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As highlighted in the recent Premium Insights detailing Signify Research’s expectations for RSNA 2022, there is significant focus and expectation surrounding the advanced imaging modalities, and in particular MRI. Such a focus was borne out in Signify Research’s MRI Equipment – World – 2022 report, which highlighted the potential for MR imaging in the coming years.
There are several reasons for this potential, explains Research Manager for Medical Imaging Bhvita Jani, a turnaround, she explains, that is particularly remarkable given the market’s tribulations during the worst of the Covid-19 pandemic.
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“As happened in several advanced imaging technology markets, the MRI market was very negatively impacted by Covid 19. After all, MRI wasn’t only irrelevant for Covid-19 detection, but systems also have a very high price point, a difficulty at a time when providers were stretched.
“As such, there were a lot of orders and sales that were delayed. The exact impact varied from region to region, but overall, we did see a significant drop from $4.7bn in 2019 to $4.4bn in 2020.”
This decline was most apparent in North America and Asia Pacific, where revenue fell by 10.4% and 9.8% respectively as providers channelled resource to Covid diagnosis and care, delaying many of the elective procedures for which MRI is most commonly used.
This dip was short-lived, however. “In 2021 there was a strong rebound of MRI sales revenue as order backlogs were starting to be fulfilled again, while additional time-sensitive health funding allowed providers to invest resource in modernising imaging equipment. This was particularly true for MRI as providers began to deal with the backlog of elective procedures,” continues Jani.
“Starting with that performance in 2021, the market is continuing to grow in the range of four to seven percent on a year-by-year basis over the forecast period.”
There are several reasons for these strong growth prospects. In many emerging markets there is predominantly new demand for MRI systems as a greater number of providers look to expand access to MR imaging, leveraging additional COVID funding to support investment.
There are also some significant trends in more mature markets. Among them is the rapid pace of technological development. Over recent years there have been innovations such as portable weight-bearing MRI, helium-free MRI and ultra-high field MRI, supporting both entry into emerging markets but also new applications in mature markets.
“Even though some demand is stemming from expansion into new settings, workhorse 1.5 Tesla and particularly 3 Tesla systems are expected to also provide a significant growth driver. New image acquisition technology (exemplified in Siemens Healthineers’ latest 3T MRI launch ahead of RSNA) really showcases that attention on high-end MRI is not dwindling – if anything, as emerging markets get hit by global recessionary impacts the mid and high-end markets will be the main positive drivers of growth mid-term.”
Furthermore, the integration of MRI into clinical workflows as well as broader system efficiency are also a key focus.
“Faster scan times, utilising AI for image reconstruction and reducing the time spent on protocolling are also key for competitive differentiation. AI is one of the tools that vendors are turning to, enabling them to automate a greater portion of the operational workflow, including patient positioning, scheduling and scanner servicing, and fleet management and remote diagnostic tools.
“There has also been innovation with a more clinical focus. With some providers, for example, focusing on how MRI can be better used in certain applications such as neurology, cardiology, orthopaedics and general surgery.”
Such innovations, and such focus on how providers can get value from solutions will help vendors to continue to make sales, giving hospitals a reason to refresh or replace their product ranges, while also helping providers deal with some of the challenges that they are presently facing.
Along with the healthcare-specific challenges that providers and vendors have been forced to tackle in the wake of the coronavirus pandemic, vendors must also deal with growing economic uncertainty, and the change it presages. Amidst this change, some lesser-known vendors that serve specific niches or specific market segments may hope that they can benefit from changing conditions. This looks unlikely however, with around 95 percent of the global MRI market accounted for by just six vendors, and 85 percent of the market accounted for by just three vendors.
“Any change to this picture looks unlikely,” states Jani. “It’s the major players; Siemens Healthineers, GE HealthCare and Philips which are set to continue to do well in coming years thanks to their robust and broad product portfolio which caters for all ends of the MRI spectrum. It is not just factors around MRI modality portfolios that matter though – as providers look to de-risk future investments and better manage imaging assets, wrap around ‘solutions’ such as fleet management, services, analytics, and professional services, of MRI are all important factors in procurement for customers, for which the market leaders have a strong reputation.
“They also have strength globally, which sets them apart from the relatively smaller entrants, Canon Medical, Fujifilm and United Imaging, which are still very reliant on their domestic markets. Despite this, Canon Medical has strengthened its position and sales capacity in its overseas markets, including the United States.
“Furthermore, I expect that with the current economic pressures that are being faced by providers, there will be some opportunities for vendors such as United Imaging to expand beyond their domestic markets, and make some headway in more mature markets. This is especially likely in more price-sensitive markets, as market leaders ‘bake-in’ inflation-proof pricing schemes in the short and mid-term.”
“This opportunity is limited though,” continues Jani, “The established leaders have worked to establish longer-term contracts and managed service agreements, as well as brand loyalty. These make it harder for newer entrants to displace them. Additionally, there is also a lot of pent-up demand, notable in the market leaders’ reported record order books, which will continue to strengthen the market leaders’ market positions.”
Despite these competitive differences, there is no reason to think the complexion of the market is likely to change significantly over the forecast period. Instead, provided vendors have the portfolio to match providers’ requirements, sound growth can be expected. This fundamentally is a result of increased demand for better clinical precision and diagnostic outcomes.
The vendors that thrive over the coming years will be those that are best able to meet this demand for advanced imaging capabilities across their ranges, while navigating inflationary pressures, supply chain disruptions and potentially capped R&D budgets. There will, no doubt, be some interest in niche products for very specific use cases, but broadly, it is the vendors that are already in the most dominant positions that are best placed to keep innovating. Demand, despite some of the economic headwinds facing global markets, looks very robust. Good news for major healthcare technology vendors that rely heavily on the MRI segments as a leading sector for growth and profit margin.”
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This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. The content is only available to companies that have subscribed to this paid-for service. To view other recent Premium Insights that are part of the service please click here