buyers step up."
Automated External Defibrillators (AED) helping to revive ‘defib’ market
Recent technology has made it possible to save lives by using a portable Automated External Defibrillator (AED). These simplified electronic machines are used with a minimal amount of training to treat a person who is suffering from cardiac arrest. An AED guides a user by audible or visual instructions, and its timely initiation is key to what is called "the chain of survival," which also includes cardiopulmonary resuscitation (CPR). According to the American Heart Association, 20,000 lives or more can be saved each year by immediate use of an AED and with wide distribution, among trained responders, as many as 50,000 deaths can be avoided.
AEDs are found in many public places, transportation centers, gyms, schools, at athletic events, in offices, apartment buildings and homes. On the state level, many legislatures have passed laws that encourage a greater distribution and availability of AEDs. In fact, all 50 states have enacted defibrillator laws or adopted regulations.
Randy Lowers, President, L&R Services, Miramar, FL sells the Zoll AED and has heard from several of his dental accounts that dental offices will need to carry at least an emergency AED unit for any surgeries they perform.
Mark Taylor, VP/ sales, Dixie Medical, Jackson, TN says, "As new laws and protocols are passed i
n different states, more and more defibrillators are needed for an increasing number of sites." Taylor said that recently, the State of California passed a law requiring all health and fitness centers to have AEDs on site, and Tennessee has mandated that all dentists have AEDs and Pulse oximeters if they are sedating patients.
The commercial market for AEDs continues to grow and machines that once sold for $3,000 or more can now be purchased for $1,000 or less. It is estimated that lower prices will allow for easier access to a cost-conscious public and will probably account for 60 percent of AED unit shipments in 2011. Because of the low cost of purchasing an AED, many in the defibrillator refurbishing business shy away from rebuilding them, but several still repair them. L&R Services sells the Zoll AED and Lowers said that he would do annual inspections on AEDs for state and OSHA laws and standards. He agrees that it’s not financially viable to refurbish these units because of their low cost. He sells the Zoll AED, he says, "because I can’t compete with the larger market on selling the bigger critical care units, since everyone is upgrading to follow new standards. As far as servicing goes, right now all units in my critical accounts are new and under warranty with the manufacturer."
While the prices of AEDs are falling, manufactures must consider producing defibrillators with advanced functionalities that are more expensive in order to increase their overall profit margins. High-end external defibrillators that provide advanced monitoring and defibrillation capabilities are primarily used by emergency care personnel, physicians and trained nurse practitioners. They include many multi-parameter monitoring capabilities that allow caregivers to perform extensive life saving treatment that is recorded and channeled directly to the hospital, where a physician can give further instructions for treatment. All information can be immediately transferred to the treatment facility once the patient arrives.
Larger companies manufacturing defibrillators with advanced functionalities are competing for many major contracts, while smaller companies and refurbishers are "green" selling units to emerging markets, including community hospitals, dental and physician offices, nursing homes, gyms and industrial occupational health facilities.
All and all, it seems that despite the challenges that are affecting the current defibrillator market, there are other factors that cast some positive guidance on the future of defibrillator sales.
Mark Ragus, sales manager, Foremost Equipment, Inc., Rochester, NY thinks that Bi-phasic units are now the norm. "The AHA 2005 guidelines have affected the AED market, by making the mono-phasic waveform essentially obsolete, says Ragus. "There is research into Tri-Phasic defibrillation," so the market will keep changing as more research uncovers the pluses and minuses of current therapies, and companies will provide products that utilize that research."
The fact that the public is becoming more aware of cardiac arrest and the need for early intervention through defibrillation, even in the home, is strong — as is state and federal legislation and laws that are favoring placing defibrillators in more public and private settings. Perhaps the most important factor of all is the need — defibrillators are, after all, lifesavers.