Australia Medical Devices Report

AUSTRALIA Medical Devices Report Q2 2014

Australia Medical Devices Report ISSN 2053-8030 © Copyright 2014 Espicom Business Intelligence All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.

Every care has been taken to ensure that the information contained in this report is correct. The publisher accepts no liability for decisions made on the basis of information contained herein.

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A catalogue record for this report is available from the British Library.

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Australia Medical Devices Report Q2 2014

CONTENTS Espicom Industry View ....................................................................................................... 7 SWOT .................................................................................................................................... 9 Medical Device Market ............................................................................................................................... 9 Political ................................................................................................................................................. 10 Economic ............................................................................................................................................... 11 Business Environment .............................................................................................................................. 12

Industry Forecast .............................................................................................................. 14 Medical Device Market Forecast ................................................................................................................ 14 Table: Projected Medical Device Market, 2013-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Table: Detailed Medical Device Market By Product Area, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Table: Detailed Medical Device Market By Product Area, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Table: Detailed Medical Device Market By Product Area, 2008-2018 (% Of Total) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Table: Detailed Medical Device Market By Product Area, 2009-2018 (US$, % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Consumables Market Forecast ................................................................................................................... 31 Table: Consumables Market, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Table: Consumables Market, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Table: Consumables Market, 2009-2018 (US$mn % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Diagnostic Imaging Market Forecast .......................................................................................................... 36 Table: Diagnostic Imaging Market, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Table: Diagnostic Imaging Market, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table: Diagnostic Imaging Market, 2009-2018 (US$mn % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Dental Products Market Forecast ............................................................................................................... 42 Table: Dental Products Market, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Table: Dental Products Market, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Table: Dental Products Market, 2009-2018 (US$mn % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Orthopaedics & Prosthetics Market Forecast ................................................................................................ 46 Table: Orthopaedics & Prosthetics Market, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Table: Orthopaedics & Prosthetics Market, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Table: Orthopaedics & Prosthetics Market, 2009-2018 (USmn % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Patient Aids Market Forecast ..................................................................................................................... 49 Table: Patient Aids Market, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Table: Patient Aids Market, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Table: Patient Aids Market, 2009-2018 (US$mn % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Other Medical Devices Market Forecast ...................................................................................................... 53 Table: Other Medical Devices Market, 2008-2018 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Table: Other Medical Devices Market, 2008-2018 (US$ Per Capita) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Table: Other Medical Devices Market, 2009-2018 (US$mn % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Annual Medical Device Imports ................................................................................................................. 59 Table: Medical Device Imports By Product Area, 2008-2012 (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Table: Medical Device Imports By Product Area 2008-2012 (US$000s, % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Table: Medical Device Imports By Product Area, 2008-2012 (Local Currency 000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

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Australia Medical Devices Report Q2 2014 Table: Medical Device Imports By Product Area, 2008-2012 (Local Currency 000s, % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Table: Medical Device Imports By Product Area, 2008-2012 (% Distribution) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Table: Leading Medical Device Suppliers By Product Area (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Table: Leading Medical Device Suppliers By Product Area (% Distribution) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Table: Top 20 Medical Device Suppliers (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Table: Detailed Medical Device Imports By Product Area, 2008-2012 (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Table: Detailed Medical Device Import Trends By Product Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Table: Detailed Leading Medical Device Suppliers By Product Area (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Monthly Medical Device Imports ................................................................................................................ 80 Table: Monthly Medical Device Imports By Product Area, September 2010-October 2013 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Annual Medical Device Exports ................................................................................................................. 83 Table: Medical Device Exports By Product Area, 2008-2012 (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Table: Medical Device Exports By Product Area, 2008-2012 (US$000s, % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Table: Medical Device Exports By Product Area, 2008-2012 (Local Currency 000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Table: Medical Device Exports By Product Area, 2008-2012 (Local Currency 000s, % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Table: Medical Device Exports By Product Area, 2008-2012 (% Distribution) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Table: Leading Medical Device Destinations By Product Area (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Table: Leading Medical Device Destinations By Product Area (% Distribution) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Table: Top 20 Medical Device Destinations (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Table: Detailed Medical Device Exports By Product Area, 2008-2012 (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Table: Detailed Medical Device Export Trends By Product Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Table: Detailed Leading Medical Device Destinations By Product Area (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Table: Detailed Medical Device Balance Of Trade, 2008-2012 (US$000s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Monthly Medical Device Exports .............................................................................................................. 106 Table: Monthly Medical Device Exports By Product Area, September 2010-October 2013 (US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Macroeconomic Forecasts ............................................................................................. 108 Ongoing Misallocation Of Capital Increases Risks ..................................................................................... 110 Increasing Pressures For Greater Macro-Prudential Rules .......................................................................... 111 Table: Australia - Economic Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Industry Risk Reward Ratings ........................................................................................ 114 Table: Asia Pacific Medical Device Risk/Reward Ratings, Q214 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Market Overview ............................................................................................................. 116 Medical Device Market Overview ............................................................................................................. 116 Table: Medical Device Market, Key Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Table: Medical Device Market By Product Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Healthcare Overview .............................................................................................................................. 119 Health Status ....................................................................................................................................... 119 Healthcare System ................................................................................................................................ 119 Healthcare Funding .............................................................................................................................. 121 Healthcare Resources ........................................................................................................................... 122 Table: Diagnostic Imaging Technology By Type, 2006-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Table: Diagnostic Imaging Technology Per Million Population By Type, 2006-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Healthcare Activity ............................................................................................................................... 124 Healthcare Personnel ........................................................................................................................... 124 Key Data ............................................................................................................................................ 124 Table: Key Data, 2008-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

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Industry Trends & Developments .................................................................................. 127 Industry Trends & Developments .............................................................................................................. 127

Regulatory Development ................................................................................................ 132 Medical Device Regulations .................................................................................................................... Competent Authority ............................................................................................................................. Regulations ......................................................................................................................................... Australia New Zealand Therapeutic Products Authority ..............................................................................

132 132 132 134

Competitive Landscape .................................................................................................. 136 Domestic Medical Device Production ........................................................................................................ National Medical Device Manufacturers .................................................................................................... Multinational Medical Device Manufacturers ............................................................................................. Multinational Market Activity ..................................................................................................................

136 136 140 142

Table: Multinational Market Activity, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Methodology .................................................................................................................... 144 Medical Device Market Methodology ....................................................................................................... 144 Trade Code Classifications .................................................................................................................... 145 Table: Used HS Trade Codes, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Table: Rearranged HS Trade Codes, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Risk/Reward Ratings Methodology .......................................................................................................... 150 Table: Medical Devices Risk/Reward Ratings Indicators, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Sources .............................................................................................................................................. 152 Contact .............................................................................................................................................. 153

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Espicom Industry View Espicom Industry View: The Australian market has performed well in recent years, driven by a stronglygrowing economy and the requirements of an increasingly elderly population. However, a weakening of the Australian dollar over the next five years is expected to bring the momentum in the market to a halt.

Headline Industry Forecasts ■

At US$4.8bn, the market ranks amongst the top 20 largest in the world, while per capita spending is on a par with European markets such as the Netherlands or Finland. Growth for the 2013-2018 period is expected to be subdued; estimated at a CAGR of 0.1% in US$ terms which will raise the market to US $4,836.5mn by 2018.

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Since 2001, medical device imports have seen a period of sustained rapid growth. In 2012, imports reached a new high of US$4,523.6mn, rising by 3.9% over 2011. In CAGR terms, growth was 10.8% between 2007 and 2012. The running annual total reached US$4.6bn in the 12 months to October 2013, representing y-on-y growth of 2.2%.

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Medical device exports bounced back strongly from the dip in 2009, recording strong growth over the 2010-2012 period. In 2012, exports rose by 10.5% to reach US$1,696.0mn. The running annual total reached US$1.7bn in the 12 months to October 2013, representing y-on-y growth of 1.7%. In 2012, the balance of trade deficit edged up to US$2,828mn.

• Australia has a large number of small manufacturers, mostly making hospital consumables and supplies. Production is generally high quality, but low tech; advanced products are almost always imported. The majority of production is consumed locally.

Headline Industry Risk/Reward Rating ■

Australia is the most attractive market in the Asia Pacific region for commercialising a medical device, according to BMI Espicom's Medical Device Risk/Reward Ratings (RRRs). The country's overall score for Q214 is 75.8 out of 100, which is marginally ahead of Japan (75.7).

Headline Healthcare Overview ■

Australia's population stands at over 23mn and is currently growing at an annual rate of 1.3%. The population aged 65 years and over represents 14.3% of the total and Australian life expectancy is amongst the world's highest at 80.0 years for men and 84.5 years for women.

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In 2013, Espicom estimates Australian healthcare expenditure at US$138.1bn, equal to US$5,917 per capita. Australia has long had a relatively high level of health spending and in 2013 it stood at 9.1% of GDP, having grown at a CAGR of 0.6% over the 2008-2013 period. Spending in US$ per capita terms has doubled since 2003.

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The number of hospitals is increasing, with an additional nine opening in 2013 to take the total to 1,363. The number of hospital beds remains steady at 3.8 per thousand population. The number of doctors is also rising in line with population growth, reaching almost 80,000 in 2013, a rate of 3.4 physicians per thousand population.

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Headline Industry Trends & Developments ■

Medical device imports grew by 1.2% in US dollar terms in the three months to October 2013, with growth led by the patient aids and orthopaedics & prosthetics segments which grew by 15.1% and 4.1% respectively.

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Medical device exports grew by 1.7% in US dollar terms in the three months to October 2013, with growth led by a 17.2% increase in the other medical devices segment.

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In August 2011, after months of negotiation, the Commonwealth Government signed an agreement with all States and Territories to formalise the National Health Reform plan. Designed to improve funding to hospitals and to reduce patient waiting times, the plan will see the Commonwealth Government invest at least A$16.4bn (US$16.0bn) in additional funding for public hospitals over the period 2014-15 to 2019-20. The Commonwealth Government will match 45% of efficient growth funding from July 2014, and 50% of efficient growth from July 2017.

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According to the MTAA (Medical Technology Association of Australia), the Australian industry includes over 500 medical technology companies with products listed on the Australian Register of Therapeutic Goods (ARTG). It employs around 19,000 people with turnover of around A$10.8bn in 2010-11, although this includes distribution activity.

BMI Political View: A Newspoll's December 8 popularity poll reflected the significant decline in the popularity of Liberal-National Coalition and Prime Minister Tony Abbott since they were elected into parliament on September 7 2013. The lack of progress on items such as carbon tax and mineral resource rent tax (although largely due to opposition parties holding the agenda hostage) have certainly shook voters' confidence in the new government to deliver and weighed on the party's popularity. While these polls have no consequence on the government's decisions or policies, further declines in popularity could reignite internal struggles within the coalition and cause more policy paralysis. BMI Economic View: Several domestic and external factors have served to boost the level of economic activity in Australia. While BMI revised its GDP growth forecasts for 2014 to 2.0% from 1.8% previously, this change masks its concerns for the ever-growing risks within the Australian economy. Given that an increasing proportion of capital is being invested in the housing sector despite the weak performance of business spending, (a turnaround in which is required to generate wage growth), this misallocation of capital increases the economy's vulnerability to external shocks, on top of the ongoing weakness in the mining sector.

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SWOT Medical Device Market SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

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One of world's top 20 medical device markets

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High per capita spending

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Market is predominantly supplied by imports

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Universal health coverage

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An ageing and affluent population

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Market fragmentation due to vast geographic size

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Market limited by population size

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Receptive to new technologies

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Strong academic R&D community

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Government support for manufacturing sector

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Imports rising

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National Health Reform plan supporting investment in healthcare

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Continued focus on cost containment in the public healthcare sector

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Political SWOT Analysis

Strengths

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Australia is a mature democracy with a broadly stable party system.

■

Economic stability over recent years supports the current political system and radical groups are unlikely to gain substantial support.

Weaknesses

■

As one of the region's largest and most stable states, the country attracts many refugees and economic migrants. The issue is a key source of domestic tension and has been hotly debated in parliament in recent times as the capsizing of a boat led to the death of a number of refugees. The issue continues to be debated in the federal parliament with no sign of political parties co-operating to find an alternative that would ensure the safe passage and fair processing of the refugees, while reducing the possibility of people smuggling.

■

The fragility of the state governments' finances compared to the large infrastructure projects that they need to undertake has led to questions with regards to the compatibility of the federal-state system with the country's current development needs.

Opportunities

■

Australia has historically enjoyed close military ties with the US. However, with the rise of regional economic powers such as China, it will need to balance competing military and economic ties.

Threats

■

Australia's early support for the US 'War on Terror', among other things, has made Australians abroad a target for Islamic extremists.

■

Australia's close alliance with the US, particularly under John Howard, has left a lingering feeling among some Asian governments that it is America's 'deputy sheriff' in the region.

© Espicom Business Intelligence

Page 10

Australia Medical Devices Report Q2 2014

Economic SWOT Analysis

Strengths

■

A free-market economy supported by a highly educated workforce.

■

Blessed with rich natural resources, Australia's economic activity has been augmented by demand for commodity exports and the investments made in the mining sector.

Weaknesses

■

The persistent current account deficit increases vulnerability to capital flows and, by extension, currency volatility.

■

The export basket is highly concentrated in commodities, and consequently exposes the economy and currency to fluctuations in world prices for metals, coal and agricultural goods.

Opportunities

■

The rapid expansion of Asian economies in recent years offers new opportunities for diversifying trading ties from core European markets.

■

A low level of government debt has provided a certain amount of flexibility in fiscal policy to support domestic demand through the downturn.

Threats

■

The high level of private sector debt - especially mortgage loans - fuelled by overseas funding poses a threat to sustained growth.

■

A collapse in exports from a drop in resource demand from China and other resourcehungry countries would severely impact headline GDP growth.

■

Australia is vulnerable to extreme weather that may lead to droughts and floods, which have become increasingly severe in past years as a result of global climate change.

© Espicom Business Intelligence

Page 11

Australia Medical Devices Report Q2 2014

Business Environment SWOT Analysis

Strengths

■

A highly educated workforce and comparatively modern transport infrastructure underpin economic prospects.

■

A number of free trade agreements with countries such as New Zealand, Thailand and the US serve as a boon for trading activities.

Weaknesses

■

Despite its openness, Australia requires the Foreign Investment Review Board to approve any commercial real estate investment by a foreign company or individual valued at US$5mn or more.

■

With a population of just over 22mn, the domestic consumer base is small by regional standards.

Opportunities

■

Australia is currently in talks with China, Malaysia, the Gulf Co-operation Council, Indonesia, India, Japan and South Korea regarding potential bilateral free trade agreements. It is also part of negotiations for the Trans-Pacific Partnership and a regional south pacific pact, PACER plus.

■

Upgrade and expansion of urban infrastructure will be needed to sustain population growth in Australia's main cities, providing opportunities for public-private partnerships in the future. The government is also targeting infrastructure improvements to rural areas.

■

More healthcare infrastructure will be needed to support the ageing population, and with the introduction of the federal government's National Disability Insurance Scheme, the industry is likely to see increasing demand for services.

Threats

■

Corporate taxes for foreign investors in Australia remain higher than in other countries, and it seems unlikely that the government will succeed to reduce the rates in the near future.

■

Recent investment proposals by Chinese firms regarding the agricultural and resource extraction sector have raised fears that strategic assets will be lost to foreign players. This has led to more conditions attached to the sale agreements, which is likely to

© Espicom Business Intelligence

Page 12

Australia Medical Devices Report Q2 2014

SWOT Analysis - Continued

reduce the attractiveness of these assets. It remains to be seen if the recent implementation of a database to increase transparency around foreign-owned Australian assets will spur more regulation.

© Espicom Business Intelligence

Page 13

Australia Medical Devices Report Q2 2014

Industry Forecast Medical Device Market Forecast Past Performance 2008-2013

The Australian market has performed well in recent years, driven by a strongly-growing economy and the requirements of an increasingly elderly population. Growth for the 2008-2013 period is estimated at a CAGR of 7.8% in US$ terms, but 4.0% when measured in Australian dollars. Strong growth, of 15.9% and 18.2% was recorded in 2010 and 2011, but this was primarily a result of exchange rate volatility.

Medical Device Market, 2009-2018 % Change

Source: BMI Espicom

© Espicom Business Intelligence

Page 14

Australia Medical Devices Report Q2 2014

CAGR Of The Historical Medical Device Market By Product Area %

Source: BMI Espicom

Future Performance 2013-2018

A weakening of the Australian dollar over the next five years is expected to result in a reversal of the growth trend experienced over the 2008-2012 period, with the market projected to stagnate in US dollar terms, but growing by 6.0% when measured in local currency.

A CAGR for 2013-2018 of 0.1% is projected to take the overall market to US$4,836.5mn by 2018, equal to US$196 per capita. This will place Australia amongst the top 20 largest markets in the world by 2018.

© Espicom Business Intelligence

Page 15

Australia Medical Devices Report Q2 2014

Table: Projected Medical Device Market, 2013-2018

Total (US$mn)

Per Capita (US$)

Total (Local Currency mn)

Per Capita (Local Currency)

2013

4,814.3

207.4

4,815.7

207.5

2014

4,542.0

193.3

5,074.9

215.9

2015

4,246.5

178.5

5,375.3

225.9

2016

4,278.5

177.6

5,704.6

236.8

2017

4,547.9

186.5

6,063.9

248.7

2018

4,836.5

196.0

6,448.7

261.4

Source: BMI Espicom

Projected Medical Device Market, 2013-2018 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

Page 16

Australia Medical Devices Report Q2 2014

CAGR Of The Projected Medical Device Market By Product Area , 2013-2018 %

Source: BMI Espicom

Table: Detailed Medical Device Market By Product Area, 2008-2018 (US$mn)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CONSUMABLES

457.5

468.1

529.4

649.0

648.4

646.8

598.3

548.5

542.0

565.2

589.9

BANDAGES & DRESSINGS

114.5

112.5

138.6

189.0

151.0

150.0

138.1

125.9

123.7

128.1

132.6

Medical dressings (adhesive)

50.6

48.4

56.6

71.1

70.1

70.5

65.7

60.6

60.3

63.2

66.2

Medical dressings (nonadhesive)

64.0

64.1

82.0

117.8

80.9

79.5

72.4

65.3

63.4

64.9

66.4

SUTURING MATERIALS

61.5

60.2

62.1

76.7

92.7

95.4

90.9

85.7

87.0

93.2

99.8

© Espicom Business Intelligence

Page 17

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (US$mn) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

257.1

256.9

263.4

307.4

327.3

322.7

294.8

266.7

260.0

267.3

274.8

Syringes (with/without needles)

36.4

45.5

47.5

52.0

51.9

52.6

49.3

45.9

45.9

48.5

51.2

Tubular metal needles/ needles for sutures

28.5

32.4

30.7

36.2

38.4

38.4

35.6

32.7

32.3

33.7

35.1

Other needles, catheters, cannulae etc

192.1

179.1

185.2

219.2

237.0

231.7

209.8

188.2

181.8

185.1

188.5

OTHER CONSUMABLES

24.4

38.5

65.3

75.9

77.4

78.8

74.6

70.2

71.3

76.6

82.7

Blood-grouping reagents

6.5

4.3

4.9

6.8

5.5

5.4

5.0

4.5

4.4

4.5

4.7

First-aid boxes & kits

2.9

2.4

3.7

4.6

6.9

8.0

8.6

9.1

10.4

12.6

15.2

Ostomy products

0.9

18.3

36.9

36.8

41.4

40.5

36.7

33.0

31.9

32.5

33.2

14.1

13.4

19.8

27.6

23.5

24.9

24.3

23.5

24.6

27.0

29.7

DIAGNOSTIC IMAGING

498.0

510.5

587.4

640.5

726.3

735.2

690.0

641.6

642.9

679.8

719.1

ELECTRODIAGNOSTIC APPARATUS

242.2

252.9

288.0

313.0

328.6

335.9

318.3

298.8

302.3

322.8

344.7

9.9

10.0

13.3

15.5

15.1

15.6

14.9

14.0

14.3

15.3

16.5

Ultrasound

76.7

80.7

84.2

90.6

89.5

89.8

83.4

76.8

76.2

79.6

83.2

MRI

27.4

46.3

52.2

56.0

72.8

77.5

76.5

74.7

78.5

87.0

96.4

Scintigraphic apparatus

2.2

1.7

4.0

3.5

4.1

4.4

4.4

4.4

4.6

5.2

5.9

Other electrodiagnostic apparatus

126.0

114.3

134.3

147.4

147.2

148.6

139.1

129.0

128.8

135.6

142.7

RADIATION APPARATUS

119.5

128.3

147.8

154.1

218.9

221.9

208.4

193.9

194.3

205.5

217.4

CT scanners

23.7

32.8

43.6

64.3

93.4

97.1

93.5

89.1

91.5

99.0

107.1

Other medical x-ray apparatus

88.0

94.1

101.4

86.6

116.9

116.3

107.3

97.9

96.2

99.7

103.4

7.8

1.4

2.8

3.2

8.6

8.4

7.6

6.9

6.7

6.8

6.9

136.3

129.3

151.6

173.4

178.7

177.4

163.3

148.9

146.2

151.5

157.0

Contrast media

26.8

25.2

31.1

32.1

33.9

33.3

30.3

27.3

26.5

27.2

27.8

Medical x-ray film (flat)

21.0

22.0

23.4

25.5

23.5

22.4

19.8

17.3

16.3

16.1

16.0

SYRINGES, NEEDLES & CATHETERS

Surgical gloves

Electrocardiographs

A, B, C ray apparatus

IMAGING PARTS & ACCESSORIES

© Espicom Business Intelligence

Page 18

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (US$mn) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

0.3

0.2

0.2

0.2

0.4

0.4

0.4

0.3

0.4

0.4

0.4

X-ray tubes

16.8

18.5

19.9

21.5

24.8

25.3

24.0

22.5

22.7

24.2

25.7

Other imaging parts & accessories

71.4

63.4

77.1

94.1

96.1

96.0

88.8

81.4

80.4

83.7

87.1

DENTAL PRODUCTS

172.2

186.8

205.1

226.0

240.0

247.1

236.2

224.0

229.2

247.7

268.1

CAPITAL EQUIPMENT

20.3

25.6

35.7

28.4

28.8

30.1

29.1

27.9

28.9

31.5

34.4

Dental drills

1.7

3.1

3.5

2.4

2.1

2.0

1.8

1.6

1.6

1.6

1.6

Dental chairs

8.6

8.5

12.7

10.2

9.2

9.3

8.6

7.9

7.9

8.2

8.6

Dental x-ray

9.9

14.0

19.5

15.8

17.5

18.8

18.7

18.3

19.4

21.7

24.2

151.9

161.2

169.4

197.7

211.2

217.1

207.1

196.0

200.3

216.1

233.7

Dental cements

32.2

34.2

37.0

53.6

59.8

64.3

64.2

63.5

67.7

76.0

85.4

Dental instruments

74.0

81.6

78.0

87.1

92.5

90.7

82.4

74.2

71.9

73.5

75.1

Teeth & other fittings

45.7

45.3

54.4

57.0

59.0

62.0

60.4

58.3

60.7

66.6

73.1

5.3

5.5

11.4

12.5

13.5

13.6

12.6

11.6

11.5

12.1

12.6

Other dental fittings

40.4

39.8

43.0

44.5

45.4

48.4

47.8

46.7

49.1

54.5

60.5

ORTHOPAEDICS & PROSTHETICS

539.8

557.2

656.7

850.6

835.0

864.7

829.8

788.3

806.7

870.5

939.5

FIXATION DEVICES

141.2

110.4

134.4

219.9

201.5

204.2

191.8

178.3

178.5

188.5

198.9

ARTIFICIAL JOINTS

171.0

156.6

194.2

245.0

280.2

294.4

286.6

276.2

286.6

313.5

343.0

OTHER ARTIFICIAL BODY PARTS

227.6

290.2

328.0

385.7

353.3

366.0

351.3

333.8

341.6

368.5

397.6

PATIENT AIDS

626.8

551.6

682.5

810.0

787.8

792.1

738.8

683.6

681.7

717.2

755.0

PORTABLE AIDS

475.3

408.5

470.3

576.4

563.1

562.5

521.1

478.7

473.9

494.8

516.8

Hearing aids

111.8

96.4

116.8

143.4

138.1

139.0

129.8

120.6

120.7

127.4

134.4

Pacemakers

121.5

116.6

130.9

147.2

177.8

181.5

171.6

160.6

161.9

172.0

182.8

Other portable aids

242.1

195.5

222.6

285.8

247.1

242.0

219.6

197.5

191.3

195.4

199.6

Medical x-ray film (rolled)

INSTRUMENTS & SUPPLIES

Artificial teeth

© Espicom Business Intelligence

Page 19

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (US$mn) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

151.4

143.1

212.2

233.6

224.7

229.7

217.8

204.9

207.8

222.4

238.2

Mechano-therapy apparatus

63.8

54.0

61.3

70.2

81.2

80.0

73.0

65.9

64.1

65.7

67.4

Therapeutic respiration apparatus

87.7

89.1

150.9

163.4

143.5

149.7

144.8

139.0

143.7

156.6

170.7

THERAPEUTIC APPLIANCES

OTHERS

1,011.8 1,054.0 1,195.3 1,381.0 1,493.9 1,528.3 1,448.9 1,360.6 1,376.1 1,467.5 1,564.9

WHEELCHAIRS

26.5

24.4

28.0

31.2

32.2

32.7

30.7

28.7

28.8

30.5

32.4

Wheelchairs, not mechanically propelled

11.2

10.0

10.7

12.9

13.4

14.1

13.6

13.1

13.5

14.7

16.1

Wheelchairs, mechanically propelled

15.3

14.4

17.3

18.3

18.8

18.6

17.1

15.6

15.3

15.8

16.3

OPHTHALMIC INSTRUMENTS

65.1

65.8

68.5

85.3

96.5

98.8

93.7

88.0

89.0

95.0

101.3

HOSPITAL FURNITURE

41.0

35.0

41.6

50.1

58.6

59.5

55.9

52.0

52.1

55.0

58.1

MEDICAL, SURGICAL STERILISERS

16.5

17.3

18.9

20.3

22.4

22.5

20.9

19.2

19.0

19.8

20.7

1.8

1.5

2.4

2.3

4.0

4.2

4.0

3.8

3.9

4.3

4.6

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

OTHER INSTRUMENTS & APPLIANCES Anaesthetic apparatus and instruments

TOTAL

860.9 86.5

910.0 1,035.9 1,191.8 1,280.1 1,310.8 1,243.8 1,169.0 1,183.3 1,262.9 1,347.7 91.4

98.4

96.2

120.7

121.7

113.7

105.1

104.7

109.9

115.3

3,306.0 3,328.2 3,856.4 4,557.1 4,731.4 4,814.3 4,542.0 4,246.5 4,278.5 4,547.9 4,836.5

Source: BMI Espicom

© Espicom Business Intelligence

Page 20

Australia Medical Devices Report Q2 2014

Table: Detailed Medical Device Market By Product Area, 2008-2018 (US$ Per Capita)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

21.3

21.4

23.8

28.7

28.3

27.9

25.5

23.1

22.5

23.2

23.9

BANDAGES & DRESSINGS

5.3

5.1

6.2

8.4

6.6

6.5

5.9

5.3

5.1

5.3

5.4

Medical dressings (adhesive)

2.3

2.2

2.5

3.1

3.1

3.0

2.8

2.5

2.5

2.6

2.7

Medical dressings (nonadhesive)

3.0

2.9

3.7

5.2

3.5

3.4

3.1

2.7

2.6

2.7

2.7

SUTURING MATERIALS

2.9

2.7

2.8

3.4

4.0

4.1

3.9

3.6

3.6

3.8

4.0

SYRINGES, NEEDLES & CATHETERS

11.9

11.7

11.8

13.6

14.3

13.9

12.5

11.2

10.8

11.0

11.1

Syringes (with/without needles)

1.7

2.1

2.1

2.3

2.3

2.3

2.1

1.9

1.9

2.0

2.1

Tubular metal needles/ needles for sutures

1.3

1.5

1.4

1.6

1.7

1.7

1.5

1.4

1.3

1.4

1.4

Other needles, catheters, cannulae etc

8.9

8.2

8.3

9.7

10.3

10.0

8.9

7.9

7.5

7.6

7.6

OTHER CONSUMABLES

1.1

1.8

2.9

3.4

3.4

3.4

3.2

2.9

3.0

3.1

3.4

Blood-grouping reagents

0.3

0.2

0.2

0.3

0.2

0.2

0.2

0.2

0.2

0.2

0.2

First-aid boxes & kits

0.1

0.1

0.2

0.2

0.3

0.3

0.4

0.4

0.4

0.5

0.6

Ostomy products

0.0

0.8

1.7

1.6

1.8

1.7

1.6

1.4

1.3

1.3

1.3

Surgical gloves

0.7

0.6

0.9

1.2

1.0

1.1

1.0

1.0

1.0

1.1

1.2

DIAGNOSTIC IMAGING

23.1

23.3

26.4

28.3

31.7

31.7

29.4

27.0

26.7

27.9

29.1

ELECTRODIAGNOSTIC APPARATUS

11.3

11.5

12.9

13.8

14.3

14.5

13.5

12.6

12.6

13.2

14.0

Electrocardiographs

0.5

0.5

0.6

0.7

0.7

0.7

0.6

0.6

0.6

0.6

0.7

Ultrasound

3.6

3.7

3.8

4.0

3.9

3.9

3.5

3.2

3.2

3.3

3.4

MRI

1.3

2.1

2.3

2.5

3.2

3.3

3.3

3.1

3.3

3.6

3.9

Scintigraphic apparatus

0.1

0.1

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

CONSUMABLES

© Espicom Business Intelligence

Page 21

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (US$ Per Capita) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Other electrodiagnostic apparatus

5.9

5.2

6.0

6.5

6.4

6.4

5.9

5.4

5.3

5.6

5.8

RADIATION APPARATUS

5.6

5.9

6.6

6.8

9.6

9.6

8.9

8.1

8.1

8.4

8.8

CT scanners

1.1

1.5

2.0

2.8

4.1

4.2

4.0

3.7

3.8

4.1

4.3

Other medical x-ray apparatus

4.1

4.3

4.6

3.8

5.1

5.0

4.6

4.1

4.0

4.1

4.2

A, B, C ray apparatus

0.4

0.1

0.1

0.1

0.4

0.4

0.3

0.3

0.3

0.3

0.3

IMAGING PARTS & ACCESSORIES

6.3

5.9

6.8

7.7

7.8

7.6

6.9

6.3

6.1

6.2

6.4

Contrast media

1.2

1.2

1.4

1.4

1.5

1.4

1.3

1.1

1.1

1.1

1.1

Medical x-ray film (flat)

1.0

1.0

1.0

1.1

1.0

1.0

0.8

0.7

0.7

0.7

0.6

Medical x-ray film (rolled)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

X-ray tubes

0.8

0.8

0.9

1.0

1.1

1.1

1.0

0.9

0.9

1.0

1.0

Other imaging parts & accessories

3.3

2.9

3.5

4.2

4.2

4.1

3.8

3.4

3.3

3.4

3.5

DENTAL PRODUCTS

8.0

8.5

9.2

10.0

10.5

10.6

10.0

9.4

9.5

10.2

10.9

CAPITAL EQUIPMENT

0.9

1.2

1.6

1.3

1.3

1.3

1.2

1.2

1.2

1.3

1.4

Dental drills

0.1

0.1

0.2

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

Dental chairs

0.4

0.4

0.6

0.5

0.4

0.4

0.4

0.3

0.3

0.3

0.3

Dental x-ray

0.5

0.6

0.9

0.7

0.8

0.8

0.8

0.8

0.8

0.9

1.0

INSTRUMENTS & SUPPLIES

7.1

7.4

7.6

8.7

9.2

9.4

8.8

8.2

8.3

8.9

9.5

Dental cements

1.5

1.6

1.7

2.4

2.6

2.8

2.7

2.7

2.8

3.1

3.5

Dental instruments

3.4

3.7

3.5

3.9

4.0

3.9

3.5

3.1

3.0

3.0

3.0

Teeth & other fittings

2.1

2.1

2.4

2.5

2.6

2.7

2.6

2.5

2.5

2.7

3.0

Artificial teeth

0.2

0.3

0.5

0.6

0.6

0.6

0.5

0.5

0.5

0.5

0.5

Other dental fittings

1.9

1.8

1.9

2.0

2.0

2.1

2.0

2.0

2.0

2.2

2.5

ORTHOPAEDICS & PROSTHETICS

25.1

25.4

29.5

37.6

36.4

37.2

35.3

33.1

33.5

35.7

38.1

© Espicom Business Intelligence

Page 22

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (US$ Per Capita) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

FIXATION DEVICES

6.6

5.0

6.0

9.7

8.8

8.8

8.2

7.5

7.4

7.7

8.1

ARTIFICIAL JOINTS

7.9

7.1

8.7

10.8

12.2

12.7

12.2

11.6

11.9

12.9

13.9

OTHER ARTIFICIAL BODY PARTS

10.6

13.3

14.7

17.1

15.4

15.8

14.9

14.0

14.2

15.1

16.1

PATIENT AIDS

29.1

25.2

30.6

35.8

34.4

34.1

31.4

28.7

28.3

29.4

30.6

PORTABLE AIDS

22.1

18.7

21.1

25.5

24.6

24.2

22.2

20.1

19.7

20.3

20.9

Hearing aids

5.2

4.4

5.2

6.3

6.0

6.0

5.5

5.1

5.0

5.2

5.4

Pacemakers

5.6

5.3

5.9

6.5

7.8

7.8

7.3

6.8

6.7

7.1

7.4

11.3

8.9

10.0

12.6

10.8

10.4

9.3

8.3

7.9

8.0

8.1

THERAPEUTIC APPLIANCES

7.0

6.5

9.5

10.3

9.8

9.9

9.3

8.6

8.6

9.1

9.7

Mechano-therapy apparatus

3.0

2.5

2.8

3.1

3.5

3.4

3.1

2.8

2.7

2.7

2.7

Therapeutic respiration apparatus

4.1

4.1

6.8

7.2

6.3

6.4

6.2

5.8

6.0

6.4

6.9

47.0

48.1

53.7

61.1

65.2

65.8

61.6

57.2

57.1

60.2

63.4

WHEELCHAIRS

1.2

1.1

1.3

1.4

1.4

1.4

1.3

1.2

1.2

1.3

1.3

Wheelchairs, not mechanically propelled

0.5

0.5

0.5

0.6

0.6

0.6

0.6

0.5

0.6

0.6

0.7

Wheelchairs, mechanically propelled

0.7

0.7

0.8

0.8

0.8

0.8

0.7

0.7

0.6

0.6

0.7

OPHTHALMIC INSTRUMENTS

3.0

3.0

3.1

3.8

4.2

4.3

4.0

3.7

3.7

3.9

4.1

HOSPITAL FURNITURE

1.9

1.6

1.9

2.2

2.6

2.6

2.4

2.2

2.2

2.3

2.4

MEDICAL, SURGICAL STERILISERS

0.8

0.8

0.8

0.9

1.0

1.0

0.9

0.8

0.8

0.8

0.8

Other portable aids

OTHERS

© Espicom Business Intelligence

Page 23

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (US$ Per Capita) - Continued

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

OTHER INSTRUMENTS & APPLIANCES Anaesthetic apparatus and instruments

TOTAL

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

0.1

0.1

0.1

0.1

0.2

0.2

0.2

0.2

0.2

0.2

0.2

40.0

41.5

46.5

52.7

55.9

56.5

52.9

49.1

49.1

51.8

54.6

4.0

4.2

4.4

4.3

5.3

5.2

4.8

4.4

4.3

4.5

4.7

153.7

152.0

173.2

201.6

206.4

207.4

193.3

178.5

177.6

186.5

196.0

Source: BMI Espicom

Table: Detailed Medical Device Market By Product Area, 2008-2018 (% Of Total)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

13.8

14.1

13.7

14.2

13.7

13.4

13.2

12.9

12.7

12.4

12.2

BANDAGES & DRESSINGS

3.5

3.4

3.6

4.1

3.2

3.1

3.0

3.0

2.9

2.8

2.7

Medical dressings (adhesive)

1.5

1.5

1.5

1.6

1.5

1.5

1.4

1.4

1.4

1.4

1.4

Medical dressings (nonadhesive)

1.9

1.9

2.1

2.6

1.7

1.7

1.6

1.5

1.5

1.4

1.4

SUTURING MATERIALS

1.9

1.8

1.6

1.7

2.0

2.0

2.0

2.0

2.0

2.0

2.1

SYRINGES, NEEDLES & CATHETERS

7.8

7.7

6.8

6.7

6.9

6.7

6.5

6.3

6.1

5.9

5.7

Syringes (with/without needles)

1.1

1.4

1.2

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

Tubular metal needles/ needles for sutures

0.9

1.0

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.7

0.7

Other needles, catheters, cannulae etc

5.8

5.4

4.8

4.8

5.0

4.8

4.6

4.4

4.2

4.1

3.9

CONSUMABLES

© Espicom Business Intelligence

Page 24

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (% Of Total) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

OTHER CONSUMABLES

0.7

1.2

1.7

1.7

1.6

1.6

1.6

1.7

1.7

1.7

1.7

Blood-grouping reagents

0.2

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

First-aid boxes & kits

0.1

0.1

0.1

0.1

0.1

0.2

0.2

0.2

0.2

0.3

0.3

Ostomy products

0.0

0.5

1.0

0.8

0.9

0.8

0.8

0.8

0.7

0.7

0.7

Surgical gloves

0.4

0.4

0.5

0.6

0.5

0.5

0.5

0.6

0.6

0.6

0.6

DIAGNOSTIC IMAGING

15.1

15.3

15.2

14.1

15.3

15.3

15.2

15.1

15.0

14.9

14.9

ELECTRODIAGNOSTIC APPARATUS

7.3

7.6

7.5

6.9

6.9

7.0

7.0

7.0

7.1

7.1

7.1

Electrocardiographs

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

Ultrasound

2.3

2.4

2.2

2.0

1.9

1.9

1.8

1.8

1.8

1.8

1.7

MRI

0.8

1.4

1.4

1.2

1.5

1.6

1.7

1.8

1.8

1.9

2.0

Scintigraphic apparatus

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

Other electrodiagnostic apparatus

3.8

3.4

3.5

3.2

3.1

3.1

3.1

3.0

3.0

3.0

3.0

RADIATION APPARATUS

3.6

3.9

3.8

3.4

4.6

4.6

4.6

4.6

4.5

4.5

4.5

CT scanners

0.7

1.0

1.1

1.4

2.0

2.0

2.1

2.1

2.1

2.2

2.2

Other medical x-ray apparatus

2.7

2.8

2.6

1.9

2.5

2.4

2.4

2.3

2.2

2.2

2.1

A, B, C ray apparatus

0.2

0.0

0.1

0.1

0.2

0.2

0.2

0.2

0.2

0.1

0.1

IMAGING PARTS & ACCESSORIES

4.1

3.9

3.9

3.8

3.8

3.7

3.6

3.5

3.4

3.3

3.2

Contrast media

0.8

0.8

0.8

0.7

0.7

0.7

0.7

0.6

0.6

0.6

0.6

Medical x-ray film (flat)

0.6

0.7

0.6

0.6

0.5

0.5

0.4

0.4

0.4

0.4

0.3

Medical x-ray film (rolled)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

X-ray tubes

0.5

0.6

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

0.5

Other imaging parts & accessories

2.2

1.9

2.0

2.1

2.0

2.0

2.0

1.9

1.9

1.8

1.8

DENTAL PRODUCTS

5.2

5.6

5.3

5.0

5.1

5.1

5.2

5.3

5.4

5.4

5.5

© Espicom Business Intelligence

Page 25

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (% Of Total) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAPITAL EQUIPMENT

0.6

0.8

0.9

0.6

0.6

0.6

0.6

0.7

0.7

0.7

0.7

Dental drills

0.1

0.1

0.1

0.1

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Dental chairs

0.3

0.3

0.3

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

Dental x-ray

0.3

0.4

0.5

0.3

0.4

0.4

0.4

0.4

0.5

0.5

0.5

INSTRUMENTS & SUPPLIES

4.6

4.8

4.4

4.3

4.5

4.5

4.6

4.6

4.7

4.8

4.8

Dental cements

1.0

1.0

1.0

1.2

1.3

1.3

1.4

1.5

1.6

1.7

1.8

Dental instruments

2.2

2.5

2.0

1.9

2.0

1.9

1.8

1.7

1.7

1.6

1.6

Teeth & other fittings

1.4

1.4

1.4

1.3

1.2

1.3

1.3

1.4

1.4

1.5

1.5

Artificial teeth

0.2

0.2

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

Other dental fittings

1.2

1.2

1.1

1.0

1.0

1.0

1.1

1.1

1.1

1.2

1.3

ORTHOPAEDICS & PROSTHETICS

16.3

16.7

17.0

18.7

17.6

18.0

18.3

18.6

18.9

19.1

19.4

FIXATION DEVICES

4.3

3.3

3.5

4.8

4.3

4.2

4.2

4.2

4.2

4.1

4.1

ARTIFICIAL JOINTS

5.2

4.7

5.0

5.4

5.9

6.1

6.3

6.5

6.7

6.9

7.1

OTHER ARTIFICIAL BODY PARTS

6.9

8.7

8.5

8.5

7.5

7.6

7.7

7.9

8.0

8.1

8.2

PATIENT AIDS

19.0

16.6

17.7

17.8

16.7

16.5

16.3

16.1

15.9

15.8

15.6

PORTABLE AIDS

14.4

12.3

12.2

12.6

11.9

11.7

11.5

11.3

11.1

10.9

10.7

Hearing aids

3.4

2.9

3.0

3.1

2.9

2.9

2.9

2.8

2.8

2.8

2.8

Pacemakers

3.7

3.5

3.4

3.2

3.8

3.8

3.8

3.8

3.8

3.8

3.8

Other portable aids

7.3

5.9

5.8

6.3

5.2

5.0

4.8

4.7

4.5

4.3

4.1

THERAPEUTIC APPLIANCES

4.6

4.3

5.5

5.1

4.8

4.8

4.8

4.8

4.9

4.9

4.9

Mechano-therapy apparatus

1.9

1.6

1.6

1.5

1.7

1.7

1.6

1.6

1.5

1.4

1.4

Therapeutic respiration apparatus

2.7

2.7

3.9

3.6

3.0

3.1

3.2

3.3

3.4

3.4

3.5

30.6

31.7

31.0

30.3

31.6

31.7

31.9

32.0

32.2

32.3

32.4

OTHERS

© Espicom Business Intelligence

Page 26

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2008-2018 (% Of Total) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

WHEELCHAIRS

0.8

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

Wheelchairs, not mechanically propelled

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

Wheelchairs, mechanically propelled

0.5

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.3

0.3

OPHTHALMIC INSTRUMENTS

2.0

2.0

1.8

1.9

2.0

2.1

2.1

2.1

2.1

2.1

2.1

HOSPITAL FURNITURE

1.2

1.1

1.1

1.1

1.2

1.2

1.2

1.2

1.2

1.2

1.2

MEDICAL, SURGICAL STERILISERS

0.5

0.5

0.5

0.4

0.5

0.5

0.5

0.5

0.4

0.4

0.4

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

0.1

0.0

0.1

0.0

0.1

0.1

0.1

0.1

0.1

0.1

0.1

26.0

27.3

26.9

26.2

27.1

27.2

27.4

27.5

27.7

27.8

27.9

2.6

2.7

2.6

2.1

2.6

2.5

2.5

2.5

2.4

2.4

2.4

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

OTHER INSTRUMENTS & APPLIANCES Anaesthetic apparatus and instruments

TOTAL

Source: BMI Espicom

© Espicom Business Intelligence

Page 27

Australia Medical Devices Report Q2 2014

Table: Detailed Medical Device Market By Product Area, 2009-2018 (US$, % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2.3

13.1

22.6

-0.1

-0.2

-7.5

-8.3

-1.2

4.3

4.4

BANDAGES & DRESSINGS

-1.7

23.2

36.3

-20.1

-0.6

-7.9

-8.8

-1.8

3.6

3.6

Medical dressings (adhesive)

-4.2

16.9

25.6

-1.5

0.6

-6.8

-7.7

-0.6

4.8

4.8

Medical dressings (nonadhesive)

0.2

27.9

43.7

-31.3

-1.7

-8.9

-9.8

-2.9

2.4

2.4

SUTURING MATERIALS

-2.1

3.2

23.5

20.9

2.8

-4.7

-5.7

1.6

7.1

7.1

SYRINGES, NEEDLES & CATHETERS

-0.1

2.5

16.7

6.5

-1.4

-8.6

-9.5

-2.5

2.8

2.8

Syringes (with/without needles)

24.9

4.4

9.5

-0.2

1.3

-6.1

-7.0

0.1

5.6

5.6

Tubular metal needles/ needles for sutures

13.4

-5.0

17.8

6.2

-0.1

-7.4

-8.2

-1.1

4.3

4.2

Other needles, catheters, cannulae etc

-6.8

3.4

18.4

8.1

-2.2

-9.4

-10.3

-3.4

1.9

1.8

OTHER CONSUMABLES

57.7

69.7

16.2

2.0

1.9

-5.3

-6.0

1.6

7.5

7.9

Blood-grouping reagents

-32.8

13.4

38.1

-19.2

-1.2

-8.5

-9.3

-2.3

3.0

3.0

First-aid boxes & kits

-14.8

51.0

24.6

50.5

15.7

7.3

6.2

14.3

20.5

20.5

1,823.6

102.0

-0.1

12.4

-2.2

-9.3

-10.2

-3.3

2.0

2.0

-4.9

47.5

39.7

-14.8

5.6

-2.2

-3.2

4.3

9.9

9.9

DIAGNOSTIC IMAGING

2.5

15.1

9.0

13.4

1.2

-6.2

-7.0

0.2

5.7

5.8

ELECTRODIAGNOSTIC APPARATUS

4.4

13.9

8.7

5.0

2.2

-5.2

-6.1

1.2

6.7

6.8

Electrocardiographs

0.2

33.6

16.3

-2.5

3.0

-4.6

-5.5

1.8

7.3

7.3

Ultrasound

5.2

4.3

7.7

-1.3

0.3

-7.0

-7.9

-0.9

4.5

4.5

69.2

12.8

7.1

30.1

6.5

-1.4

-2.4

5.1

10.9

10.8

Scintigraphic apparatus

-23.5

134.0

-12.8

16.8

8.0

0.0

-1.0

6.6

12.4

12.4

Other electrodiagnostic apparatus

-9.3

17.5

9.8

-0.2

1.0

-6.4

-7.3

-0.1

5.3

5.3

CONSUMABLES

Ostomy products Surgical gloves

MRI

© Espicom Business Intelligence

Page 28

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2009-2018 (US$, % Change) - Continued

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

7.3

15.2

4.3

42.1

1.3

-6.1

-7.0

0.2

5.7

5.8

38.1

33.1

47.3

45.4

3.9

-3.7

-4.7

2.6

8.2

8.2

6.9

7.7

-14.5

35.0

-0.5

-7.8

-8.7

-1.7

3.6

3.6

-81.5

94.8

15.1

166.8

-2.1

-9.3

-10.1

-3.2

2.1

2.1

IMAGING PARTS & ACCESSORIES

-5.1

17.3

14.4

3.0

-0.7

-8.0

-8.8

-1.8

3.6

3.6

Contrast media

-5.9

23.2

3.3

5.5

-1.7

-9.0

-9.9

-2.9

2.3

2.3

4.7

6.4

9.1

-7.8

-4.7

-11.7

-12.6

-5.9

-0.7

-0.7

-28.8

-18.1

29.3

95.0

2.1

-5.4

-6.2

1.0

6.5

6.5

10.1

7.3

8.3

15.2

2.2

-5.3

-6.2

1.0

6.5

6.5

Other imaging parts & accessories

-11.2

21.6

22.0

2.2

-0.1

-7.4

-8.3

-1.3

4.1

4.1

DENTAL PRODUCTS

8.5

9.8

10.2

6.2

2.9

-4.4

-5.2

2.3

8.1

8.3

CAPITAL EQUIPMENT

26.5

39.3

-20.5

1.6

4.3

-3.2

-4.1

3.4

9.2

9.3

Dental drills

77.7

13.8

-32.4

-14.0

-2.3

-9.5

-10.3

-3.4

1.8

1.8

Dental chairs

-1.2

48.3

-19.4

-9.4

0.4

-7.0

-7.9

-0.8

4.6

4.6

Dental x-ray

41.6

39.5

-19.1

11.0

7.2

-0.7

-1.7

5.9

11.6

11.6

INSTRUMENTS & SUPPLIES

6.1

5.1

16.7

6.9

2.8

-4.6

-5.3

2.2

7.9

8.1

Dental cements

6.3

8.0

44.8

11.6

7.7

-0.2

-1.1

6.5

12.3

12.3

Dental instruments

10.3

-4.5

11.7

6.2

-1.9

-9.1

-10.0

-3.1

2.2

2.2

Teeth & other fittings

-0.8

20.0

4.8

3.4

5.1

-2.5

-3.5

4.0

9.7

9.8

4.5

105.6

10.0

8.1

0.4

-7.0

-7.9

-0.8

4.6

4.5

Other dental fittings

-1.5

8.1

3.4

2.1

6.5

-1.3

-2.3

5.2

11.0

10.9

ORTHOPAEDICS & PROSTHETICS

3.2

17.9

29.5

-1.8

3.6

-4.0

-5.0

2.3

7.9

7.9

FIXATION DEVICES

-21.8

21.8

63.6

-8.4

1.4

-6.1

-7.0

0.1

5.6

5.6

ARTIFICIAL JOINTS

-8.4

24.1

26.1

14.4

5.1

-2.6

-3.6

3.8

9.4

9.4

RADIATION APPARATUS CT scanners Other medical x-ray apparatus A, B, C ray apparatus

Medical x-ray film (flat) Medical x-ray film (rolled) X-ray tubes

Artificial teeth

© Espicom Business Intelligence

Page 29

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2009-2018 (US$, % Change) - Continued

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

27.5

13.0

17.6

-8.4

3.6

-4.0

-5.0

2.3

7.9

7.9

PATIENT AIDS

-12.0

23.7

18.7

-2.7

0.5

-6.7

-7.5

-0.3

5.2

5.3

PORTABLE AIDS

-14.1

15.1

22.6

-2.3

-0.1

-7.4

-8.1

-1.0

4.4

4.4

Hearing aids

-13.7

21.1

22.8

-3.7

0.6

-6.6

-7.1

0.1

5.5

5.5

Pacemakers

-4.0

12.3

12.4

20.8

2.1

-5.5

-6.4

0.8

6.3

6.3

-19.2

13.9

28.4

-13.5

-2.1

-9.2

-10.1

-3.1

2.1

2.1

-5.5

48.3

10.1

-3.8

2.2

-5.2

-5.9

1.4

7.0

7.1

-15.4

13.6

14.5

15.8

-1.5

-8.8

-9.7

-2.7

2.6

2.6

Therapeutic respiration apparatus

1.6

69.4

8.3

-12.2

4.3

-3.3

-4.0

3.4

9.0

9.0

OTHERS

4.2

13.4

15.5

8.2

2.3

-5.2

-6.1

1.1

6.6

6.6

-7.9

14.8

11.5

3.2

1.5

-5.9

-6.8

0.5

6.0

6.1

-11.1

7.3

21.0

3.9

4.7

-3.0

-4.0

3.4

9.0

9.0

-5.6

19.9

5.6

2.7

-0.8

-8.1

-9.0

-2.0

3.4

3.4

1.1

4.0

24.6

13.2

2.3

-5.2

-6.1

1.2

6.7

6.7

-14.8

19.1

20.4

17.0

1.4

-6.0

-7.0

0.2

5.7

5.6

5.0

9.1

7.6

10.5

0.2

-7.2

-8.1

-1.0

4.4

4.4

-14.5

56.5

-5.7

75.3

4.1

-3.6

-4.5

2.8

8.4

8.4

5.7

13.8

15.0

7.4

2.4

-5.1

-6.0

1.2

6.7

6.7

OTHER ARTIFICIAL BODY PARTS

Other portable aids

THERAPEUTIC APPLIANCES Mechano-therapy apparatus

WHEELCHAIRS Wheelchairs, not mechanically propelled Wheelchairs, mechanically propelled

OPHTHALMIC INSTRUMENTS

HOSPITAL FURNITURE

MEDICAL, SURGICAL STERILISERS

ULTRA-VIOLET OR INFRARED RAY APPARATUS

OTHER INSTRUMENTS & APPLIANCES

© Espicom Business Intelligence

Page 30

Australia Medical Devices Report Q2 2014

Detailed Medical Device Market By Product Area, 2009-2018 (US$, % Change) - Continued

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Anaesthetic apparatus and instruments

5.7

7.7

-2.3

25.6

0.8

-6.6

-7.5

-0.4

5.0

5.0

TOTAL

0.7

15.9

18.2

3.8

1.8

-5.7

-6.5

0.8

6.3

6.3

Source: BMI Espicom

Consumables Market Forecast The Australian market for consumable products is estimated at US$646.8mn in 2013, equal to US$27.9 per capita and 13.4% of the total market. Within this, syringes, needles & catheters account for US$322.7mn and bandages & dressings for US$150.0mn.

There is some local production of items such as bandages and syringes, but this tends to be for export. As a result, the market is largely reliant on imports. The principal supplier is the USA, followed by China, Ireland and Germany.

The sector grew at a CAGR of 7.2% over the 2008-2013 period. Espicom projects a CAGR of -1.8% for the 2013-2018 period, with the market declining to US$589.9mn by 2018, equal to US$23.9 per capita.

© Espicom Business Intelligence

Page 31

Australia Medical Devices Report Q2 2014

Table: Consumables Market, 2008-2018 (US$mn)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

CAGR CAGR 2018 2008-13 2013-18

CONSUMABLES

457.5 468.1 529.4 649.0 648.4 646.8 598.3 548.5 542.0 565.2 589.9

7.2

-1.8

BANDAGES & DRESSINGS

114.5 112.5 138.6 189.0 151.0 150.0 138.1 125.9 123.7 128.1 132.6

5.5

-2.4

Medical dressings (adhesive)

50.6

48.4

56.6

71.1

70.1

70.5

65.7

60.6

60.3

63.2

66.2

6.9

-1.3

Medical dressings (non-adhesive)

64.0

64.1

82.0 117.8

80.9

79.5

72.4

65.3

63.4

64.9

66.4

4.5

-3.5

SUTURING MATERIALS

61.5

60.2

62.1

92.7

95.4

90.9

85.7

87.0

93.2

99.8

9.2

0.9

257.1 256.9 263.4 307.4 327.3 322.7 294.8 266.7 260.0 267.3 274.8

4.6

-3.2

SYRINGES, NEEDLES & CATHETERS

76.7

Syringes (with/ without needles)

36.4

45.5

47.5

52.0

51.9

52.6

49.3

45.9

45.9

48.5

51.2

7.6

-0.5

Tubular metal needles/needles for sutures

28.5

32.4

30.7

36.2

38.4

38.4

35.6

32.7

32.3

33.7

35.1

6.1

-1.8

192.1 179.1 185.2 219.2 237.0 231.7 209.8 188.2 181.8 185.1 188.5

3.8

-4.0

Other needles, catheters, cannulae etc

OTHER CONSUMABLES

24.4

38.5

65.3

75.9

77.4

78.8

74.6

70.2

71.3

76.6

82.7

26.4

1.0

Blood-grouping reagents

6.5

4.3

4.9

6.8

5.5

5.4

5.0

4.5

4.4

4.5

4.7

-3.4

-3.0

First-aid boxes & kits

2.9

2.4

3.7

4.6

6.9

8.0

8.6

9.1

10.4

12.6

15.2

22.8

13.6

Ostomy products

0.9

18.3

36.9

36.8

41.4

40.5

36.7

33.0

31.9

32.5

33.2

111.9

-3.9

14.1

13.4

19.8

27.6

23.5

24.9

24.3

23.5

24.6

27.0

29.7

12.0

3.6

Surgical gloves

Source: BMI Espicom

© Espicom Business Intelligence

Page 32

Australia Medical Devices Report Q2 2014

Table: Consumables Market, 2008-2018 (US$ Per Capita)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

CAGR CAGR 2018 2008-13 2013-18

21.3

21.4

23.8

28.7

28.3

27.9

25.5

23.1

22.5

23.2

23.9

5.6

-3.0

BANDAGES & DRESSINGS

5.3

5.1

6.2

8.4

6.6

6.5

5.9

5.3

5.1

5.3

5.4

4.0

-3.6

Medical dressings (adhesive)

2.3

2.2

2.5

3.1

3.1

3.0

2.8

2.5

2.5

2.6

2.7

5.3

-2.4

Medical dressings (non-adhesive)

3.0

2.9

3.7

5.2

3.5

3.4

3.1

2.7

2.6

2.7

2.7

2.9

-4.7

SUTURING MATERIALS

2.9

2.7

2.8

3.4

4.0

4.1

3.9

3.6

3.6

3.8

4.0

7.5

-0.3

SYRINGES, NEEDLES & CATHETERS

11.9

11.7

11.8

13.6

14.3

13.9

12.5

11.2

10.8

11.0

11.1

3.1

-4.3

Syringes (with/ without needles)

1.7

2.1

2.1

2.3

2.3

2.3

2.1

1.9

1.9

2.0

2.1

6.0

-1.7

Tubular metal needles/needles for sutures

1.3

1.5

1.4

1.6

1.7

1.7

1.5

1.4

1.3

1.4

1.4

4.5

-3.0

Other needles, catheters, cannulae etc

8.9

8.2

8.3

9.7

10.3

10.0

8.9

7.9

7.5

7.6

7.6

2.2

-5.2

OTHER CONSUMABLES

1.1

1.8

2.9

3.4

3.4

3.4

3.2

2.9

3.0

3.1

3.4

24.5

-0.3

Blood-grouping reagents

0.3

0.2

0.2

0.3

0.2

0.2

0.2

0.2

0.2

0.2

0.2

-4.9

-4.1

First-aid boxes & kits

0.1

0.1

0.2

0.2

0.3

0.3

0.4

0.4

0.4

0.5

0.6

20.9

12.2

Ostomy products

0.0

0.8

1.7

1.6

1.8

1.7

1.6

1.4

1.3

1.3

1.3

108.7

-5.1

Surgical gloves

0.7

0.6

0.9

1.2

1.0

1.1

1.0

1.0

1.0

1.1

1.2

10.3

2.3

CONSUMABLES

Source: BMI Espicom

© Espicom Business Intelligence

Page 33

Australia Medical Devices Report Q2 2014

Table: Consumables Market, 2009-2018 (US$mn % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2.3

13.1

22.6

-0.1

-0.2

-7.5

-8.3

-1.2

4.3

4.4

BANDAGES & DRESSINGS

-1.7

23.2

36.3

-20.1

-0.6

-7.9

-8.8

-1.8

3.6

3.6

Medical dressings (adhesive)

-4.2

16.9

25.6

-1.5

0.6

-6.8

-7.7

-0.6

4.8

4.8

Medical dressings (nonadhesive)

0.2

27.9

43.7

-31.3

-1.7

-8.9

-9.8

-2.9

2.4

2.4

SUTURING MATERIALS

-2.1

3.2

23.5

20.9

2.8

-4.7

-5.7

1.6

7.1

7.1

SYRINGES, NEEDLES & CATHETERS

-0.1

2.5

16.7

6.5

-1.4

-8.6

-9.5

-2.5

2.8

2.8

Syringes (with/without needles)

24.9

4.4

9.5

-0.2

1.3

-6.1

-7.0

0.1

5.6

5.6

Tubular metal needles/ needles for sutures

13.4

-5.0

17.8

6.2

-0.1

-7.4

-8.2

-1.1

4.3

4.2

Other needles, catheters, cannulae etc

-6.8

3.4

18.4

8.1

-2.2

-9.4

-10.3

-3.4

1.9

1.8

OTHER CONSUMABLES

57.7

69.7

16.2

2.0

1.9

-5.3

-6.0

1.6

7.5

7.9

Blood-grouping reagents

-32.8

13.4

38.1

-19.2

-1.2

-8.5

-9.3

-2.3

3.0

3.0

First-aid boxes & kits

-14.8

51.0

24.6

50.5

15.7

7.3

6.2

14.3

20.5

20.5

1,823.6

102.0

-0.1

12.4

-2.2

-9.3

-10.2

-3.3

2.0

2.0

-4.9

47.5

39.7

-14.8

5.6

-2.2

-3.2

4.3

9.9

9.9

CONSUMABLES

Ostomy products Surgical gloves

Source: BMI Espicom

© Espicom Business Intelligence

Page 34

Australia Medical Devices Report Q2 2014

Consumables Market 2008-2018 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

Page 35

Australia Medical Devices Report Q2 2014

Consumables Market, 2009--2018 US$mn CAGR

Source: BMI Espicom

Diagnostic Imaging Market Forecast The Australian market for diagnostic imaging is estimated at US$735.2mn in 2013, equal to US$31.7 per capita and 15.3% of the total market. Within the sector, electrodiagnostic apparatus accounts for US $335.9mn and X-ray/other radiation apparatus for a further US$221.9mn. Almost all requirements are imported. These are supplied primarily from the USA, Germany and China.

The sector grew strongly over the 2008-13 period, at a CAGR of 6.5%. Within this, high tech areas such as MRI and CT were the best performers. A slowdown in growth across the diagnostic sector is expected, however; Espicom projects a CAGR of 0.4% for the 2013-18 period. This will take the market to US $719.1mn by 2018, equal to US$29.1 per capita. The only growth will remain in the high tech areas, notably MRI and scintigraphic apparatus.

© Espicom Business Intelligence

Page 36

Australia Medical Devices Report Q2 2014

Electrodiagnostic Apparatus Sector

The market for electrodiagnostic apparatus is estimated at US$335.9mn in 2013, equal to US$31.7 per capita. Almost all of the market is imported.

Other electrodiagnostic apparatus, including patient monitoring equipment, is the largest segment within the electrodiagnostic market, with sales of US$148.6mn in 2013, followed by ultrasound apparatus with sales of US$89.8mn and MRI units to a value of US$77.5mn. The electrodiagnostic apparatus market increased at a CAGR of 6.8% between 2008 and 2013, with the strongest growth (23.1%) coming in the MRI segment.

A slowdown in growth to a CAGR of just 0.5% is forecast to take the market to US$719.1mn over the 2013-2018 period, with scintigraphic apparatus expected to have the highest growth at 5.9%.

Radiation Apparatus Sector

The market for radiation apparatus, including X-ray apparatus and CT scanners, totals an estimated US $221.9mn in 2013. Other medical X-ray apparatus forms the largest sector of the market, with sales estimated at US$116.3mn in 2013, followed by CT scanners at US$97.1mn. Almost all of the market is imported.

The market increased at an estimated CAGR of 13.2% over the 2008-2013 period. Demand for CT scanners increased significantly over the period, rising at a CAGR of 32.6%.

The sector is projected to show a small decline over the 2013-2018 period, with the only area expected to show any growth being the CT scanner segment which is forecast to increase at a CAGR of just under 2%.

Imaging Parts & Accessories Sector

The market for imaging parts & accessories is estimated at US$177.4mn in 2013, equal to US$7.6 per capita. The market is almost entirely reliant upon imports.

The market increased at an estimated CAGR of 5.4% between 2008 and 2013, with all segments registering growth. Both the rolled X-ray film and X-ray tube segments achieved a CAGR of 8.5% over the period. Looking ahead, the sector is expected to shrink at a CAGR of 2.4% between 2013 and 2018 with only the rolled X-ray film and X-ray tube segments forecast to achieve any growth at all.

© Espicom Business Intelligence

Page 37

Australia Medical Devices Report Q2 2014

Table: Diagnostic Imaging Market, 2008-2018 (US$mn)

CAGR CAGR 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008-13 2013-18

DIAGNOSTIC IMAGING 498.0 510.5 587.4 640.5 726.3 735.2 690.0 641.6 642.9 679.8 719.1

8.1

-0.4

ELECTRODIAGNOSTIC APPARATUS

6.8

0.5

Electrocardiographs

242.2 252.9 288.0 313.0 328.6 335.9 318.3 298.8 302.3 322.8 344.7 9.9

10.0

13.3

15.5

15.1

15.6

14.9

14.0

14.3

15.3

16.5

9.4

1.1

Ultrasound

76.7

80.7

84.2

90.6

89.5

89.8

83.4

76.8

76.2

79.6

83.2

3.2

-1.5

MRI

27.4

46.3

52.2

56.0

72.8

77.5

76.5

74.7

78.5

87.0

96.4

23.1

4.5

2.2

1.7

4.0

3.5

4.1

4.4

4.4

4.4

4.6

5.2

5.9

14.5

5.9

Other electrodiagnostic apparatus

126.0 114.3 134.3 147.4 147.2 148.6 139.1 129.0 128.8 135.6 142.7

3.4

-0.8

RADIATION APPARATUS

119.5 128.3 147.8 154.1 218.9 221.9 208.4 193.9 194.3 205.5 217.4

13.16

-0.41

Scintigraphic apparatus

CT scanners

23.7

32.8

Other medical x-ray apparatus

88.0

94.1 101.4

A, B, C ray apparatus

IMAGING PARTS & ACCESSORIES

93.5

89.1

91.5

99.0 107.1

32.55

1.98

86.6 116.9 116.3 107.3

97.9

96.2

99.7 103.4

5.73

-2.34

6.9

6.7

6.9

1.61

-3.81

136.3 129.3 151.6 173.4 178.7 177.4 163.3 148.9 146.2 151.5 157.0

5.4

-2.4

7.8

1.4

43.6

2.8

64.3

3.2

93.4

8.6

97.1

8.4

7.6

6.8

Contrast media

26.8

25.2

31.1

32.1

33.9

33.3

30.3

27.3

26.5

27.2

27.8

4.4

-3.6

Medical x-ray film (flat)

21.0

22.0

23.4

25.5

23.5

22.4

19.8

17.3

16.3

16.1

16.0

1.3

-6.5

0.3

0.2

0.2

0.2

0.4

0.4

0.4

0.3

0.4

0.4

0.4

8.5

0.3

X-ray tubes

16.8

18.5

19.9

21.5

24.8

25.3

24.0

22.5

22.7

24.2

25.7

8.5

0.3

Other imaging parts & accessories

71.4

63.4

77.1

94.1

96.1

96.0

88.8

81.4

80.4

83.7

87.1

6.1

-1.9

Medical x-ray film (rolled)

Source: BMI Espicom

© Espicom Business Intelligence

Page 38

Australia Medical Devices Report Q2 2014

Table: Diagnostic Imaging Market, 2008-2018 (US$ Per Capita)

CAGR CAGR 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008-13 2013-18

DIAGNOSTIC IMAGING

23.1

23.3

26.4

28.3

31.7

31.7

29.4

27.0

26.7

27.9

29.1

6.5

-1.6

ELECTRODIAGNOSTIC APPARATUS

11.3

11.5

12.9

13.8

14.3

14.5

13.5

12.6

12.6

13.2

14.0

5.1

-0.7

Electrocardiographs

0.5

0.5

0.6

0.7

0.7

0.7

0.6

0.6

0.6

0.6

0.7

7.7

-0.1

Ultrasound

3.6

3.7

3.8

4.0

3.9

3.9

3.5

3.2

3.2

3.3

3.4

1.6

-2.7

MRI

1.3

2.1

2.3

2.5

3.2

3.3

3.3

3.1

3.3

3.6

3.9

21.3

3.2

Scintigraphic apparatus

0.1

0.1

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

12.8

4.7

Other electrodiagnostic apparatus

5.9

5.2

6.0

6.5

6.4

6.4

5.9

5.4

5.3

5.6

5.8

1.8

-2.0

RADIATION APPARATUS

5.6

5.9

6.6

6.8

9.6

9.6

8.9

8.1

8.1

8.4

8.8

11.46

-1.61

CT scanners

1.1

1.5

2.0

2.8

4.1

4.2

4.0

3.7

3.8

4.1

4.3

30.55

0.74

Other medical x-ray apparatus

4.1

4.3

4.6

3.8

5.1

5.0

4.6

4.1

4.0

4.1

4.2

4.14

-3.52

A, B, C ray apparatus

0.4

0.1

0.1

0.1

0.4

0.4

0.3

0.3

0.3

0.3

0.3

0.07

-4.97

IMAGING PARTS & ACCESSORIES

6.3

5.9

6.8

7.7

7.8

7.6

6.9

6.3

6.1

6.2

6.4

3.8

-3.6

Contrast media

1.2

1.2

1.4

1.4

1.5

1.4

1.3

1.1

1.1

1.1

1.1

2.9

-4.7

Medical x-ray film (flat)

1.0

1.0

1.0

1.1

1.0

1.0

0.8

0.7

0.7

0.7

0.6

-0.2

-7.6

Medical x-ray film (rolled)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

6.8

-0.9

X-ray tubes

0.8

0.8

0.9

1.0

1.1

1.1

1.0

0.9

0.9

1.0

1.0

6.9

-0.9

Other imaging parts & accessories

3.3

2.9

3.5

4.2

4.2

4.1

3.8

3.4

3.3

3.4

3.5

4.5

-3.1

Source: BMI Espicom

© Espicom Business Intelligence

Page 39

Australia Medical Devices Report Q2 2014

Table: Diagnostic Imaging Market, 2009-2018 (US$mn % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

DIAGNOSTIC IMAGING

2.5

15.1

9.0

13.4

1.2

-6.2

-7.0

0.2

5.7

5.8

ELECTRODIAGNOSTIC APPARATUS

4.4

13.9

8.7

5.0

2.2

-5.2

-6.1

1.2

6.7

6.8

Electrocardiographs

0.2

33.6

16.3

-2.5

3.0

-4.6

-5.5

1.8

7.3

7.3

Ultrasound

5.2

4.3

7.7

-1.3

0.3

-7.0

-7.9

-0.9

4.5

4.5

69.2

12.8

7.1

30.1

6.5

-1.4

-2.4

5.1

10.9

10.8

-23.5

134.0

-12.8

16.8

8.0

0.0

-1.0

6.6

12.4

12.4

-9.3

17.5

9.8

-0.2

1.0

-6.4

-7.3

-0.1

5.3

5.3

7.3

15.2

4.3

42.1

1.3

-6.1

-7.0

0.2

5.7

5.8

38.1

33.1

47.3

45.4

3.9

-3.7

-4.7

2.6

8.2

8.2

6.9

7.7

-14.5

35.0

-0.5

-7.8

-8.7

-1.7

3.6

3.6

-81.5

94.8

15.1

166.8

-2.1

-9.3

-10.1

-3.2

2.1

2.1

IMAGING PARTS & ACCESSORIES

-5.1

17.3

14.4

3.0

-0.7

-8.0

-8.8

-1.8

3.6

3.6

Contrast media

-5.9

23.2

3.3

5.5

-1.7

-9.0

-9.9

-2.9

2.3

2.3

4.7

6.4

9.1

-7.8

-4.7

-11.7

-12.6

-5.9

-0.7

-0.7

-28.8

-18.1

29.3

95.0

2.1

-5.4

-6.2

1.0

6.5

6.5

10.1

7.3

8.3

15.2

2.2

-5.3

-6.2

1.0

6.5

6.5

-11.2

21.6

22.0

2.2

-0.1

-7.4

-8.3

-1.3

4.1

4.1

MRI Scintigraphic apparatus Other electrodiagnostic apparatus

RADIATION APPARATUS CT scanners Other medical x-ray apparatus A, B, C ray apparatus

Medical x-ray film (flat) Medical x-ray film (rolled) X-ray tubes Other imaging parts & accessories

Source: BMI Espicom

© Espicom Business Intelligence

Page 40

Australia Medical Devices Report Q2 2014

Diagnostic Imaging Market, 2008-2018 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

Page 41

Australia Medical Devices Report Q2 2014

Diagnostic Imaging Market, 2009-2018 US$mn CAGR

Source: BMI Espicom

Dental Products Market Forecast The Australian dental market is estimated at US$247.1mn in 2013, equal to US$10.6 per capita and 5.1% of the total market. The market for instruments & supplies accounts for the majority of the dental market and is estimated at US$217.1mn in 2013. The capital equipment market, including drills, chairs and X-ray apparatus is estimated at US$30.1mn.

The dental market has outperformed the market as a whole in recent years as the government has been keen to boost dental provision across the country, and has taken steps to boost the numbers of dentists trained and recruited each year. After a CAGR of 7.5% over the 2008-13 period, Espicom projects a fall in the CAGR to 1.6% for the 2013-18 period, with capital equipment outperforming this (at a CAGR of 2.8%) as the number of dentists increases. This will take the dental market to US$268.1mn by 2018, equal to US$10.9 per capita.

The USA and Germany are the major suppliers of dental equipment, with Switzerland and Ireland also significant suppliers of dental instruments and fittings.

© Espicom Business Intelligence

Page 42

Australia Medical Devices Report Q2 2014

Table: Dental Products Market, 2008-2018 (US$mn)

2008

2009

2010

2011

187 205.1

226

2018

CAGR 2008-13

CAGR 2013-18

240 247.1 236.2

224 229.2 247.7 268.1

7.5

1.6

2012

2013

2014

2015

2016

2017

DENTAL PRODUCTS

172.2

CAPITAL EQUIPMENT

20.3

26

35.7

28.4

28.8

30.1

29.1

27.9

28.9

31.5

34.4

8.2

2.8

Dental drills

1.7

3

3.5

2.4

2.1

2

1.8

1.6

1.6

1.6

1.6

2.8

-4.1

Dental chairs

8.6

9

12.7

10.2

9.2

9.3

8.6

7.9

7.9

8.2

8.6

1.4

-1.5

Dental x-ray

10

14

19.5

15.8

17.5

18.8

18.7

18.3

19.4

21.7

24.2

13.7

5.2

196 200.3 216.1 233.7

7.4

1.5

INSTRUMENTS & SUPPLIES

151.9

Dental cements

32

34

37

53.6

59.8

64.3

64.2

63.5

67.7

76

85.4

14.8

5.8

Dental instruments

74

82

78

87.1

92.5

90.7

82.4

74.2

71.9

73.5

75.1

4.2

-3.7

Teeth & other fittings

45.7

45

54.4

57

59

62

60.4

58.3

60.7

66.6

73.1

6.3

3.4

Artificial teeth

5

6

11.4

12.5

13.5

13.6

12.6

11.6

11.5

12.1

12.6

20.7

-1.5

Other dental fittings

40

39.8

43

44.5

45.4

48.4

47.8

46.7

49.1

54.5

60.5

3.7

4.6

161 169.4 197.7 211.2 217.1 207.1

Source: BMI Espicom

Table: Dental Products Market, 2008-2018 (US$ Per Capita)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

DENTAL PRODUCTS

CAGR 2008-13

CAGR 2013-18

8

9

9.2

10

10.5

10.6

10

9.4

9.5

10.2

10.9

7.5

1.6

CAPITAL EQUIPMENT

0.9

1

1.6

1.3

1.3

1.3

1.2

1.2

1.2

1.3

1.4

8.2

2.8

Dental drills

0.1

0

0.2

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

2.8

-4.1

0

0

0.6

0.5

0.4

0.4

0.4

0.3

0.3

0.3

0.3

1.4

-1.5

0.5

1

0.9

0.7

0.8

0.8

0.8

0.8

0.8

0.9

1

13.7

5.2

Dental chairs Dental x-ray

© Espicom Business Intelligence

Page 43

Australia Medical Devices Report Q2 2014

Dental Products Market, 2008-2018 (US$ Per Capita) - Continued

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

CAGR 2008-13

CAGR 2013-18

INSTRUMENTS & SUPPLIES

7

7

7.6

8.7

9.2

9.4

8.8

8.2

8.3

8.9

9.5

7.4

1.5

Dental cements

1.5

2

1.7

2.4

2.6

2.8

2.7

2.7

2.8

3.1

3.5

14.8

5.8

Dental instruments

3.4

4

3.5

3.9

4

3.9

3.5

3.1

3

3

3

4.2

-3.7

Teeth & other fittings

2

2

2.4

2.5

2.6

2.7

2.6

2.5

2.5

2.7

3

6.3

3.4

Artificial teeth

0

0.3

0.5

0.6

0.6

0.6

0.5

0.5

0.5

0.5

0.5

20.7

-1.5

Other dental fittings

2

1.8

1.9

2

2

2.1

2

2

2

2.2

2.5

3.7

4.6

Source: BMI Espicom

Table: Dental Products Market, 2009-2018 (US$mn % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

DENTAL PRODUCTS

8.5

9.8

10.2

6.2

2.9

-4.4

-5.2

2.3

8.1

8.3

CAPITAL EQUIPMENT

26.5

39.3

-20.5

1.6

4.3

-3.2

-4.1

3.4

9.2

9.3

Dental drills

77.7

13.8

-32.4

-14.0

-2.3

-9.5

-10.3

-3.4

1.8

1.8

Dental chairs

-1.2

48.3

-19.4

-9.4

0.4

-7.0

-7.9

-0.8

4.6

4.6

Dental x-ray

41.6

39.5

-19.1

11.0

7.2

-0.7

-1.7

5.9

11.6

11.6

INSTRUMENTS & SUPPLIES

6.1

5.1

16.7

6.9

2.8

-4.6

-5.3

2.2

7.9

8.1

Dental cements

6.3

8.0

44.8

11.6

7.7

-0.2

-1.1

6.5

12.3

12.3

Dental instruments

10.3

-4.5

11.7

6.2

-1.9

-9.1

-10.0

-3.1

2.2

2.2

Teeth & other fittings

-0.8

20.0

4.8

3.4

5.1

-2.5

-3.5

4.0

9.7

9.8

4.5

105.6

10.0

8.1

0.4

-7.0

-7.9

-0.8

4.6

4.5

-1.5

8.1

3.4

2.1

6.5

-1.3

-2.3

5.2

11.0

10.9

Artificial teeth Other dental fittings

Source: BMI Espicom

© Espicom Business Intelligence

Page 44

Australia Medical Devices Report Q2 2014

Dental Products Market, 2008-2018

Source: BMI Espicom

© Espicom Business Intelligence

Page 45

Australia Medical Devices Report Q2 2014

Dental Products Market, 2009-2018 US$mn CAGR

Source: BMI Espicom

Orthopaedics & Prosthetics Market Forecast The Australian orthopaedic & prosthetic market is estimated at US$864.7mn in 2013, equal to US$37.2 per capita and 18.0% of the total market.

Australia has a sizeable domestic orthopaedic & prosthetic production sector, but this concentrates on exports. Products used locally, especially at the advanced end of the technology scale, tend to be imported, principally from the USA, Ireland and Switzerland.

The orthopaedic & prosthetic market grew at a CAGR of 9.9% between 2008 and 2013. Driven by the ageing population and increasing availability of newer more expensive products, Espicom projects that this will be one of the better performing market segments in the coming years, albeit at a low CAGR of 1.7% over the 2013-18. This is expected to take the overall market to US$939.5mn by 2018, equal to US$38.1 per capita.

© Espicom Business Intelligence

Page 46

Australia Medical Devices Report Q2 2014

Table: Orthopaedics & Prosthetics Market, 2008-2018 (US$mn)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

CAGR CAGR 2018 2008-13 2013-18

ORTHOPAEDICS & PROSTHETICS

539.8 557.2 656.7 850.6 835.0 864.7 829.8 788.3 806.7 870.5 939.5

9.9

1.7

FIXATION DEVICES

141.2 110.4 134.4 219.9 201.5 204.2 191.8 178.3 178.5 188.5 198.9

7.7

-0.5

ARTIFICIAL JOINTS

171.0 156.6 194.2 245.0 280.2 294.4 286.6 276.2 286.6 313.5 343.0

11.5

3.1

OTHER ARTIFICIAL BODY PARTS

227.6 290.2 328.0 385.7 353.3 366.0 351.3 333.8 341.6 368.5 397.6

10.0

1.7

Source: BMI Espicom

Table: Orthopaedics & Prosthetics Market, 2008-2018 (US$ Per Capita)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

CAGR CAGR 2018 2008-13 2013-18

25.1

25.4

29.5

37.6

36.4

37.2

35.3

33.1

33.5

35.7

38.1

8.2

0.4

FIXATION DEVICES

6.6

5.0

6.0

9.7

8.8

8.8

8.2

7.5

7.4

7.7

8.1

6.0

-1.7

ARTIFICIAL JOINTS

7.9

7.1

8.7

10.8

12.2

12.7

12.2

11.6

11.9

12.9

13.9

9.8

1.9

10.6

13.3

14.7

17.1

15.4

15.8

14.9

14.0

14.2

15.1

16.1

8.3

0.4

ORTHOPAEDICS & PROSTHETICS

OTHER ARTIFICIAL BODY PARTS

Source: BMI Espicom

© Espicom Business Intelligence

Page 47

Australia Medical Devices Report Q2 2014

Table: Orthopaedics & Prosthetics Market, 2009-2018 (USmn % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

ORTHOPAEDICS & PROSTHETICS

3.2

17.9

29.5

-1.8

3.6

-4.0

-5.0

2.3

7.9

7.9

FIXATION DEVICES

-21.8

21.8

63.6

-8.4

1.4

-6.1

-7.0

0.1

5.6

5.6

ARTIFICIAL JOINTS

-8.4

24.1

26.1

14.4

5.1

-2.6

-3.6

3.8

9.4

9.4

OTHER ARTIFICIAL BODY PARTS

27.5

13.0

17.6

-8.4

3.6

-4.0

-5.0

2.3

7.9

7.9

Source: BMI Espicom

Orthopaedics & Prosthetics Market, 2008-2018

Source: BMI Espicom

© Espicom Business Intelligence

Page 48

Australia Medical Devices Report Q2 2014

Orthopaedics & Prosthetics Market, 2009-2018 US$mn CAGR

Source: BMI Espicom

Patient Aids Market Forecast The market for patient aids is estimated at US$792.1mn in 2013, equal to US$34.1 per capita and 18.0% of the total market. Within this, portable aids account for US$562.5mn and therapeutic appliances for US $229.7mn.

Australia has considerable production expertise in a number of these areas. Cochlear is one of the world's leading developers of digital hearing aids, while ResMed is a major manufacturer of therapeutic respiration products. Both companies make most of their sales in markets outside Australia, however. The Australian market is therefore largely reliant on imports, primarily from the USA, China, Switzerland and Ireland.

The market grew at a CAGR of 4.8% between 2008 and 2013, but is projected to decline at a CAGR of 1.0% to US$755.0mn by 2018. In recent years, the strongest growth has been seen in the therapeutic appliances segment, and this is the only area of the market expected to continue to show any growth over the next five years.

© Espicom Business Intelligence

Page 49

Australia Medical Devices Report Q2 2014

Table: Patient Aids Market, 2008-2018 (US$mn)

2018

CAGR 2008-13

CAGR 2013-18

626.8 551.6 682.5 810.0 787.8 792.1 738.8 683.6 681.7 717.2 755.0

4.8

-1.0

PORTABLE AIDS 475.3 408.5 470.3 576.4 563.1 562.5 521.1 478.7 473.9 494.8 516.8

3.4

-1.7

Hearing aids

111.8

96.4 116.8 143.4 138.1 139.0 129.8 120.6 120.7 127.4 134.4

4.4

-0.7

Pacemakers

121.5 116.6 130.9 147.2 177.8 181.5 171.6 160.6 161.9 172.0 182.8

8.4

0.1

Other portable aids

242.1 195.5 222.6 285.8 247.1 242.0 219.6 197.5 191.3 195.4 199.6

0.0

-3.8

THERAPEUTIC APPLIANCES

151.4 143.1 212.2 233.6 224.7 229.7 217.8 204.9 207.8 222.4 238.2

8.7

0.7

2008

PATIENT AIDS

2009

2010

2011

2012

2013

2014

2015

2016

2017

Mechanotherapy apparatus

63.8

54.0

67.4

4.6

-3.4

Therapeutic respiration apparatus

87.7

89.1 150.9 163.4 143.5 149.7 144.8 139.0 143.7 156.6 170.7

11.3

2.7

61.3

70.2

81.2

80.0

73.0

65.9

64.1

65.7

Source: BMI Espicom

Table: Patient Aids Market, 2008-2018 (US$ Per Capita)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 2008-13

CAGR 2013-18

PATIENT AIDS

29.1

25.2

30.6

35.8

34.4

34.1

31.4

28.7

28.3

29.4

30.6

3.2

-2.2

PORTABLE AIDS

22.1

18.7

21.1

25.5

24.6

24.2

22.2

20.1

19.7

20.3

20.9

1.9

-2.9

Hearing aids

5.2

4.4

5.2

6.3

6.0

6.0

5.5

5.1

5.0

5.2

5.4

2.9

-1.9

Pacemakers

5.6

5.3

5.9

6.5

7.8

7.8

7.3

6.8

6.7

7.1

7.4

6.7

-1.1

Other portable aids

11.3

8.9

10.0

12.6

10.8

10.4

9.3

8.3

7.9

8.0

8.1

-1.5

-4.9

THERAPEUTIC APPLIANCES

7.0

6.5

9.5

10.3

9.8

9.9

9.3

8.6

8.6

9.1

9.7

7.0

-0.5

Mechanotherapy apparatus

3.0

2.5

2.8

3.1

3.5

3.4

3.1

2.8

2.7

2.7

2.7

3.1

-4.5

© Espicom Business Intelligence

Page 50

Australia Medical Devices Report Q2 2014

Patient Aids Market, 2008-2018 (US$ Per Capita) - Continued

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 2008-13

CAGR 2013-18

4.1

4.1

6.8

7.2

6.3

6.4

6.2

5.8

6.0

6.4

6.9

9.6

1.4

Therapeutic respiration apparatus

Source: BMI Espicom

Table: Patient Aids Market, 2009-2018 (US$mn % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

PATIENT AIDS

-12.0

23.7

18.7

-2.7

0.5

-6.7

-7.5

-0.3

5.2

5.3

PORTABLE AIDS

-14.1

15.1

22.6

-2.3

-0.1

-7.4

-8.1

-1.0

4.4

4.4

Hearing aids

-13.7

21.1

22.8

-3.7

0.6

-6.6

-7.1

0.1

5.5

5.5

Pacemakers

-4.0

12.3

12.4

20.8

2.1

-5.5

-6.4

0.8

6.3

6.3

-19.2

13.9

28.4

-13.5

-2.1

-9.2

-10.1

-3.1

2.1

2.1

THERAPEUTIC APPLIANCES

-5.5

48.3

10.1

-3.8

2.2

-5.2

-5.9

1.4

7.0

7.1

Mechano-therapy apparatus

-15.4

13.6

14.5

15.8

-1.5

-8.8

-9.7

-2.7

2.6

2.6

1.6

69.4

8.3

-12.2

4.3

-3.3

-4.0

3.4

9.0

9.0

Other portable aids

Therapeutic respiration apparatus

Source: BMI Espicom

© Espicom Business Intelligence

Page 51

Australia Medical Devices Report Q2 2014

Patient Aids Market, 2008-2018 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Patient Aids Market, 2009-2018 US$mn CAGR

Source: BMI Espicom

Other Medical Devices Market Forecast The market for all other devices is estimated at US$1,528.3mn in 2013, equal to US$65.8 per capita and 31.7% of the total device market. Leading categories include endoscopy apparatus, ophthalmic instruments, dialysis apparatus and hospital furniture.

This segment of the market grew at a CAGR of 8.6% between 2008 and 2013, but is projected to fall back to a CAGR of just 0.5% over the next five years, to reach US$1,564.9mn in 2018.

Fresenius has a local plant in New South Wales which makes dialysis products, but beyond this, most requirements are imported, largely from the USA and Germany.

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Table: Other Medical Devices Market, 2008-2018 (US$mn)

OTHERS

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

CAGR 2008-13

CAGR 2013-18

1,012 1,054 1,195 1,381 1,494 1,528 1,449 1,361 1,376 1,468 1,565

8.6

0.5

WHEELCHAIRS

26.5

24.4

28.0

31.2

32.2

32.7

30.7

28.7

28.8

30.5

32.4

4.3

-0.2

Wheelchairs, not mechanically propelled

11.2

10.0

10.7

12.9

13.4

14.1

13.6

13.1

13.5

14.7

16.1

4.7

2.7

Wheelchairs, mechanically propelled

15.3

14.4

17.3

18.3

18.8

18.6

17.1

15.6

15.3

15.8

16.3

4.0

-2.6

OPHTHALMIC INSTRUMENTS

65.1

65.8

68.5

85.3

96.5

98.8

93.7

88.0

89.0

95.0 101.3

8.7

0.5

HOSPITAL FURNITURE

41.0

35.0

41.6

50.1

58.6

59.5

55.9

52.0

52.1

55.0

58.1

7.7

-0.4

MEDICAL, SURGICAL STERILISERS

16.5

17.3

18.9

20.3

22.4

22.5

20.9

19.2

19.0

19.8

20.7

6.4

-1.7

1.8

1.5

2.4

2.3

4.0

4.2

4.0

3.8

3.9

4.3

4.6

18.2

2.2

OTHER INSTRUMENTS & APPLIANCES 860.9 910.0 1,036 1,192 1,280 1,311 1,244 1,169 1,183 1,263 1,348

8.8

0.6

Anaesthetic apparatus and instruments

7.1

-1.1

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

86.5

91.4

98.4

96.2 120.7 121.7 113.7 105.1 104.7 109.9 115.3

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Other Medical Devices Market, 2008-2018 (US$ Per Capita)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

CAGR 2008-13

CAGR 2013-18

OTHERS

47

48

53.7

61.1

65.2

65.8

61.6

57.2

57.1

60.2

63.4

8.6

0.5

WHEELCHAIRS

1.2

1

1.3

1.4

1.4

1.4

1.3

1.2

1.2

1.3

1.3

4.3

-0.2

Wheelchairs, not mechanically propelled

0.5

1

0.5

0.6

0.6

0.6

0.6

0.5

0.6

0.6

0.7

4.7

2.7

Wheelchairs, mechanically propelled

1

1

0.8

0.8

0.8

0.8

0.7

0.7

0.6

0.6

0.7

4

-2.6

OPHTHALMIC INSTRUMENTS

3

3

3.1

3.8

4.2

4.3

4

3.7

3.7

3.9

4.1

8.7

0.5

1.9

2

1.9

2.2

2.6

2.6

2.4

2.2

2.2

2.3

2.4

7.7

-0.4

MEDICAL, SURGICAL STERILISERS

1

1

0.8

0.9

1

1

0.9

0.8

0.8

0.8

0.8

6.4

-1.7

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

0

0.1

0.1

0.1

0.2

0.2

0.2

0.2

0.2

0.2

0.2

18.2

2.2

OTHER INSTRUMENTS & APPLIANCES

40

41.5

46.5

52.7

55.9

56.5

52.9

49.1

49.1

51.8

54.6

8.8

0.6

4

4.2

4.4

4.3

5.3

5.2

4.8

4.4

4.3

4.5

4.7

7.1

-1.1

HOSPITAL FURNITURE

Anaesthetic apparatus and instruments

Source: BMI Espicom

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Table: Other Medical Devices Market, 2009-2018 (US$mn % Change)

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

4.2

13.4

15.5

8.2

2.3

-5.2

-6.1

1.1

6.6

6.6

-7.9

14.8

11.5

3.2

1.5

-5.9

-6.8

0.5

6.0

6.1

-11.1

7.3

21.0

3.9

4.7

-3.0

-4.0

3.4

9.0

9.0

-5.6

19.9

5.6

2.7

-0.8

-8.1

-9.0

-2.0

3.4

3.4

1.1

4.0

24.6

13.2

2.3

-5.2

-6.1

1.2

6.7

6.7

-14.8

19.1

20.4

17.0

1.4

-6.0

-7.0

0.2

5.7

5.6

MEDICAL, SURGICAL STERILISERS

5.0

9.1

7.6

10.5

0.2

-7.2

-8.1

-1.0

4.4

4.4

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

-14.5

56.5

-5.7

75.3

4.1

-3.6

-4.5

2.8

8.4

8.4

OTHER INSTRUMENTS & APPLIANCES

5.7

13.8

15.0

7.4

2.4

-5.1

-6.0

1.2

6.7

6.7

Anaesthetic apparatus and instruments

5.7

7.7

-2.3

25.6

0.8

-6.6

-7.5

-0.4

5.0

5.0

OTHERS

WHEELCHAIRS Wheelchairs, not mechanically propelled Wheelchairs, mechanically propelled

OPHTHALMIC INSTRUMENTS

HOSPITAL FURNITURE

Source: BMI Espicom

© Espicom Business Intelligence

Page 56

Australia Medical Devices Report Q2 2014

Other Medical Devices Market, 2008-2018 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

Page 57

Australia Medical Devices Report Q2 2014

Other Medical Devices Market, 2008-2019 US$mn CAGR

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Annual Medical Device Imports Since 2001, Australian medical device imports have seen a period of sustained rapid growth. In 2012, imports reached a new high of US$4,523.6mn, rising by 3.9% over 2011. In CAGR terms, growth was 10.8% between 2007 and 2012.

Medical Device Imports, 2002-2012 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Change In Medical Device Imports, 2003-2012 %

Source: BMI Espicom

Consumables

After two years of double-digit growth, imports of consumables fell by 0.1% to US$637.1mn in 2012. The decrease was due to a sudden drop in imports of bandages & dressings which fell by 20.1% in 2012, while all other segments of the consumables import sector achieved growth. Consumables account for over 14.0% of total medical device imports and expanded at a CAGR of 10.8% during the 2007-2012 period. Just over half of consumables imports in 2012 were in the form of syringes, needles & catheters which increased by 6.5% to total US$320.2mn.

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Diagnostic Imaging

Imports of diagnostic imaging apparatus grew by 13.6% to reach US$710.3mn in 2012. The sector had a CAGR of 9.8% over the 2007-2012 period. Electrodiagnostic apparatus imports form the majority of the sector, and were valued at US$317.7mn in 2012, accounting for 44.7% of total diagnostic imaging imports. The fastest growing segment in 2012 was X-ray/radiation apparatus which increased by 41.5% to a value of US$217.7mn.

Dental Products

Dental product imports grew by 6.1% to reach US$228.7mn in 2012. The bulk of dental imports consist of instruments & supplies and it was this segment which underpinned the growth recorded in 2012, rising by 6.7% to US$200.2mn. Dental imports increased at a CAGR of 10.1% during the period.

Orthopaedics & Prosthetics

After a 29.6% rise in imports of orthopaedics & prosthetics in 2011, demand fell back by 1.8% to total US $830.2mn in 2012. Despite the decline, growth was seen in imports of artificial joints which increased by 14.4% to US$279.9mn. Imports classed under the fixation devices and other artificial body parts categories both fell by 8.4% during 2012, to US$ 201.1mn and US$349.2mn, respectively.

CAGR growth over the 2007-12 period was 12.9% for orthopaedic & prosthetic products, with only limited variance from this figure within the three segments.

Patient Aids

Imports of patient aids totalled US$692.5mn in 2012, a decrease of 3.0% from the previous year. Against this trend, a 20.8% increase was recorded in imports of pacemakers, which climbed to US$177.4mn.

Despite the fall in demand in 2012, imports of patient aids rose at a CAGR of 6.7% between 2008 and 2012, with pacemakers driving growth with a CAGR of 8.3% over the period.

© Espicom Business Intelligence

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Table: Medical Device Imports By Product Area, 2008-2012 (US$000s)

2008

2009

2010

2011

2012

CONSUMABLES

449,953

459,804

520,038

637,885

637,081

BANDAGES & DRESSINGS

113,412

111,442

137,261

187,099

149,530

61,158

59,873

61,776

76,309

92,225

251,618

251,132

257,615

300,683

320,161

OTHER CONSUMABLES

23,765

37,357

63,386

73,794

75,165

DIAGNOSTIC IMAGING

485,171

498,508

573,551

625,215

710,258

ELECTRODIAGNOSTIC APPARATUS

233,212

244,243

278,101

302,136

317,717

RADIATION APPARATUS

118,564

127,651

147,009

153,395

217,698

IMAGING PARTS & ACCESSORIES

133,395

126,614

148,441

169,684

174,843

DENTAL PRODUCTS

164,828

178,962

196,840

215,630

228,729

CAPITAL EQUIPMENT

20,011

25,340

35,290

28,038

28,500

INSTRUMENTS & SUPPLIES

144,817

153,622

161,550

187,592

200,229

ORTHOPAEDICS & PROSTHETICS

536,706

553,455

652,432

845,462

830,236

PATIENT AIDS

557,582

490,274

601,442

713,719

692,528

PORTABLE AIDS

422,793

364,011

417,392

510,670

494,795

THERAPEUTIC APPLIANCES

134,789

126,263

184,050

203,049

197,733

OTHERS

965,105

1,005,186

1,140,024

1,317,076

1,424,780

3,159,345

3,186,189

3,684,327

4,354,987

4,523,612

SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS

TOTAL

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Medical Device Imports By Product Area 2008-2012 (US$000s, % Change)

2008

2009

2010

2011

2012

CONSUMABLES

17.8

2.2

13.1

22.7

-0.1

BANDAGES & DRESSINGS

20.2

-1.7

23.2

36.3

-20.1

SUTURING MATERIALS

16.1

-2.1

3.2

23.5

20.9

SYRINGES, NEEDLES & CATHETERS

18.5

-0.2

2.6

16.7

6.5

OTHER CONSUMABLES

4.9

57.2

69.7

16.4

1.9

DIAGNOSTIC IMAGING

9.2

2.7

15.1

9.0

13.6

ELECTRODIAGNOSTIC APPARATUS

0.4

4.7

13.9

8.6

5.2

34.6

7.7

15.2

4.3

41.9

7.8

-5.1

17.2

14.3

3.0

DENTAL PRODUCTS

16.8

8.6

10.0

9.5

6.1

CAPITAL EQUIPMENT

25.7

26.6

39.3

-20.5

1.6

INSTRUMENTS & SUPPLIES

15.7

6.1

5.2

16.1

6.7

ORTHOPAEDICS & PROSTHETICS

18.3

3.1

17.9

29.6

-1.8

PATIENT AIDS

11.6

-12.1

22.7

18.7

-3.0

PORTABLE AIDS

10.7

-13.9

14.7

22.3

-3.1

THERAPEUTIC APPLIANCES

14.5

-6.3

45.8

10.3

-2.6

OTHERS

22.9

4.2

13.4

15.5

8.2

TOTAL

16.8

0.8

15.6

18.2

3.9

RADIATION APPARATUS IMAGING PARTS & ACCESSORIES

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Medical Device Imports By Product Area, 2008-2012 (Local Currency 000s)

2008

2009

2010

2011

2012

CONSUMABLES

538,111

588,680

566,468

617,979

615,184

BANDAGES & DRESSINGS

135,632

142,678

149,516

181,260

144,391

73,140

76,655

67,292

73,928

89,055

300,917

321,521

280,616

291,300

309,157

OTHER CONSUMABLES

28,421

47,828

69,045

71,491

72,582

DIAGNOSTIC IMAGING

580,229

638,232

624,759

605,704

685,846

ELECTRODIAGNOSTIC APPARATUS

278,904

312,701

302,931

292,707

306,797

RADIATION APPARATUS

141,794

163,430

160,134

148,608

210,216

IMAGING PARTS & ACCESSORIES

159,531

162,102

161,694

164,389

168,834

DENTAL PRODUCTS

197,122

229,122

214,414

208,901

220,867

CAPITAL EQUIPMENT

23,932

32,442

38,441

27,163

27,520

INSTRUMENTS & SUPPLIES

173,190

196,680

175,974

181,738

193,347

ORTHOPAEDICS & PROSTHETICS

641,861

708,580

710,683

819,078

801,700

PATIENT AIDS

666,827

627,690

655,140

691,446

668,725

PORTABLE AIDS

505,629

466,038

454,658

494,734

477,789

THERAPEUTIC APPLIANCES

161,198

161,653

200,483

196,713

190,937

OTHERS

1,154,194

1,286,925

1,241,809

1,275,975

1,375,809

TOTAL

3,778,343

4,079,230

4,013,274

4,219,083

4,368,132

SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Medical Device Imports By Product Area, 2008-2012 (Local Currency 000s, % Change)

2008

2009

2010

2011

2012

CONSUMABLES

17.9

9.4

-3.8

9.1

-0.5

BANDAGES & DRESSINGS

20.3

5.2

4.8

21.2

-20.3

SUTURING MATERIALS

16.2

4.8

-12.2

9.9

20.5

SYRINGES, NEEDLES & CATHETERS

18.6

6.8

-12.7

3.8

6.1

OTHER CONSUMABLES

5.0

68.3

44.4

3.5

1.5

DIAGNOSTIC IMAGING

9.3

10.0

-2.1

-3.0

13.2

ELECTRODIAGNOSTIC APPARATUS

0.5

12.1

-3.1

-3.4

4.8

34.7

15.3

-2.0

-7.2

41.5

7.9

1.6

-0.3

1.7

2.7

DENTAL PRODUCTS

16.9

16.2

-6.4

-2.6

5.7

CAPITAL EQUIPMENT

25.8

35.6

18.5

-29.3

1.3

INSTRUMENTS & SUPPLIES

15.8

13.6

-10.5

3.3

6.4

ORTHOPAEDICS & PROSTHETICS

18.4

10.4

0.3

15.3

-2.1

PATIENT AIDS

11.7

-5.9

4.4

5.5

-3.3

PORTABLE AIDS

10.8

-7.8

-2.4

8.8

-3.4

THERAPEUTIC APPLIANCES

14.6

0.3

24.0

-1.9

-2.9

OTHERS

23.0

11.5

-3.5

2.8

7.8

TOTAL

16.9

8.0

-1.6

5.1

3.5

RADIATION APPARATUS IMAGING PARTS & ACCESSORIES

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Medical Device Imports By Product Area, 2008-2012 (% Distribution)

2008

2009

2010

2011

2012

14.2

14.4

14.1

14.6

14.1

BANDAGES & DRESSINGS

3.6

3.5

3.7

4.3

3.3

SUTURING MATERIALS

1.9

1.9

1.7

1.8

2.0

SYRINGES, NEEDLES & CATHETERS

8.0

7.9

7.0

6.9

7.1

OTHER CONSUMABLES

0.8

1.2

1.7

1.7

1.7

DIAGNOSTIC IMAGING

15.4

15.6

15.6

14.4

15.7

ELECTRODIAGNOSTIC APPARATUS

7.4

7.7

7.5

6.9

7.0

RADIATION APPARATUS

3.8

4.0

4.0

3.5

4.8

IMAGING PARTS & ACCESSORIES

4.2

4.0

4.0

3.9

3.9

DENTAL PRODUCTS

5.2

5.6

5.3

5.0

5.1

CAPITAL EQUIPMENT

0.6

0.8

1.0

0.6

0.6

INSTRUMENTS & SUPPLIES

4.6

4.8

4.4

4.3

4.4

ORTHOPAEDICS & PROSTHETICS

17.0

17.4

17.7

19.4

18.4

PATIENT AIDS

17.6

15.4

16.3

16.4

15.3

PORTABLE AIDS

13.4

11.4

11.3

11.7

10.9

4.3

4.0

5.0

4.7

4.4

30.5

31.5

30.9

30.2

31.5

100.0

100.0

100.0

100.0

100.0

CONSUMABLES

THERAPEUTIC APPLIANCES

OTHERS

TOTAL

Source: BMI Espicom

The USA remains the dominant supplier. Total shipments from the USA amounted to US$1,701.1mn, equal to 37.6% in 2012. Germany (US$386.4mn), Ireland (US$367.6mn), China (US$306.7mn) and Switzerland

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

(US$291.6mn) were the other leading suppliers with shares of 8.5%, 8.1%, 6.8% and 6.4% respectively. Total shipments from the European Union amounted to US$1,406.4mn in 2012.

Table: Leading Medical Device Suppliers By Product Area (US$000s)

USA

Germany

Ireland

China

Switzerland

EU-27

251,379

19,050

24,802

49,871

16,311

172,728

91,182

9,109

711

34,704

4,783

79,281

145,122

9,740

23,706

8,461

9,084

69,388

OTHER CONSUMABLES

15,075

201

385

6,706

2,444

24,059

DIAGNOSTIC IMAGING

282,002

129,606

2,066

59,318

2,739

231,411

ELECTRODIAGNOSTIC APPARATUS

153,168

35,615

1,075

26,277

2,188

76,878

RADIATION APPARATUS

87,034

51,814

229

19,381

5

84,172

IMAGING PARTS & ACCESSORIES

41,800

42,177

762

13,660

546

70,361

DENTAL PRODUCTS

48,708

45,727

14,255

4,144

19,201

93,365

CAPITAL EQUIPMENT

7,592

5,789

0

1,125

65

15,331

41,116

39,938

14,255

3,019

19,136

78,034

12,432

106,660

300,112

CONSUMABLES BANDAGES & DRESSINGS SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS

INSTRUMENTS & SUPPLIES

ORTHOPAEDICS & PROSTHETICS

373,773

53,973 128,925

PATIENT AIDS

137,829

23,852

93,590 120,449

111,229

182,935

PORTABLE AIDS

106,234

16,838

89,485

34,274

109,803

159,292

31,595

7,014

4,105

86,175

1,426

23,643

114,175 103,948

60,511

35,431

425,827

386,383 367,586 306,725

291,571

1,406,378

THERAPEUTIC APPLIANCES

OTHERS

TOTAL

607,369

1,701,060

Source: BMI Espicom

© Espicom Business Intelligence

Page 67

Australia Medical Devices Report Q2 2014

Table: Leading Medical Device Suppliers By Product Area (% Distribution)

USA

Germany

Ireland

China

Switzerland

EU-27

CONSUMABLES

39.5

3.0

3.9

7.8

2.6

27.1

BANDAGES & DRESSINGS

13.1

4.2

0.5

23.2

0.7

42.5

SUTURING MATERIALS

77.6

3.1

0.0

0.0

4.1

17.0

SYRINGES, NEEDLES & CATHETERS

45.3

3.0

7.4

2.6

2.8

21.7

OTHER CONSUMABLES

20.1

0.3

0.5

8.9

3.3

32.0

DIAGNOSTIC IMAGING

39.7

18.2

0.3

8.4

0.4

32.6

ELECTRODIAGNOSTIC APPARATUS

48.2

11.2

0.3

8.3

0.7

24.2

RADIATION APPARATUS

40.0

23.8

0.1

8.9

0.0

38.7

IMAGING PARTS & ACCESSORIES

23.9

24.1

0.4

7.8

0.3

40.2

DENTAL PRODUCTS

21.3

20.0

6.2

1.8

8.4

40.8

CAPITAL EQUIPMENT

26.6

20.3

0.0

3.9

0.2

53.8

INSTRUMENTS & SUPPLIES

20.5

19.9

7.1

1.5

9.6

39.0

ORTHOPAEDICS & PROSTHETICS

45.0

6.5

15.5

1.5

12.8

36.1

PATIENT AIDS

19.9

3.4

13.5

17.4

16.1

26.4

PORTABLE AIDS

21.5

3.4

18.1

6.9

22.2

32.2

THERAPEUTIC APPLIANCES

16.0

3.5

2.1

43.6

0.7

12.0

OTHERS

42.6

8.0

7.3

4.2

2.5

29.9

TOTAL

37.6

8.5

8.1

6.8

6.4

31.1

Source: BMI Espicom

© Espicom Business Intelligence

Page 68

Australia Medical Devices Report Q2 2014

Table: Top 20 Medical Device Suppliers (US$000s)

Country

2012

% of Total

1,701,060

37.6

1

USA

2

Germany

386,383

8.5

3

Ireland

367,586

8.1

4

China

306,725

6.8

5

Switzerland

291,571

6.4

6

Japan

184,306

4.1

7

United Kingdom

163,147

3.6

8

Singapore

135,334

3.0

9

Mexico

111,859

2.5

10

France

84,872

1.9

11

Netherlands

83,440

1.8

12

Denmark

67,114

1.5

13

Italy

65,097

1.4

14

Malaysia

50,575

1.1

15

Finland

47,701

1.1

16

Sweden

42,964

0.9

17

Taiwan

42,402

0.9

18

Costa Rica

36,754

0.8

19

New Zealand

34,992

0.8

20

Canada

26,827

0.6

4,230,709

93.5

292,903

6.5

4,523,612

100.0

Subtotal

Others

Total

Source: BMI Espicom

© Espicom Business Intelligence

Page 69

Australia Medical Devices Report Q2 2014

Table: Detailed Medical Device Imports By Product Area, 2008-2012 (US$000s)

2008

2009

2010

2011

2012

CONSUMABLES

449,953

459,804

520,038

637,885

637,081

BANDAGES & DRESSINGS

113,412

111,442

137,261

187,099

149,530

Medical dressings (adhesive)

50,161

48,049

56,174

70,564

69,520

Medical dressings (non-adhesive)

63,251

63,393

81,087

116,535

80,010

SUTURING MATERIALS

61,158

59,873

61,776

76,309

92,225

251,618

251,132

257,615

300,683

320,161

Syringes (with/without needles)

35,513

44,342

46,311

50,715

50,595

Tubular metal needles/needles for sutures

26,466

30,015

28,501

33,574

35,650

189,639

176,775

182,803

216,394

233,916

OTHER CONSUMABLES

23,765

37,357

63,386

73,794

75,165

Blood-grouping reagents

6,040

4,059

4,602

6,357

5,135

First-aid boxes & kits

2,797

2,383

3,598

4,483

6,748

914

17,582

35,519

35,483

39,872

14,014

13,333

19,667

27,471

23,410

DIAGNOSTIC IMAGING

485,171

498,508

573,551

625,215

710,258

ELECTRODIAGNOSTIC APPARATUS

233,212

244,243

278,101

302,136

317,717

9,765

9,785

13,075

15,211

14,838

Ultrasound

74,334

78,222

81,610

87,865

86,742

MRI

27,144

45,924

51,807

55,510

72,217

2,217

1,696

3,968

3,459

4,040

Other electrodiagnostic apparatus

119,752

108,616

127,641

140,091

139,880

RADIATION APPARATUS

118,564

127,651

147,009

153,395

217,698

CT scanners

23,716

32,748

43,599

64,238

93,374

Other medical x-ray apparatus

87,532

93,551

100,776

86,124

116,232

SYRINGES, NEEDLES & CATHETERS

Other needles, catheters, cannulae etc

Ostomy products Surgical gloves

Electrocardiographs

Scintigraphic apparatus

© Espicom Business Intelligence

Page 70

Australia Medical Devices Report Q2 2014

Detailed Medical Device Imports By Product Area, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

7,316

1,352

2,634

3,033

8,092

133,395

126,614

148,441

169,684

174,843

Contrast media

26,744

25,172

31,022

32,052

33,830

Medical x-ray film (flat)

20,741

21,707

23,104

25,202

23,235

240

171

140

181

353

X-ray tubes

16,493

18,166

19,497

21,106

24,315

Other imaging parts & accessories

69,177

61,398

74,678

91,143

93,110

DENTAL PRODUCTS

164,828

178,962

196,840

215,630

228,729

CAPITAL EQUIPMENT

20,011

25,340

35,290

28,038

28,500

Dental drills

1,730

3,075

3,499

2,367

2,036

Dental chairs

8,466

8,364

12,401

9,992

9,055

Dental x-ray

9,815

13,901

19,390

15,679

17,409

144,817

153,622

161,550

187,592

200,229

Dental cements

28,544

30,347

32,782

47,472

52,964

Dental instruments

71,208

78,563

75,056

83,815

89,012

Teeth & other fittings

45,065

44,712

53,712

56,305

58,253

5,296

5,534

11,380

12,516

13,524

39,769

39,178

42,332

43,789

44,729

ORTHOPAEDICS & PROSTHETICS

536,706

553,455

652,432

845,462

830,236

FIXATION DEVICES

141,003

110,224

134,204

219,541

201,138

ARTIFICIAL JOINTS

170,803

156,388

194,009

244,735

279,894

OTHER ARTIFICIAL BODY PARTS

224,900

286,843

324,219

381,186

349,204

PATIENT AIDS

557,582

490,274

601,442

713,719

692,528

PORTABLE AIDS

422,793

364,011

417,392

510,670

494,795

75,454

65,090

78,838

96,785

86,481

A, B, C ray apparatus

IMAGING PARTS & ACCESSORIES

Medical x-ray film (rolled)

INSTRUMENTS & SUPPLIES

Artificial teeth Other dental fittings

Hearing aids

© Espicom Business Intelligence

Page 71

Australia Medical Devices Report Q2 2014

Detailed Medical Device Imports By Product Area, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

Pacemakers

121,172

116,281

130,614

146,838

177,406

Other portable aids

226,167

182,640

207,940

267,047

230,908

THERAPEUTIC APPLIANCES

134,789

126,263

184,050

203,049

197,733

Mechano-therapy apparatus

63,141

53,446

60,690

69,469

80,433

Therapeutic respiration apparatus

71,648

72,817

123,360

133,580

117,300

OTHERS

965,105 1,005,186 1,140,024 1,317,076 1,424,780

WHEELCHAIRS

25,773

23,724

27,203

30,355

31,320

Wheelchairs, not mechanically propelled

11,103

9,873

10,597

12,822

13,319

Wheelchairs, mechanically propelled

14,670

13,851

16,606

17,533

18,001

OPHTHALMIC INSTRUMENTS

60,986

61,683

64,173

79,971

90,491

HOSPITAL FURNITURE

39,883

33,979

40,470

48,719

56,998

MEDICAL, SURGICAL STERILISERS

16,051

16,848

18,379

19,769

21,846

1,764

1,509

2,362

2,228

3,906

OTHER INSTRUMENTS & APPLIANCES

820,648

867,443

Anaesthetic apparatus and instruments

86,450

91,379

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

TOTAL

987,437 1,136,034 1,220,219 98,407

96,152

120,742

3,159,345 3,186,189 3,684,327 4,354,987 4,523,612

Source: BMI Espicom

© Espicom Business Intelligence

Page 72

Australia Medical Devices Report Q2 2014

Table: Detailed Medical Device Import Trends By Product Area

2012 % of Total

CONSUMABLES

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

14.1

-0.1

-0.5

10.8

6.2

BANDAGES & DRESSINGS

3.3

-20.1

-20.3

9.6

5.1

Medical dressings (adhesive)

1.5

-1.5

-1.8

10.6

6.0

Medical dressings (nonadhesive)

1.8

-31.3

-31.6

8.8

4.3

SUTURING MATERIALS

2.0

20.9

20.5

11.8

7.2

SYRINGES, NEEDLES & CATHETERS

7.1

6.5

6.1

8.6

4.0

Syringes (with/without needles)

1.1

-0.2

-0.6

8.0

3.5

Tubular metal needles/ needles for sutures

0.8

6.2

5.8

14.5

9.8

Other needles, catheters, cannulae etc

5.2

8.1

7.7

7.9

3.4

OTHER CONSUMABLES

1.7

1.9

1.5

27.1

21.8

Blood-grouping reagents

0.1

-19.2

-19.5

1.0

-3.2

First-aid boxes & kits

0.1

50.5

50.0

34.3

28.7

Ostomy products

0.9

12.4

12.0

463.8

440.3

Surgical gloves

0.5

-14.8

-15.1

7.6

3.1

DIAGNOSTIC IMAGING

15.7

13.6

13.2

9.8

5.3

ELECTRODIAGNOSTIC APPARATUS

7.0

5.2

4.8

6.5

2.0

Electrocardiographs

0.3

-2.5

-2.8

6.3

1.9

Ultrasound

1.9

-1.3

-1.6

7.0

2.5

MRI

1.6

30.1

29.7

14.7

9.9

© Espicom Business Intelligence

Page 73

Australia Medical Devices Report Q2 2014

Detailed Medical Device Import Trends By Product Area - Continued

2012 % of Total

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

Scintigraphic apparatus

0.1

16.8

16.4

12.8

8.1

Other electrodiagnostic apparatus

3.1

-0.2

-0.5

2.9

-1.3

RADIATION APPARATUS

4.8

41.9

41.5

19.8

14.8

CT scanners

2.1

45.4

44.9

34.9

29.3

Other medical x-ray apparatus

2.6

35.0

34.5

12.8

8.1

A, B, C ray apparatus

0.2

166.8

165.9

17.7

12.8

IMAGING PARTS & ACCESSORIES

3.9

3.0

2.7

7.2

2.7

Contrast media

0.7

5.5

5.2

14.0

9.3

Medical x-ray film (flat)

0.5

-7.8

-8.1

-0.9

-5.0

Medical x-ray film (rolled)

0.0

95.0

94.4

19.3

14.3

X-ray tubes

0.5

15.2

14.8

7.8

3.3

Other imaging parts & accessories

2.1

2.2

1.8

7.5

3.0

DENTAL PRODUCTS

5.1

6.1

5.7

10.1

5.6

CAPITAL EQUIPMENT

0.6

1.6

1.3

12.4

7.7

Dental drills

0.0

-14.0

-14.3

11.3

6.7

Dental chairs

0.2

-9.4

-9.7

4.4

0.1

Dental x-ray

0.4

11.0

10.7

18.5

13.6

INSTRUMENTS & SUPPLIES

4.4

6.7

6.4

9.8

5.3

Dental cements

1.2

11.6

11.2

18.7

13.8

Dental instruments

2.0

6.2

5.9

6.0

1.6

Teeth & other fittings

1.3

3.5

3.1

9.9

5.3

Artificial teeth

0.3

8.1

7.7

24.9

19.7

Other dental fittings

1.0

2.1

1.8

7.0

2.5

© Espicom Business Intelligence

Page 74

Australia Medical Devices Report Q2 2014

Detailed Medical Device Import Trends By Product Area - Continued

2012 % of Total

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

ORTHOPAEDICS & PROSTHETICS

18.4

-1.8

-2.1

12.9

8.1

FIXATION DEVICES

4.4

-8.4

-8.7

11.1

6.4

ARTIFICIAL JOINTS

6.2

14.4

14.0

12.0

7.4

OTHER ARTIFICIAL BODY PARTS

7.7

-8.4

-8.7

14.7

9.9

PATIENT AIDS

15.3

-3.0

-3.3

6.7

2.3

PORTABLE AIDS

10.9

-3.1

-3.4

5.3

0.9

Hearing aids

1.9

-10.6

-10.9

5.6

1.2

Pacemakers

3.9

20.8

20.4

8.3

3.8

Other portable aids

5.1

-13.5

-13.8

3.2

-1.1

THERAPEUTIC APPLIANCES

4.4

-2.6

-2.9

10.9

6.3

Mechano-therapy apparatus

1.8

15.8

15.4

5.5

1.1

Therapeutic respiration apparatus

2.6

-12.2

-12.5

15.9

11.1

31.5

8.2

7.8

12.7

8.0

WHEELCHAIRS

0.7

3.2

2.8

8.0

3.5

Wheelchairs, not mechanically propelled

0.3

3.9

3.5

11.5

6.9

Wheelchairs, mechanically propelled

0.4

2.7

2.3

5.8

1.4

OPHTHALMIC INSTRUMENTS

2.0

13.2

12.8

12.4

7.7

HOSPITAL FURNITURE

1.3

17.0

16.6

12.7

8.0

MEDICAL, SURGICAL STERILISERS

0.5

10.5

10.1

12.0

7.4

OTHERS

© Espicom Business Intelligence

Page 75

Australia Medical Devices Report Q2 2014

Detailed Medical Device Import Trends By Product Area - Continued

2012 % of Total

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

0.1

75.3

74.7

11.0

6.3

27.0

7.4

7.1

12.8

8.1

2.7

25.6

25.2

10.1

5.5

100.0

3.9

3.5

10.8

6.2

OTHER INSTRUMENTS & APPLIANCES Anaesthetic apparatus and instruments

TOTAL

Latest Year % Latest Year % Change Change, US$ (Local Currency)

Source: BMI Espicom

Table: Detailed Leading Medical Device Suppliers By Product Area (US$000s)

USA

Germany

Ireland

China

Switzerland

EU-27

251,379

19,050

24,802

49,871

16,311

172,728

BANDAGES & DRESSINGS

19,642

6,250

711

34,665

1,034

63,594

Medical dressings (adhesive)

9,596

3,064

709

7,061

227

37,270

Medical dressings (non-adhesive)

10,046

3,186

2

27,604

807

26,324

SUTURING MATERIALS

71,540

2,859

0

39

3,749

15,687

145,122

9,740

23,706

8,461

9,084

69,388

18,690

864

1,595

2,862

532

10,132

7,798

1,104

3,813

656

98

9,517

118,634

7,772

18,298

4,943

8,454

49,739

OTHER CONSUMABLES

15,075

201

385

6,706

2,444

24,059

Blood-grouping reagents

2,371

64

0

0

2,261

472

CONSUMABLES

SYRINGES, NEEDLES & CATHETERS Syringes (with/without needles) Tubular metal needles/needles for sutures Other needles, catheters, cannulae etc

© Espicom Business Intelligence

Page 76

Australia Medical Devices Report Q2 2014

Detailed Leading Medical Device Suppliers By Product Area (US$000s) - Continued

USA

Germany

Ireland

China

Switzerland

EU-27

114

4

2

6,190

10

243

12,228

133

383

159

173

23,310

362

0

0

357

0

34

DIAGNOSTIC IMAGING

282,002

129,606

2,066

59,318

2,739

231,411

ELECTRODIAGNOSTIC APPARATUS

153,168

35,615

1,075

26,277

2,188

76,878

5,220

1,801

9

689

810

3,175

Ultrasound

54,998

634

0

4,630

104

4,634

MRI

23,056

14,670

0

13,142

0

34,369

3,155

51

0

12

0

100

Other electrodiagnostic apparatus

66,739

18,459

1,066

7,804

1,274

34,600

RADIATION APPARATUS

87,034

51,814

229

19,381

5

84,172

CT scanners

41,036

18,284

229

16,682

0

19,835

Other medical x-ray apparatus

42,174

33,398

0

2,699

5

63,867

3,824

132

0

0

0

470

41,800

42,177

762

13,660

546

70,361

Contrast media

3,723

9,265

605

6,533

0

19,506

Medical x-ray film (flat)

8,103

626

0

1

0

1,512

67

0

0

0

0

250

9,485

10,381

0

284

102

11,747

Other imaging parts & accessories

20,422

21,905

157

6,842

444

37,346

DENTAL PRODUCTS

48,708

45,727

14,255

4,144

19,201

93,365

CAPITAL EQUIPMENT

7,592

5,789

0

1,125

65

15,331

66

264

0

3

48

1,251

Dental chairs

4,238

734

0

1,122

15

2,368

Dental x-ray

3,288

4,791

0

0

2

11,712

41,116

39,938

14,255

3,019

19,136

78,034

First-aid boxes & kits Ostomy products Surgical gloves

Electrocardiographs

Scintigraphic apparatus

A, B, C ray apparatus

IMAGING PARTS & ACCESSORIES

Medical x-ray film (rolled) X-ray tubes

Dental drills

INSTRUMENTS & SUPPLIES

© Espicom Business Intelligence

Page 77

Australia Medical Devices Report Q2 2014

Detailed Leading Medical Device Suppliers By Product Area (US$000s) - Continued

USA

Germany

Ireland

China

Switzerland

EU-27

6,007

9,935

13,916

2

2,874

26,421

Dental instruments

22,175

28,073

234

2,801

9,374

42,253

Teeth & other fittings

12,934

1,930

105

216

6,888

9,360

358

0

0

195

39

1,009

12,576

1,930

105

21

6,849

8,351

ORTHOPAEDICS & PROSTHETICS

373,773

53,973

128,925

12,432

106,660

300,112

FIXATION DEVICES

108,395

17,686

394

7,395

48,113

26,474

ARTIFICIAL JOINTS

124,724

13,329

51,030

3,461

27,482

122,584

OTHER ARTIFICIAL BODY PARTS

140,654

22,958

77,501

1,576

31,065

151,054

PATIENT AIDS

137,829

23,852

93,590

120,449

111,229

182,935

PORTABLE AIDS

106,234

16,838

89,485

34,274

109,803

159,292

Hearing aids

1,905

388

0

22,239

6,734

15,817

Pacemakers

36,268

7,692

25,480

0

88,786

36,575

Other portable aids

68,061

8,758

64,005

12,035

14,283

106,900

THERAPEUTIC APPLIANCES

31,595

7,014

4,105

86,175

1,426

23,643

Mechano-therapy apparatus

11,615

1,214

1,443

46,282

681

8,385

Therapeutic respiration apparatus

19,980

5,800

2,662

39,893

745

15,258

607,369

114,175

103,948

60,511

35,431

425,827

WHEELCHAIRS

7,563

1,410

11

8,158

186

2,947

Wheelchairs, not mechanically propelled

3,444

568

11

4,009

186

1,695

Wheelchairs, mechanically propelled

4,119

842

0

4,149

0

1,252

OPHTHALMIC INSTRUMENTS

48,461

8,264

13

670

6,201

21,036

HOSPITAL FURNITURE

13,115

7,438

7

15,604

138

16,410

Dental cements

Artificial teeth Other dental fittings

OTHERS

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Detailed Leading Medical Device Suppliers By Product Area (US$000s) - Continued

USA

Germany

Ireland

China

Switzerland

EU-27

MEDICAL, SURGICAL STERILISERS

3,345

3,993

0

292

960

12,737

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

2,512

209

0

91

17

1,004

OTHER INSTRUMENTS & APPLIANCES

532,373

92,861

103,917

35,696

27,929

371,693

Anaesthetic apparatus and instruments

24,126

5,655

2,509

6,961

372

27,118

1,701,060

386,383

367,586

306,725

TOTAL

291,571 1,406,378

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Monthly Medical Device Imports The latest Australian monthly trade data reveals that medical device imports increased by 2.2% in US dollar terms in the 12 months to October 2013, taking the running annual total to US$4,571.6mn. The highest growth was recorded in the patient aids sector, which increased by 9.0% over the 12 month period to US $749.0mn. Imports of orthopaedics & prosthetics and consumables also increased - by 6.1% and 3.3% respectively. The largest market segment, other medical devices, showed a marginal 0.5% increase to US $1,407.4mn.

Medical device imports grew by 1.2% to US$1,188.4mn over the three months to October 2013, compared with the corresponding period in 2012. Growth was achieved in the patient aids and orthopaedics & prosthetics sectors which increased by 15.1% and 4.1% respectively. All other sectors experienced a drop in imports over the quarter. The sharpest decline was in the demand for diagnostic imaging products which fell by 7.9%, followed by dental products which decreased by 6.9%.

Table: Monthly Medical Device Imports By Product Area, September 2010-October 2013 (US$mn)

Consumables

Diagnostic

Dental

Orthopaedics

Patient Aids

Others

Total

Sep-10

47.7

50.5

17.2

59.4

51.7

99.7

326.2

Oct-10

45.5

49.9

15.1

53.7

55.3

99.0

318.5

Nov-10

48.7

56.7

17.4

64.5

54.9

109.0

351.3

Dec-10

50.0

60.2

14.9

46.7

56.0

106.6

334.4

Jan-11

48.7

43.1

12.5

52.3

51.0

88.0

295.6

Feb-11

45.2

44.7

15.6

80.7

58.3

93.4

337.9

Mar-11

56.4

51.2

19.0

80.5

67.2

137.8

412.0

Apr-11

50.0

56.4

17.6

75.3

54.7

118.6

372.7

May-11

57.2

55.4

19.1

76.9

60.0

113.7

382.3

Jun-11

53.9

61.6

18.9

67.9

55.1

111.4

368.8

Jul-11

51.4

52.9

17.3

82.8

66.1

110.5

380.9

Aug-11

56.6

57.7

20.2

84.2

58.7

117.8

395.2

Sep-11

52.7

49.9

18.1

64.6

53.1

109.3

347.8

Oct-11

53.8

57.0

18.7

60.1

66.1

107.3

363.0

Nov-11

60.1

48.7

20.5

71.6

68.9

109.2

378.9

Dec-11

47.4

50.4

19.1

50.4

54.4

102.6

324.3

Jan-12

52.4

41.5

15.6

57.4

50.7

96.9

314.5

Feb-12

49.2

51.3

18.2

75.3

52.9

127.0

373.9

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Monthly Medical Device Imports By Product Area, September 2010-October 2013 (US$mn) - Continued

Consumables

Diagnostic

Dental

Orthopaedics

Patient Aids

Others

Total

Mar-12

54.0

59.0

20.2

77.6

55.8

120.6

387.3

Apr-12

49.8

58.4

17.5

67.2

48.0

120.3

361.2

May-12

51.3

65.2

19.8

70.1

55.6

117.2

379.2

Jun-12

49.5

88.4

19.3

70.5

56.7

115.2

399.5

Jul-12

49.2

57.5

20.0

69.7

59.2

122.5

378.2

Aug-12

60.1

62.8

19.5

79.4

60.1

122.3

404.3

Sep-12

47.4

56.1

19.0

68.8

53.9

115.2

360.4

Oct-12

64.2

54.4

18.7

69.7

71.1

131.5

409.6

Nov-12

55.4

64.5

20.8

67.5

68.6

118.6

395.5

Dec-12

54.5

51.3

20.1

56.9

59.9

117.5

360.1

Jan-13

50.1

47.8

15.3

63.9

55.4

103.9

336.5

Feb-13

51.6

43.8

17.7

78.5

64.6

97.7

353.9

Mar-13

58.4

59.4

20.8

79.4

55.5

114.4

387.9

Apr-13

54.8

53.2

17.1

77.6

56.1

118.4

377.2

May-13

58.1

67.4

19.7

75.2

61.4

115.4

397.2

Jun-13

51.7

63.4

19.5

69.7

58.5

125.0

387.9

Jul-13

52.6

47.5

19.2

82.6

55.8

129.3

387.0

Aug-13

56.0

60.7

16.9

71.5

77.6

121.4

404.1

Sep-13

52.2

47.1

18.4

79.8

74.5

118.7

390.7

Oct-13

60.2

51.7

18.0

75.6

60.9

127.2

393.6

Oct-12

171.8

173.2

57.2

217.9

185.1

369.0

1,174.3

Oct-13

168.5

159.5

53.3

226.8

213.1

367.3

1,188.4

-1.9

-7.9

-6.9

4.1

15.1

-0.5

1.2

Oct-12

634.7

693.5

227.3

827.8

687.4

1,400.5

4,471.2

Oct-13

655.6

657.8

223.7

878.2

749.0

1,407.4

4,571.6

Quarter to

Qtr % +/-

Year to

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Monthly Medical Device Imports By Product Area, September 2010-October 2013 (US$mn) - Continued

Consumables

Diagnostic

Dental

Orthopaedics

Patient Aids

Others

Total

3.3

-5.2

-1.6

6.1

9.0

0.5

2.2

12 months % +/-

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Annual Medical Device Exports Australian medical device exports bounced back strongly from the dip in 2009, recording strong growth over the 2010-2012 period. In 2012, exports rose by 10.5% to reach US$1,696.0mn.

The CAGR for medical device exports in US dollar terms, over the 2007-2012 period was 6.1%. Segments which outperformed the overall sector included orthopaedic & prosthetic products (19.5%) and dental products (11.8%).

The leading destination for Australian exports is the USA, which accounted for 32.4% of the total in 2012, importing goods to the value of US$549.4mn. Strong export markets also included New Zealand and the United Kingdom, which took 14.4% and 12.6% of the total, respectively.

Medical Device Exports, 2002-2012 US$mn

Source: BMI Espicom

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Change In Medical Device Exports, 2003-2012 %

Source: BMI Espicom

Consumables

Australian exports of consumables reached US$59.0mn in 2012, making up just 3.5% of the total, and expanding at a CAGR of 4.0% over the 2007-2012. period. The largest segment within the consumables sector is syringes, needles & catheters with shipments totalling US$37.3mn in 2012.

Diagnostic Imaging

Diagnostic imaging exports totalled US$83.5mn in 2012, equal to 4.9% of total device exports. Much of this category's value lies in electrodiagnostic apparatus which totalled US$57.1mn in 2012. Exports fell by 17.5% in 2012 as a direct result of a 27.7% decline in shipments of electrodiagnostic apparatus.

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Dental Products

Dental product exports represented 3.5% of total exports in 2012 at a value of US$59.1mn. Exports rose by 21.5% over the previous year and increased at a CAGR of 11.8% during the 2007-2012 period. Instruments & supplies account for almost the entire category, amounting to US$57.5mn in 2012.

Orthopaedics & Prosthetics

Orthopaedic & prosthetics exports fell by 11.7% to total US$86.4mn in 2012. The category made up just 5.1% of total Australian device exports in 2012. Most exports in this category are classed under artificial body parts, exports of which totalled US$78.2mn in 2012.

Patient Aids

Patient aids is by far the largest segment of Australia's medical device export sector. In 2012, it represented 61.7% of total exports, with a total value of US$1,047.2mn. The category is split fairly evenly between therapeutic appliances and portable aids.

The category rose by 9.8% in 2012, well ahead of the CAGR for the 2007-2012 period of 4.8%. The growth in 2012 was all due to a 21.8% rise in exports of portable aids to US$545.0mn. Exports of therapeutic appliances showed a slight decline in 2012.

The USA is the leading destination for Australian exports of patient aids. In 2012, these amounted to US $460.8mn, equal to 44.0% of the total. The UK is another important market, receiving exports valued at US $194.2mn in 2012. Exports to the Netherlands totalled US$104.1mn.

Table: Medical Device Exports By Product Area, 2008-2012 (US$000s)

2008

2009

2010

2011

2012

CONSUMABLES

50,250

41,394

49,995

50,359

58,954

BANDAGES & DRESSINGS

12,024

10,238

13,057

11,771

7,522

7,702

2,570

4,601

3,597

2,655

25,590

23,804

25,607

29,269

37,267

4,934

4,782

6,730

5,722

11,510

SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS OTHER CONSUMABLES

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Australia Medical Devices Report Q2 2014

Medical Device Exports By Product Area, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

DIAGNOSTIC IMAGING

69,356

69,464

90,988

101,265

83,510

ELECTRODIAGNOSTIC APPARATUS

45,821

48,063

70,037

78,906

57,053

5,992

6,588

7,566

4,085

6,496

IMAGING PARTS & ACCESSORIES

17,543

14,813

13,385

18,274

19,961

DENTAL PRODUCTS

43,559

39,645

42,285

48,621

59,082

CAPITAL EQUIPMENT

1,707

1,450

1,457

4,639

1,619

INSTRUMENTS & SUPPLIES

41,852

38,195

40,828

43,982

57,463

ORTHOPAEDICS & PROSTHETICS

58,613

37,412

68,476

97,906

86,423

PATIENT AIDS

817,055

717,512

905,745

953,316

1,047,179

PORTABLE AIDS

347,622

296,097

399,755

447,578

544,980

THERAPEUTIC APPLIANCES

469,433

421,415

505,990

505,738

502,199

OTHERS

301,228

284,658

300,075

283,494

360,835

1,340,061

1,190,085

1,457,564

1,534,961

1,695,983

RADIATION APPARATUS

TOTAL

Source: BMI Espicom

Table: Medical Device Exports By Product Area, 2008-2012 (US$000s, % Change)

CONSUMABLES BANDAGES & DRESSINGS SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS OTHER CONSUMABLES

© Espicom Business Intelligence

2008

2009

2010

2011

2012

3.9

-17.6

20.8

0.7

17.1

-8.4

-14.9

27.5

-9.8

-36.1

-13.7

-66.6

79.0

-21.8

-26.2

23.6

-7.0

7.6

14.3

27.3

-12.2

-3.1

40.7

-15.0

101.2

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Australia Medical Devices Report Q2 2014

Medical Device Exports By Product Area, 2008-2012 (US$000s, % Change) - Continued

2008

2009

2010

2011

2012

DIAGNOSTIC IMAGING

11.9

0.2

31.0

11.3

-17.5

ELECTRODIAGNOSTIC APPARATUS

25.2

4.9

45.7

12.7

-27.7

RADIATION APPARATUS

20.6

9.9

14.8

-46.0

59.0

-14.0

-15.6

-9.6

36.5

9.2

DENTAL PRODUCTS

29.0

-9.0

6.7

15.0

21.5

CAPITAL EQUIPMENT

-29.3

-15.1

0.5

218.4

-65.1

INSTRUMENTS & SUPPLIES

33.5

-8.7

6.9

7.7

30.7

ORTHOPAEDICS & PROSTHETICS

65.5

-36.2

83.0

43.0

-11.7

PATIENT AIDS

-1.4

-12.2

26.2

5.3

9.8

4.7

-14.8

35.0

12.0

21.8

THERAPEUTIC APPLIANCES

-5.4

-10.2

20.1

0.0

-0.7

OTHERS

19.9

-5.5

5.4

-5.5

27.3

6.4

-11.2

22.5

5.3

10.5

IMAGING PARTS & ACCESSORIES

PORTABLE AIDS

TOTAL

Source: BMI Espicom

Table: Medical Device Exports By Product Area, 2008-2012 (Local Currency 000s)

2008

2009

2010

2011

2012

CONSUMABLES

60,095

52,996

54,459

48,787

56,928

BANDAGES & DRESSINGS

14,380

13,108

14,223

11,404

7,263

9,211

3,290

5,012

3,485

2,564

30,604

30,476

27,893

28,356

35,986

OTHER CONSUMABLES

5,901

6,122

7,331

5,543

11,114

DIAGNOSTIC IMAGING

82,945

88,934

99,112

98,105

80,640

ELECTRODIAGNOSTIC APPARATUS

54,799

61,534

76,290

76,444

55,092

SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Medical Device Exports By Product Area, 2008-2012 (Local Currency 000s) - Continued

2008

2009

2010

2011

2012

7,166

8,435

8,242

3,958

6,273

IMAGING PARTS & ACCESSORIES

20,980

18,965

14,580

17,704

19,275

DENTAL PRODUCTS

52,093

50,757

46,060

47,104

57,051

CAPITAL EQUIPMENT

2,041

1,856

1,587

4,494

1,563

INSTRUMENTS & SUPPLIES

50,052

48,900

44,473

42,609

55,488

ORTHOPAEDICS & PROSTHETICS

70,097

47,898

74,590

94,851

83,453

PATIENT AIDS

977,137

918,620

986,613

923,566

1,011,187

PORTABLE AIDS

415,730

379,089

435,446

433,611

526,249

THERAPEUTIC APPLIANCES

561,407

539,531

551,166

489,956

484,938

OTHERS

360,246

364,443

326,867

274,647

348,433

1,602,614

1,523,648

1,587,700

1,487,060

1,637,691

RADIATION APPARATUS

TOTAL

Source: BMI Espicom

Table: Medical Device Exports By Product Area, 2008-2012 (Local Currency 000s, % Change)

2008

2009

2010

2011

2012

4.0

-11.8

2.8

-10.4

16.7

-8.3

-8.8

8.5

-19.8

-36.3

-13.6

-64.3

52.3

-30.5

-26.4

23.7

-0.4

-8.5

1.7

26.9

OTHER CONSUMABLES

-12.1

3.8

19.7

-24.4

100.5

DIAGNOSTIC IMAGING

12.0

7.2

11.4

-1.0

-17.8

ELECTRODIAGNOSTIC APPARATUS

25.3

12.3

24.0

0.2

-27.9

RADIATION APPARATUS

20.7

17.7

-2.3

-52.0

58.5

-13.9

-9.6

-23.1

21.4

8.9

CONSUMABLES BANDAGES & DRESSINGS SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS

IMAGING PARTS & ACCESSORIES

© Espicom Business Intelligence

Page 88

Australia Medical Devices Report Q2 2014

Medical Device Exports By Product Area, 2008-2012 (Local Currency 000s, % Change) - Continued

2008

2009

2010

2011

2012

DENTAL PRODUCTS

29.2

-2.6

-9.3

2.3

21.1

CAPITAL EQUIPMENT

-29.3

-9.1

-14.5

183.2

-65.2

INSTRUMENTS & SUPPLIES

33.7

-2.3

-9.1

-4.2

30.2

ORTHOPAEDICS & PROSTHETICS

65.7

-31.7

55.7

27.2

-12.0

PATIENT AIDS

-1.3

-6.0

7.4

-6.4

9.5

4.8

-8.8

14.9

-0.4

21.4

THERAPEUTIC APPLIANCES

-5.4

-3.9

2.2

-11.1

-1.0

OTHERS

20.1

1.2

-10.3

-16.0

26.9

6.5

-4.9

4.2

-6.3

10.1

2008

2009

2010

2011

2012

CONSUMABLES

3.7

3.5

3.4

3.3

3.5

BANDAGES & DRESSINGS

0.9

0.9

0.9

0.8

0.4

SUTURING MATERIALS

0.6

0.2

0.3

0.2

0.2

SYRINGES, NEEDLES & CATHETERS

1.9

2.0

1.8

1.9

2.2

OTHER CONSUMABLES

0.4

0.4

0.5

0.4

0.7

DIAGNOSTIC IMAGING

5.2

5.8

6.2

6.6

4.9

ELECTRODIAGNOSTIC APPARATUS

3.4

4.0

4.8

5.1

3.4

RADIATION APPARATUS

0.4

0.6

0.5

0.3

0.4

IMAGING PARTS & ACCESSORIES

1.3

1.2

0.9

1.2

1.2

PORTABLE AIDS

TOTAL

Source: BMI Espicom

Table: Medical Device Exports By Product Area, 2008-2012 (% Distribution)

© Espicom Business Intelligence

Page 89

Australia Medical Devices Report Q2 2014

Medical Device Exports By Product Area, 2008-2012 (% Distribution) - Continued

2008

2009

2010

2011

2012

DENTAL PRODUCTS

3.3

3.3

2.9

3.2

3.5

CAPITAL EQUIPMENT

0.1

0.1

0.1

0.3

0.1

INSTRUMENTS & SUPPLIES

3.1

3.2

2.8

2.9

3.4

ORTHOPAEDICS & PROSTHETICS

4.4

3.1

4.7

6.4

5.1

PATIENT AIDS

61.0

60.3

62.1

62.1

61.7

PORTABLE AIDS

25.9

24.9

27.4

29.2

32.1

THERAPEUTIC APPLIANCES

35.0

35.4

34.7

32.9

29.6

OTHERS

22.5

23.9

20.6

18.5

21.3

100.0

100.0

100.0

100.0

100.0

Netherlands Japan

EU-27

TOTAL

Source: BMI Espicom

Table: Leading Medical Device Destinations By Product Area (US$000s)

USA

New Zealand

UK

3,942

21,972

1,756

1,128

3,568

11,075

283

4,567

1,105

0

0

1,178

3,481

13,366

221

1,123

3,556

9,206

OTHER CONSUMABLES

178

4,039

430

5

12

691

DIAGNOSTIC IMAGING

15,904

19,393

1,469

3,760

3,102

14,439

ELECTRODIAGNOSTIC APPARATUS

10,387

16,229

884

2,185

1,079

10,225

RADIATION APPARATUS

1,553

818

34

48

14

1,094

IMAGING PARTS & ACCESSORIES

3,964

2,346

551

1,527

2,009

3,120

DENTAL PRODUCTS

6,890

17,411

383

532

611

12,844

CONSUMABLES BANDAGES & DRESSINGS SUTURING MATERIALS SYRINGES, NEEDLES & CATHETERS

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Leading Medical Device Destinations By Product Area (US$000s) - Continued

CAPITAL EQUIPMENT INSTRUMENTS & SUPPLIES

ORTHOPAEDICS & PROSTHETICS

USA

New Zealand

UK

Netherlands Japan

EU-27

152

903

262

0

4

388

6,738

16,508

121

532

607

12,456

12,055

15,883

4,743

1,499

2,557

41,705

PATIENT AIDS

460,837

28,678 194,234

104,122 55,943 318,454

PORTABLE AIDS

180,620

22,177 193,883

2,119 13,147 204,154

THERAPEUTIC APPLIANCES

280,217

6,501

351

49,734

140,659

10,486

OTHERS

TOTAL

549,362

243,996 213,071

102,003 42,796 114,300

4,378 27,836

68,900

115,419 93,617 467,417

Source: BMI Espicom

Table: Leading Medical Device Destinations By Product Area (% Distribution)

USA

New Zealand

UK

Netherlands

Japan

EU-27

CONSUMABLES

6.7

37.3

3.0

1.9

6.1

18.8

BANDAGES & DRESSINGS

3.8

60.7 14.7

0.0

0.0

15.7

SUTURING MATERIALS

0.0

0.0

0.0

0.0

0.0

0.0

SYRINGES, NEEDLES & CATHETERS

9.3

35.9

0.6

3.0

9.5

24.7

OTHER CONSUMABLES

1.5

35.1

3.7

0.0

0.1

6.0

DIAGNOSTIC IMAGING

19.0

23.2

1.8

4.5

3.7

17.3

ELECTRODIAGNOSTIC APPARATUS

18.2

28.4

1.5

3.8

1.9

17.9

RADIATION APPARATUS

23.9

12.6

0.5

0.7

0.2

16.8

IMAGING PARTS & ACCESSORIES

19.9

11.8

2.8

7.6

10.1

15.6

DENTAL PRODUCTS

11.7

29.5

0.6

0.9

1.0

21.7

CAPITAL EQUIPMENT

9.4

55.8 16.2

0.0

0.2

24.0

28.7

0.9

1.1

21.7

INSTRUMENTS & SUPPLIES

© Espicom Business Intelligence

11.7

0.2

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Australia Medical Devices Report Q2 2014

Leading Medical Device Destinations By Product Area (% Distribution) - Continued

USA

New Zealand

UK

Netherlands

Japan

EU-27

ORTHOPAEDICS & PROSTHETICS

13.9

18.4

5.5

1.7

3.0

48.3

PATIENT AIDS

44.0

2.7 18.5

9.9

5.3

30.4

PORTABLE AIDS

33.1

4.1 35.6

0.4

2.4

37.5

THERAPEUTIC APPLIANCES

55.8

1.3

0.1

20.3

8.5

22.8

OTHERS

13.8

39.0

2.9

1.2

7.7

19.1

TOTAL

32.4

14.4 12.6

6.8

5.5

27.6

Source: BMI Espicom

Table: Top 20 Medical Device Destinations (US$000s)

Country

2012

% of Total

1

United States of America

549,362

32.4

2

New Zealand

243,996

14.4

3

United Kingdom

213,071

12.6

4

Netherlands

115,419

6.8

5

Japan

93,617

5.5

6

China

91,789

5.4

7

Germany

75,067

4.4

8

Singapore

62,477

3.7

9

Denmark

29,968

1.8

10

South Korea

23,257

1.4

11

Panama

19,927

1.2

12

India

19,760

1.2

13

Papua New Guinea

12,327

0.7

14

Hong Kong

10,151

0.6

15

Ireland

9,667

0.6

16

Taiwan

9,664

0.6

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Top 20 Medical Device Destinations (US$000s) - Continued

Country

2012

% of Total

17

France

8,917

0.5

18

Malaysia

8,192

0.5

19

Philippines

8,040

0.5

20

Brazil

7,344

0.4

1,612,012

95.0

83,971

5.0

1,695,983

100.0

Subtotal

Others

Total

Source: BMI Espicom

Table: Detailed Medical Device Exports By Product Area, 2008-2012 (US$000s)

2008

2009

2010

2011

2012

CONSUMABLES

50,250

41,394

49,995

50,359

58,954

BANDAGES & DRESSINGS

12,024

10,238

13,057

11,771

7,522

Medical dressings (adhesive)

3,678

3,896

2,771

2,221

2,853

Medical dressings (non-adhesive)

8,346

6,342

10,286

9,550

4,669

SUTURING MATERIALS

7,702

2,570

4,601

3,597

2,655

25,590

23,804

25,607

29,269

37,267

3,919

2,293

3,937

4,416

6,678

Tubular metal needles/needles for sutures

11,484

5,443

735

6,641

14,581

Other needles, catheters, cannulae etc

10,187

16,068

20,935

18,212

16,008

OTHER CONSUMABLES

4,934

4,782

6,730

5,722

11,510

Blood-grouping reagents

2,496

2,593

1,525

1,529

1,910

896

820

1,434

594

952

SYRINGES, NEEDLES & CATHETERS Syringes (with/without needles)

First-aid boxes & kits

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Australia Medical Devices Report Q2 2014

Detailed Medical Device Exports By Product Area, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

1,011

681

3,316

2,942

7,920

531

688

455

657

728

DIAGNOSTIC IMAGING

69,356

69,464

90,988

101,265

83,510

ELECTRODIAGNOSTIC APPARATUS

45,821

48,063

70,037

78,906

57,053

Electrocardiographs

1,504

1,304

1,026

1,994

1,454

Ultrasound

7,458

11,249

6,004

10,236

14,209

MRI

1,055

1,926

3,256

4,150

3,219

234

346

792

299

155

35,570

33,238

58,959

62,227

38,016

RADIATION APPARATUS

5,992

6,588

7,566

4,085

6,496

CT scanners

1,275

946

2,632

571

307

Other medical x-ray apparatus

3,637

3,269

3,738

2,149

3,531

A, B, C ray apparatus

1,080

2,373

1,196

1,365

2,658

17,543

14,813

13,385

18,274

19,961

1,007

738

334

835

484

Medical x-ray film (flat)

843

751

782

1,322

1,447

Medical x-ray film (rolled)

150

239

53

174

162

3,083

3,501

3,376

2,510

2,330

Other imaging parts & accessories

12,460

9,584

8,840

13,433

15,538

DENTAL PRODUCTS

43,559

39,645

42,285

48,621

59,082

CAPITAL EQUIPMENT

1,707

1,450

1,457

4,639

1,619

167

71

70

40

76

1,028

996

1,076

2,443

1,009

512

383

311

2,156

534

INSTRUMENTS & SUPPLIES

41,852

38,195

40,828

43,982

57,463

Dental cements

23,744

22,076

23,035

26,784

35,539

Ostomy products Surgical gloves

Scintigraphic apparatus Other electrodiagnostic apparatus

IMAGING PARTS & ACCESSORIES Contrast media

X-ray tubes

Dental drills Dental chairs Dental x-ray

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Australia Medical Devices Report Q2 2014

Detailed Medical Device Exports By Product Area, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

12,428

12,404

15,335

15,235

18,214

5,680

3,715

2,458

1,963

3,710

167

124

182

310

100

5,513

3,591

2,276

1,653

3,610

58,613

37,412

68,476

97,906

86,423

FIXATION DEVICES

6,373

3,361

6,819

10,537

6,614

ARTIFICIAL JOINTS

2,157

796

1,321

1,367

1,581

50,083

33,255

60,336

86,002

78,228

PATIENT AIDS

817,055

717,512

905,745

953,316 1,047,179

PORTABLE AIDS

347,622

296,097

399,755

447,578

544,980

Hearing aids

61,232

57,549

154,057

170,361

234,399

Pacemakers

2,398

829

1,473

1,610

2,305

Other portable aids

283,992

237,719

244,225

275,607

308,276

THERAPEUTIC APPLIANCES

469,433

421,415

505,990

505,738

502,199

7,753

4,389

4,164

3,608

4,187

Therapeutic respiration apparatus

461,680

417,026

501,826

502,130

498,012

OTHERS

301,228

284,658

300,075

283,494

360,835

2,397

1,986

2,127

1,829

4,575

464

599

564

685

567

1,933

1,387

1,563

1,144

4,008

OPHTHALMIC INSTRUMENTS

36,561

30,676

30,695

27,963

31,488

HOSPITAL FURNITURE

10,634

7,513

7,989

7,793

8,528

1,607

1,505

1,453

3,175

3,078

Dental instruments Teeth & other fittings Artificial teeth Other dental fittings

ORTHOPAEDICS & PROSTHETICS

OTHER ARTIFICIAL BODY PARTS

Mechano-therapy apparatus

WHEELCHAIRS Wheelchairs, not mechanically propelled Wheelchairs, mechanically propelled

MEDICAL, SURGICAL STERILISERS

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Detailed Medical Device Exports By Product Area, 2008-2012 (US$000s) - Continued

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

OTHER INSTRUMENTS & APPLIANCES

TOTAL

2008

2009

2010

2011

2012

293

213

125

1,109

457

249,736

242,765

257,686

241,625

312,709

1,340,061 1,190,085 1,457,564 1,534,961 1,695,983

Source: BMI Espicom

Table: Detailed Medical Device Export Trends By Product Area

2012 % of Total

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

CONSUMABLES

3.5

17.1

16.7

4.0

-0.3

BANDAGES & DRESSINGS

0.4

-36.1

-36.3

-10.5

-14.3

Medical dressings (adhesive)

0.2

28.5

28.0

-6.2

-10.1

Medical dressings (nonadhesive)

0.3

-51.1

-51.3

-12.7

-16.3

SUTURING MATERIALS

0.2

-26.2

-26.4

-21.5

-24.8

SYRINGES, NEEDLES & CATHETERS

2.2

27.3

26.9

12.5

7.8

Syringes (with/without needles)

0.4

51.2

50.7

21.0

16.0

Tubular metal needles/ needles for sutures

0.9

119.6

118.8

10.4

5.8

Other needles, catheters, cannulae etc

0.9

-12.1

-12.4

11.6

6.9

OTHER CONSUMABLES

0.7

101.2

100.5

15.4

10.6

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Detailed Medical Device Export Trends By Product Area - Continued

2012 % of Total

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

Blood-grouping reagents

0.1

24.9

24.5

-4.6

-8.6

First-aid boxes & kits

0.1

60.3

59.7

14.8

10.0

Ostomy products

0.5

169.2

168.3

40.8

34.9

Surgical gloves

0.0

10.8

10.4

-10.7

-14.4

DIAGNOSTIC IMAGING

4.9

-17.5

-17.8

6.1

1.7

ELECTRODIAGNOSTIC APPARATUS

3.4

-27.7

-27.9

9.3

4.7

Electrocardiographs

0.1

-27.1

-27.3

-16.1

-19.6

Ultrasound

0.8

38.8

38.4

25.5

20.3

MRI

0.2

-22.4

-22.7

22.4

17.3

Scintigraphic apparatus

0.0

-48.2

-48.3

-19.8

-23.1

Other electrodiagnostic apparatus

2.2

-38.9

-39.1

7.2

2.7

RADIATION APPARATUS

0.4

59.0

58.5

5.5

1.1

CT scanners

0.0

-46.2

-46.4

-26.7

-29.7

Other medical x-ray apparatus

0.2

64.3

63.8

6.5

2.1

A, B, C ray apparatus

0.2

94.7

94.1

23.0

17.9

IMAGING PARTS & ACCESSORIES

1.2

9.2

8.9

-0.4

-4.6

Contrast media

0.0

-42.0

-42.2

-28.3

-31.3

Medical x-ray film (flat)

0.1

9.5

9.1

-2.3

-6.4

Medical x-ray film (rolled)

0.0

-6.9

-7.2

-0.7

-4.9

X-ray tubes

0.1

-7.2

-7.5

-4.5

-8.5

Other imaging parts & accessories

0.9

15.7

15.3

3.5

-0.9

DENTAL PRODUCTS

3.5

21.5

21.1

11.8

7.2

CAPITAL EQUIPMENT

0.1

-65.1

-65.2

-7.7

-11.5

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Detailed Medical Device Export Trends By Product Area - Continued

2012 % of Total

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

Dental drills

0.0

90.0

89.4

-20.3

-23.6

Dental chairs

0.1

-58.7

-58.8

-12.7

-16.3

Dental x-ray

0.0

-75.2

-75.3

22.6

17.5

INSTRUMENTS & SUPPLIES

3.4

30.7

30.2

12.9

8.2

Dental cements

2.1

32.7

32.3

14.9

10.1

Dental instruments

1.1

19.6

19.2

10.8

6.2

Teeth & other fittings

0.2

89.0

88.4

6.8

2.3

Artificial teeth

0.0

-67.7

-67.8

-10.9

-14.6

Other dental fittings

0.2

118.4

117.7

7.6

3.2

ORTHOPAEDICS & PROSTHETICS

5.1

-11.7

-12.0

19.5

14.6

FIXATION DEVICES

0.4

-37.2

-37.4

4.0

-0.3

ARTIFICIAL JOINTS

0.1

15.7

15.3

1.0

-3.2

OTHER ARTIFICIAL BODY PARTS

4.6

-9.0

-9.3

22.4

17.3

PATIENT AIDS

61.7

9.8

9.5

4.8

0.4

PORTABLE AIDS

32.1

21.8

21.4

10.4

5.8

Hearing aids

13.8

37.6

37.1

41.0

35.1

Pacemakers

0.1

43.2

42.7

5.5

1.1

Other portable aids

18.2

11.9

11.5

1.4

-2.9

THERAPEUTIC APPLIANCES

29.6

-0.7

-1.0

0.2

-3.9

0.2

16.0

15.7

-11.7

-15.4

Therapeutic respiration apparatus

29.4

-0.8

-1.1

0.4

-3.8

OTHERS

21.3

27.3

26.9

7.5

3.0

Mechano-therapy apparatus

© Espicom Business Intelligence

Page 98

Australia Medical Devices Report Q2 2014

Detailed Medical Device Export Trends By Product Area - Continued

2012 % of Total

Latest Year % Latest Year % Change Change, US$ (Local Currency)

5 Year % CAGR, US$

5 Year % CAGR (Local Currency)

WHEELCHAIRS

0.3

150.1

149.3

16.8

11.9

Wheelchairs, not mechanically propelled

0.0

-17.2

-17.5

7.2

2.7

Wheelchairs, mechanically propelled

0.2

250.3

249.2

18.7

13.7

OPHTHALMIC INSTRUMENTS

1.9

12.6

12.2

-0.8

-4.9

HOSPITAL FURNITURE

0.5

9.4

9.1

0.0

-4.2

MEDICAL, SURGICAL STERILISERS

0.2

-3.1

-3.4

7.3

2.8

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

0.0

-58.8

-58.9

31.1

25.6

18.4

29.4

29.0

8.8

4.2

100.0

10.5

10.1

6.1

1.7

OTHER INSTRUMENTS & APPLIANCES

TOTAL

Source: BMI Espicom

The leading destination for Australian exports is the USA, which accounted for 32.4% of the total in 2012, importing goods to the value of US$549.4mn. Strong export markets also included New Zealand and the United Kingdom, which took 14.4% and 12.6% of the total, respectively.

The USA is the leading market as a result of its imports of patient aids which can be traced back to ResMed. In 2012, exports of patient aids to the USA totalled US$460.8mn, equating to 44.0% of the category total.

Although, second to the US overall, New Zealand is the leading importer of consumables, diagnostic imaging products, dental products, orthopaedic & prosthetic products and other medical devices from Australia.

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Detailed Leading Medical Device Destinations By Product Area (US$000s)

USA

New Zealand

Japan

EU-27

3,942

21,972

1,756

1,128

3,568

11,075

BANDAGES & DRESSINGS

283

4,567

1,105

0

0

1,178

Medical dressings (adhesive)

52

2,187

12

0

0

57

231

2,380

1,093

0

0

1,121

0

0

0

0

0

0

3,481

13,366

221

1,123

3,556

9,206

170

3,613

0

986

130

1,300

2,850

936

0

4

1,077

5,727

Other needles, catheters, cannulae etc

461

8,817

221

133

2,349

2,179

OTHER CONSUMABLES

178

4,039

430

5

12

691

Blood-grouping reagents

6

112

0

0

0

21

First-aid boxes & kits

3

172

189

5

0

194

169

3,348

241

0

12

476

0

407

0

0

0

0

DIAGNOSTIC IMAGING

15,904

19,393

1,469

3,760

3,102

14,439

ELECTRODIAGNOSTIC APPARATUS

10,387

16,229

884

2,185

1,079

10,225

842

160

73

11

0

312

2,723

2,585

94

491

157

2,346

175

281

3

89

203

282

32

0

0

0

0

0

Other electrodiagnostic apparatus

6,615

13,203

714

1,594

719

7,285

RADIATION APPARATUS

1,553

818

34

48

14

1,094

74

2

0

6

0

6

CONSUMABLES

Medical dressings (non-adhesive)

SUTURING MATERIALS

SYRINGES, NEEDLES & CATHETERS Syringes (with/without needles) Tubular metal needles/needles for sutures

Ostomy products Surgical gloves

Electrocardiographs Ultrasound MRI Scintigraphic apparatus

CT scanners

© Espicom Business Intelligence

UK Netherlands

Page 100

Australia Medical Devices Report Q2 2014

Detailed Leading Medical Device Destinations By Product Area (US$000s) - Continued

USA

New Zealand

Japan

EU-27

Other medical x-ray apparatus

897

461

34

42

14

536

A, B, C ray apparatus

582

355

0

0

0

552

3,964

2,346

551

1,527

2,009

3,120

131

93

0

0

0

35

Medical x-ray film (flat)

0

1,235

0

0

0

30

Medical x-ray film (rolled)

0

9

0

0

0

0

823

181

49

0

453

82

Other imaging parts & accessories

3,010

828

502

1,527

1,556

2,973

DENTAL PRODUCTS

6,890

17,411

383

532

611

12,844

CAPITAL EQUIPMENT

152

903

262

0

4

388

0

12

0

0

4

0

152

560

262

0

0

262

0

331

0

0

0

126

INSTRUMENTS & SUPPLIES

6,738

16,508

121

532

607

12,456

Dental cements

5,604

3,070

0

482

154

8,463

Dental instruments

956

11,325

121

0

12

3,906

Teeth & other fittings

178

2,113

0

50

441

87

0

68

0

0

3

0

178

2,045

0

50

438

87

12,055

15,883

4,743

1,499

2,557

41,705

FIXATION DEVICES

2,579

2,654

436

0

0

1,068

ARTIFICIAL JOINTS

419

421

6

0

0

282

9,057

12,808

4,301

1,499

2,557

40,355

PATIENT AIDS

460,837

28,678

194,234

104,122

55,943

318,454

PORTABLE AIDS

180,620

22,177

193,883

2,119

13,147

204,154

IMAGING PARTS & ACCESSORIES Contrast media

X-ray tubes

Dental drills Dental chairs Dental x-ray

Artificial teeth Other dental fittings

ORTHOPAEDICS & PROSTHETICS

OTHER ARTIFICIAL BODY PARTS

© Espicom Business Intelligence

UK Netherlands

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Australia Medical Devices Report Q2 2014

Detailed Leading Medical Device Destinations By Product Area (US$000s) - Continued

USA

New Zealand

Japan

EU-27

Hearing aids

156,128

2,993

0

0

3,639

538

Pacemakers

1,264

748

5

0

0

192

23,228

18,436

193,878

2,119

9,508

203,424

280,217

6,501

351

102,003

42,796

114,300

196

3,166

110

0

16

290

280,021

3,335

241

102,003

42,780

114,010

49,734

140,659

10,486

4,378

27,836

68,900

2,215

665

244

0

19

1,304

0

233

69

0

0

74

Wheelchairs, mechanically propelled

2,215

432

175

0

19

1,230

OPHTHALMIC INSTRUMENTS

7,460

1,446

1,088

409

6,882

6,204

522

2,477

544

281

239

1,199

MEDICAL, SURGICAL STERILISERS

37

1,510

181

0

0

576

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

50

96

0

0

0

5

39,450

134,465

8,429

3,688

20,696

59,612

549,362

243,996

213,071

115,419

93,617

467,417

Other portable aids

THERAPEUTIC APPLIANCES Mechano-therapy apparatus Therapeutic respiration apparatus

OTHERS

WHEELCHAIRS Wheelchairs, not mechanically propelled

HOSPITAL FURNITURE

OTHER INSTRUMENTS & APPLIANCES

TOTAL

UK Netherlands

Source: BMI Espicom

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Australia Medical Devices Report Q2 2014

Table: Detailed Medical Device Balance Of Trade, 2008-2012 (US$000s)

2008

2009

2010

2011

2012

CONSUMABLES

-399,703

-418,410

-470,043

-587,526

-578,127

BANDAGES & DRESSINGS

-101,388

-101,204

-124,204

-175,328

-142,008

Medical dressings (adhesive)

-46,483

-44,153

-53,403

-68,343

-66,667

Medical dressings (non-adhesive)

-54,905

-57,051

-70,801

-106,985

-75,341

SUTURING MATERIALS

-53,456

-57,303

-57,175

-72,712

-89,570

-226,028

-227,328

-232,008

-271,414

-282,894

Syringes (with/without needles)

-31,594

-42,049

-42,374

-46,299

-43,917

Tubular metal needles/needles for sutures

-14,982

-24,572

-27,766

-26,933

-21,069

-179,452

-160,707

-161,868

-198,182

-217,908

OTHER CONSUMABLES

-18,831

-32,575

-56,656

-68,072

-63,655

Blood-grouping reagents

-3,544

-1,466

-3,077

-4,828

-3,225

First-aid boxes & kits

-1,901

-1,563

-2,164

-3,889

-5,796

97

-16,901

-32,203

-32,541

-31,952

-13,483

-12,645

-19,212

-26,814

-22,682

DIAGNOSTIC IMAGING

-415,815

-429,044

-482,563

-523,950

-626,748

ELECTRODIAGNOSTIC APPARATUS

-187,391

-196,180

-208,064

-223,230

-260,664

-8,261

-8,481

-12,049

-13,217

-13,384

Ultrasound

-66,876

-66,973

-75,606

-77,629

-72,533

MRI

-26,089

-43,998

-48,551

-51,360

-68,998

-1,983

-1,350

-3,176

-3,160

-3,885

-84,182

-75,378

-68,682

-77,864

-101,864

-112,572

-121,063

-139,443

-149,310

-211,202

CT scanners

-22,441

-31,802

-40,967

-63,667

-93,067

Other medical x-ray apparatus

-83,895

-90,282

-97,038

-83,975

-112,701

SYRINGES, NEEDLES & CATHETERS

Other needles, catheters, cannulae etc

Ostomy products Surgical gloves

Electrocardiographs

Scintigraphic apparatus Other electrodiagnostic apparatus

RADIATION APPARATUS

© Espicom Business Intelligence

Page 103

Australia Medical Devices Report Q2 2014

Detailed Medical Device Balance Of Trade, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

-6,236

1,021

-1,438

-1,668

-5,434

-115,852

-111,801

-135,056

-151,410

-154,882

Contrast media

-25,737

-24,434

-30,688

-31,217

-33,346

Medical x-ray film (flat)

-19,898

-20,956

-22,322

-23,880

-21,788

-90

68

-87

-7

-191

X-ray tubes

-13,410

-14,665

-16,121

-18,596

-21,985

Other imaging parts & accessories

-56,717

-51,814

-65,838

-77,710

-77,572

DENTAL PRODUCTS

-121,269

-139,317

-154,555

-167,009

-169,647

CAPITAL EQUIPMENT

-18,304

-23,890

-33,833

-23,399

-26,881

Dental drills

-1,563

-3,004

-3,429

-2,327

-1,960

Dental chairs

-7,438

-7,368

-11,325

-7,549

-8,046

Dental x-ray

-9,303

-13,518

-19,079

-13,523

-16,875

-102,965

-115,427

-120,722

-143,610

-142,766

-4,800

-8,271

-9,747

-20,688

-17,425

Dental instruments

-58,780

-66,159

-59,721

-68,580

-70,798

Teeth & other fittings

-39,385

-40,997

-51,254

-54,342

-54,543

-5,129

-5,410

-11,198

-12,206

-13,424

-34,256

-35,587

-40,056

-42,136

-41,119

ORTHOPAEDICS & PROSTHETICS

-478,093

-516,043

-583,956

-747,556

-743,813

FIXATION DEVICES

-134,630

-106,863

-127,385

-209,004

-194,524

ARTIFICIAL JOINTS

-168,646

-155,592

-192,688

-243,368

-278,313

OTHER ARTIFICIAL BODY PARTS

-174,817

-253,588

-263,883

-295,184

-270,976

PATIENT AIDS

259,473

227,238

304,303

239,597

354,651

PORTABLE AIDS

-75,171

-67,914

-17,637

-63,092

50,185

Hearing aids

-14,222

-7,541

75,219

73,576

147,918

A, B, C ray apparatus

IMAGING PARTS & ACCESSORIES

Medical x-ray film (rolled)

INSTRUMENTS & SUPPLIES Dental cements

Artificial teeth Other dental fittings

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Detailed Medical Device Balance Of Trade, 2008-2012 (US$000s) - Continued

2008

2009

2010

2011

2012

-118,774

-115,452

-129,141

-145,228

-175,101

57,825

55,079

36,285

8,560

77,368

THERAPEUTIC APPLIANCES

334,644

295,152

321,940

302,689

304,466

Mechano-therapy apparatus

-55,388

-49,057

-56,526

-65,861

-76,246

Therapeutic respiration apparatus

390,032

344,209

378,466

368,550

380,712

-663,877

-720,528

WHEELCHAIRS

-23,376

-21,738

-25,076

-28,526

-26,745

Wheelchairs, not mechanically propelled

-10,639

-9,274

-10,033

-12,137

-12,752

Wheelchairs, mechanically propelled

-12,737

-12,464

-15,043

-16,389

-13,993

OPHTHALMIC INSTRUMENTS

-24,425

-31,007

-33,478

-52,008

-59,003

HOSPITAL FURNITURE

-29,249

-26,466

-32,481

-40,926

-48,470

MEDICAL, SURGICAL STERILISERS

-14,444

-15,343

-16,926

-16,594

-18,768

-1,471

-1,296

-2,237

-1,119

-3,449

OTHER INSTRUMENTS & APPLIANCES

-570,912

-624,678

-729,751

-894,409

-907,510

Anaesthetic apparatus and instruments

-86,450

-91,379

-98,407

-96,152

-120,742

Pacemakers Other portable aids

OTHERS

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

TOTAL

-839,949 -1,033,582 -1,063,945

-1,819,284 -1,996,104 -2,226,763 -2,820,026 -2,827,629

Source: BMI Espicom

© Espicom Business Intelligence

Page 105

Australia Medical Devices Report Q2 2014

Monthly Medical Device Exports The latest Australian monthly trade data reveals that medical device exports showed a modest 1.7% increase to US$1,715.6mn in the 12 months to October 2013, when compared with the corresponding period to October 2012. The greatest movement occurred in the other medical devices segment, which increased by 17.2% to total US$406.2mn. The largest segment, patient aids, declined by 1.1% to US$1,025.5mn.

Medical device exports exhibited a slight improvement during the three months to October 2013, rising by 1.5% to US$476.9mn over the same quarter in 2012. Double digit growth was achieved in the diagnostic imaging and other medical devices segments, but exports decreased in all other areas. The largest segment, patient aids, fell by 0.1% to US$292.3mn. The heaviest fall was reported in the dental products segment which declined by 23.0% to US$14.4mn.

Table: Monthly Medical Device Exports By Product Area, September 2010-October 2013 (US$mn)

Consumables

Diagnostic

Dental

Orthopaedics

Patient Aids

Others

Total

Sep-10

4.4

9.1

3.7

7.0

76.5

26.0

126.8

Oct-10

5.8

8.7

4.2

7.1

86.7

29.1

141.5

Nov-10

5.0

8.8

3.9

7.4

84.6

27.9

137.6

Dec-10

4.2

7.3

5.6

7.8

95.1

31.4

151.4

Jan-11

4.6

4.9

2.8

4.7

59.1

19.5

95.7

Feb-11

4.5

8.4

3.3

9.8

75.9

21.3

123.1

Mar-11

4.2

10.1

4.7

9.2

91.2

28.7

148.1

Apr-11

4.2

9.8

4.3

9.2

84.0

25.8

137.4

May-11

4.0

11.5

7.2

9.0

86.8

24.3

142.9

Jun-11

4.4

9.3

5.1

9.8

86.6

26.9

142.1

Jul-11

5.2

9.6

4.3

9.3

91.1

29.2

148.9

Aug-11

4.6

9.0

4.1

10.1

101.8

27.0

156.6

Sep-11

4.7

9.4

4.3

8.5

105.8

34.4

167.2

Oct-11

5.1

9.3

4.4

8.2

88.7

23.7

139.4

Nov-11

5.1

10.3

4.3

11.3

87.7

24.6

143.3

Dec-11

5.1

11.3

6.6

9.8

83.5

27.5

143.7

Jan-12

4.1

6.1

3.7

5.1

61.9

18.5

99.5

Feb-12

5.6

8.0

5.1

6.1

86.4

27.9

139.1

Mar-12

6.5

7.9

4.8

8.0

83.6

30.4

141.2

Apr-12

3.9

5.3

4.6

5.0

76.4

28.1

123.2

© Espicom Business Intelligence

Page 106

Australia Medical Devices Report Q2 2014

Monthly Medical Device Exports By Product Area, September 2010-October 2013 (US$mn) - Continued

Consumables

Diagnostic

Dental

Orthopaedics

Patient Aids

Others

Total

May-12

5.3

5.6

3.8

7.0

89.4

31.0

142.2

Jun-12

4.0

11.2

4.2

5.7

89.7

28.3

143.1

Jul-12

5.3

6.3

5.4

6.8

85.4

33.2

142.5

Aug-12

5.5

6.4

5.5

7.6

94.6

29.6

149.3

Sep-12

5.2

7.0

6.8

9.2

107.6

30.0

165.8

Oct-12

4.7

7.2

6.4

8.4

90.3

37.6

154.7

Nov-12

4.4

6.4

3.9

9.3

95.7

33.4

153.2

Dec-12

4.5

6.0

4.7

8.2

86.0

32.8

142.2

Jan-13

4.0

3.8

3.2

5.4

48.2

27.9

92.5

Feb-13

4.4

4.9

4.2

6.4

69.5

33.4

122.8

Mar-13

4.9

5.8

5.0

8.6

84.6

38.5

147.4

Apr-13

4.6

7.4

4.1

9.8

88.9

32.8

147.7

May-13

4.8

6.8

5.4

8.6

76.9

33.1

135.7

Jun-13

5.1

6.2

4.2

8.4

97.4

34.6

155.9

Jul-13

4.7

5.8

5.2

8.0

85.9

31.8

141.4

Aug-13

5.3

8.4

5.0

8.3

108.0

35.8

171.0

Sep-13

3.8

7.5

4.7

7.2

81.3

34.7

139.2

Oct-13

5.1

7.8

4.7

8.6

103.0

37.4

166.7

Oct-12

15.4

20.7

18.7

25.3

292.5

97.2

469.9

Oct-13

14.3

23.8

14.4

24.2

292.3

107.9

476.9

Qtr % +/-

-7.4

14.9

-23.0

-4.3

-0.1

11.0

1.5

Oct-12

60.3

92.7

61.3

90.0

1,036.7

346.7

1,687.7

Oct-13

55.6

77.1

54.4

96.9

1,025.5

406.2

1,715.6

12 months % +/-

-7.7

-16.9

-11.4

7.7

-1.1

17.2

1.7

Quarter to

Year to

Source: BMI Espicom

© Espicom Business Intelligence

Page 107

Australia Medical Devices Report Q2 2014

Macroeconomic Forecasts BMI View: Several domestic and external factors have served to boost the level of economic activity in Australia. While we revised up our GDP growth forecasts for 2014 to 2.0% from 1.8% previously, this change masks our concerns for the ever-growing risks within the Australian economy. Given that an increasing proportion of capital is being invested in the housing sector despite the weak performance of business spending, (a turnaround in which is required to generate wage growth), this misallocation of capital increases the economy's vulnerability to external shocks, on top of the ongoing weakness in the mining sector.

Since the September elections, the Australia economy has recorded an uptick in activity levels and business sentiment from the lows recorded earlier in 2013, supported by both domestic and external factors. Domestically, prospects of lower regulatory burden, ranging from taxes to various regulatory procedures, have helped lift the outlook for certain industries, such as oil and gas. Moreover, September's readings of the performance indices showed that deterioration in the services and construction sectors were moderating, while activity in the manufacturing sector posted expansion in both September and October. The expansion recorded in the new order sub-indices for the manufacturing and construction sectors further suggests that this recent up-tick in activity could persist in the near term.

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Signs Of Life Australia - Performance Of Manufacturing, Services And Construction Sector Indices

Source: BMI; Australian Industry Group

Externally, efforts by the Chinese authorities to stimulate their economy and the decision of the US Federal Reserve to postpone any reduction to its ongoing unconventional monetary stimulus have helped lift key commodity prices and import volumes, such as iron ore, from their earlier lows in June. Together with domestic factors, these trends suggest that economic growth could hold up until Q214, and as such, we have raised our 2014 forecast, expecting real GDP growth to come in at 2.0% versus our previous estimates of 1.8%. This upgrade, however, masks our downbeat medium-term outlook for the economy as risks of a sharp deflationary shock to the Australian economy continue to grow larger.

© Espicom Business Intelligence

Page 109

Australia Medical Devices Report Q2 2014

Households Driving Debt Demand Australia - Total Private Sector Credit Growth (% chg y-o-y) & Growth Contribution From Components (pp)

Source: BMI; Reserve Bank of Australia

Ongoing Misallocation Of Capital Increases Risks As we have highlighted before, Australia's high level of external portfolio debt makes its currency very vulnerable to external shocks. With much of this debt extended to the financial sector, the risks that a repricing of the creditworthiness of banks or a similar liquidity squeeze as seen in 2008-09 could have a significant impact on the Australian economy. Moreover, via the banks, much of this liquidity has continued to flow into the housing sector, even as households owe roughly two-thirds of the total private sector debt in the country that currently towers at 140.4% of GDP. In comparison, businesses have reined in their use of credit despite the Reserve Bank of Australia's (RBA) easing its cash rate, cutting 50 basis points (bps) to bring the cash rate to 2.50% as of end-October.

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Divergent Performance Unlikely To Persist Australia - House Price Indices For Queensland, Sydney, Australia

Source: BMI; RP Data

Indeed, attribution analysis of the drivers of credit growth clearly shows the ongoing misallocation of capital within the Australia, where ever more liquidity is headed to the housing sector, driving up property prices. Although some observers have accredited the uneven house price growth in the different states to differing underlying supply and demand dynamics in each area, we believe that these factors are unlikely to hold up in the face of a weaker job market. We believe that demand for goods and services remain uncertain at best, and see room for input prices such as wages to head lower. Growth from the mining sector is likely to slow further as demand for resources tapers. As such, until businesses restart spending and hiring, we believe the current uptick in activity will be limited, and hence, we maintain that the current trajectory of house prices is built on shaky fundamentals and could correct should renewed worries of the economy come to the fore and/or the financial sector find itself in another funding squeeze.

Increasing Pressures For Greater Macro-Prudential Rules Given the disproportionate flows into the housing sector, we believe that there the RBA, in conjunction with the banking regulator, the Australian Prudential Regulatory Authority (APRA), will find it increasingly attractive to put in place macro-prudential rules and other limits to rein lending to the household sector. Indeed, as banks were announcing their quarterly earnings result at the end of October, the APRA warned the sector of handing out excessive dividends to shareholders, and further cautioned that it was looking at implementing a higher capital charge on domestic systematically important banks (DSIB).

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Private Consumption: The mining sector slowdown is expected to weigh on overall economic growth in the country, which is likely to affect wage growth as well. Given that many businesses have adopted the wait and see approach to hiring and spending, we believe that softness in the job market is likely to persist, and weigh on household consumption. As such, we maintain our outlook for private consumption growth to slow from 3.7% in 2012 to 1.5% and 1.3% in 2013 and 2014 respectively.

Private Investment: We have long implied a slow growth in investment as business credit has remained slow, despite the aggressive rate cuts by the central bank this year, and cost cuts within industries like the auto manufacturers suggest that investment could remain weak. The tapering off of iron ore and coal investments will similarly weigh on fixed capital investment growth. That said, we have upgraded our forecast 2014 slightly to better reflect the accelerating pace of construction for several gas terminals, expecting fixed-capital formation to grow at 2.0% in 2014 versus 1.2% previously.

Public Consumption And Investment: The new coalition government remains keen on pushing through its infrastructure and spending plans even though this is likely to raise the amount of public debt. While we maintain our outlook for the government expenditure on goods and services (not infrastructure) to growth by 2.0% in 2013 and 2014, we highlight that upside risks could increase in 2014 should the economy falter once again.

Net Exports: While the stimulus in China helped lift its domestic steel industry and, correspondingly, Australian iron ore exports from contractionary territory in the near term, we believe that the ongoing rebalancing within the Chinese economy will lead to a gradual decline in demand for certain Australian commodity exports. Moreover, ongoing construction of gas terminals in Australia is likely to put upward pressure on import growth over 2014-2017. As such, we believe that the country's trade balance will see a much more gradual improvement in 2014, and we forecast real export and import growth to rise to 4.5% and 2.7% respectively, compared to estimates of 2.3% and 1.4% in 2013.

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Australia - Economic Activity

2008

2009

2010

2011e

2012e

2013f

2014f

2015f

2016f

2017f

Nominal GDP, AUDbn 1,3

1,233.40 1,254.60 1,356.00 1,444.60 1,488.30 1,559.50 1,623.70 1,703.80 1,798.50 1,902.40

Nominal GDP, US$bn 1,3

1,031.30

Real GDP growth, % change y-o-y 2,3

979.9 1,244.80 1,491.10 1,541.30 1,535.60 1,420.70 1,363.00 1,375.80 1,426.80

2.8

1.1

2.9

2.2

3.7

2.4

2

2.5

2.8

3

48,120

44,870

56,895

66,785

68,351

67,434

61,782

58,702

58,686

60,267

Population, mn 4

21.6

22

22.4

22.7

23.1

23.3

23.6

23.9

24.2

24.5

Industrial production index, % y-o-y, ave 3

2.3

-0.1

3.9

-0.6

3.6

2.5

1.2

1.6

2.1

2

Unemployment, % of labour force, eop 3

4.6

5.5

4.9

5.2

5.4

6

6.6

6.1

5.7

5.5

GDP per capita, US$ 1,3

Notes: e BMI estimates. f BMI forecasts. 1 Calendar Years; 2 Calendar Years, Base Year = FY2008/09 (July-June). Sources: 3 ABS/BMI calculation; 4 World Bank/UN/BMI.

© Espicom Business Intelligence

Page 113

Australia Medical Devices Report Q2 2014

Industry Risk Reward Ratings Australia is the most attractive market in the Asia Pacific region for commercialising a medical device, according to BMI Espicom's Medical Device Risk/Reward Ratings (RRRs). The country's overall score for Q214 is 75.8 out of 100, which is marginally ahead of Japan (75.7).

REWARDS

Industry Rewards: The Australian market ranks amongst the largest in the world, with per capita spending on a par with several developed West European markets. Manufacturing tends to be focused on niche areas, so demand is largely met by imports. Australia's score of 69.8 out of 100 for this component of the RRRs is only surpassed by China (79.3) and South Korea (74.1) in the context of the Asia Pacific region).

Country Rewards: Although the new government is looking to cut public spending, the existing commitment to the National Health Reform Plan will see significant investment in the hospital sector up to 2019-2020. This, coupled with a rising population and an aging demographic, presents Australia as a potentially rewarding market. Australia's score of 79.0 out of 100 for Country Rewards is the fourth highest in the region, behind Japan (81.0), Hong Kong (80.5) and Singapore (80.0).

RISKS

Industry Risks: The incoming conservative Liberal-National coalition is intent on cutting public expenditure and this is currently the main threat to the country's medical device industry. Australia's score of 80.0 out of 100 is one of the highest in the Asia Pacific region, on a par with Singapore and Taiwan, but less than Japan (86.7) and New Zealand (83.3).

Country Risks: Australia's medical device market is vulnerable on two fronts: the installation of a government committed to cutting public spending and a weakening economy. Although one of the world's larger markets, growth is forecast to be negligible over the next five years. Australia's score of 83.7 out of 100 for Country Risks is the second highest in the Asia Pacific region, behind New Zealand (88.2).

© Espicom Business Intelligence

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Australia Medical Devices Report Q2 2014

Table: Asia Pacific Medical Device Risk/Reward Ratings, Q214

Industry Rewards

Country Rewards

REWARDS

Industry Risks

Country Risks

RISKS

MEDICAL DEVICE RISK/ REWARD RATING

Australia

69.8

79.0

72.8

80.0

83.7

81.5

75.8

Japan

67.7

81.0

72.0

86.7

76.5

82.6

75.7

South Korea

74.1

70.5

72.9

73.3

70.6

72.2

72.7

New Zealand

57.3

75.2

63.1

83.3

88.2

85.3

70.9

Singapore

57.7

80.0

64.9

80.0

80.5

80.2

70.3

Taiwan

65.5

66.7

65.8

80.0

64.3

73.7

68.6

China

79.3

53.8

71.1

60.0

59.6

59.8

67.1

Malaysia

67.5

58.6

64.6

70.0

70.8

70.3

66.6

Hong Kong

47.3

80.5

58.0

76.7

80.4

78.2

65.1

Thailand

62.7

43.8

56.6

66.7

63.6

65.5

59.7

India

63.6

41.0

56.3

50.0

50.8

50.3

54.2

Indonesia

55.0

48.6

52.9

50.0

46.2

48.5

51.4

Vietnam

52.5

42.4

49.2

40.0

47.4

43.0

47.0

Philippines

36.1

43.3

38.5

56.7

48.0

53.2

43.6

Pakistan

36.6

43.3

38.8

33.3

42.7

37.1

38.2

Bangladesh

25.2

37.1

29.1

33.3

36.9

34.8

31.1

Regional average

57.4

59.0

57.9

63.8

63.1

63.5

59.9

Source: BMI Espicom

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Market Overview Medical Device Market Overview Medical Market Analysis

Overview ■

Among top 15 largest medical markets in the world, behind only China, Japan and South Korea in the Asia-Pacific region

■

A strong steady economy with per capita GDP among top five highest worldwide

■

Health expenditure is strong, both as a percentage of GDP and in per capita terms

■

Much of spending is in the public sector; private spending equal to one third of the total

■

Domestic manufacturers tend to be small and focused on a few specialty areas

■

Therefore market is heavily reliant on imports, with the USA the major supplier

Australia represents a large and highly advanced medical device market. The country has a large number of medical device manufacturers, although these tend to be relatively small and concentrate on niche markets. Australia has a range of modern and sophisticated health facilities, and despite its geographical remoteness, represents a healthy market for imported medical equipment and supplies; over 90% of medical products are imported, principally from the USA. The position of the USA in the market was further strengthened with the free trade agreement approved in 2005.

Australia has a well-developed public hospital sector and a historically-strong private hospital sector. Issues of funding remain a key political concern but, in general, Australian hospitals are among the best in the Asia/Pacific region. These factors mean that the market should continue to be receptive to new technologies in the future.

The majority of public hospital purchasing is conducted along state lines, with purchasing procedures varying from state to state. In New South Wales and Queensland, purchasing is generally conducted centrally, while in other states, hospitals are allowed more freedom, purchasing medical equipment within a given budget.

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Table: Medical Device Market, Key Ratios

2013 Market size, US$mn

4,814.3

As % of total health expenditure

3.6

As % of GDP

0.3

As % of world market

1.5

Supplied by imports (%) Projected CAGR (%)

Per capita (US$)

95.6 0.1

207.4

Source: BMI Espicom

The Market In 2013

The Australian market for medical equipment and supplies was estimated at US$4,814.3mn in 2013, equal to US$193.3 per capita. Australia accounts for around 1.5% of the total world market.

The market is over 90% dependent on imports, although there is a highly skilled domestic industry which supplies many basic hospital requirements. Advanced technologies, however, are almost always imported. The MTAA (Medical Technology Association of Australia) has estimated that the public sector accounts for around 55% of the total market.

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Table: Medical Device Market By Product Area

2013 US$mn

2013

2013

As % of Total Per Capita (US$) Market

2013

2013

Local Currency Per Capita (mn) (Local Currency)

Consumables

646.8

13.4

27.9

647

27.9

Diagnostic Imaging

735.2

15.3

31.7

735.4

31.7

Dental products

247.1

5.1

10.6

247.2

10.6

Orthopaedics & prosthetics

864.7

18

37.2

865

37.3

Patient aids

792.1

16.5

34.1

792.4

34.1

Others

1,528.30

31.7

65.8

1,528.80

65.9

Total

4,814.30

100

207.4

4,815.70

207.5

Source: BMI Espicom

Medical Device Market By Product Area % Distribution

Source: BMI Espicom

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Healthcare Overview Health Status The Australian population has increased over the last decade to reach an estimated 23.3mn in 2013. The birth rate of 13.1 per 1,000 population is more than double the death rate.

In 2013, 14.3% of the population were aged 65 and over, a figure which is increasing steadily year on year. Life expectancy is amongst the highest in the world, at an estimated 80.0 years for males and 84.5 years for females in 2013.

The infant mortality rate fell by a CAGR of 2.8% between 2008 and 2013, reaching 3.6 per 1,000 live births in 2013.

Healthcare System Organisation

The Australian healthcare system is complex, operating at three levels; Commonwealth (national) level, State/Territory level and local government level.

Commonwealth Level

The Commonwealth government is responsible for the overall co-ordination of the public health sector, principally through the Medicare system. It provides the funding for an estimated 67% of all health spending, through grants to States and Territories, for the running of public hospitals. Funding is also provided for specific programmes, such as mental health, aerial medical, aboriginal health and blood transfusion services. The Pharmaceutical Benefits Scheme is also run at Commonwealth level.

State/Territory & Local Governments

The main responsibility for the running of healthcare services rests with the State and Territory governments, either directly or via local authorities or semi-governmental bodies. Included within their remit are: ■

Management and supervision of public hospitals and nursing homes,

■

Community care, of children, the elderly and the mentally ill,

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■

Dental health,

■

Health and safety in the workplace.

The federal nature of the system allows regional flexibility, but makes the co-ordination of any national policy or reform difficult. A major example is the failure at local level to implement Aboriginal health programmes. There are also concerns over cost-shifting from one sector to another.

National Policies

In August 2011, after months of negotiation, the Commonwealth Government signed an agreement with all States and Territories to formalise the National Health Reform plan. Designed to improve funding to hospitals and to reduce patient waiting times, the plan will see the Commonwealth Government invest at least A$16.4bn (US$16.0bn) in additional funding for public hospitals over the period 2014-15 to 2019-20. The Commonwealth Government will match 45% of efficient growth funding from July 2014, and 50% of efficient growth from July 2017.

As part of the reform, a new Independent Hospital Pricing Authority will set the "national efficient price" for public hospital services and will develop a national activity based funding system.

A single National Health Funding Pool will be established to improve the transparency of public hospital funding. The administrator of the Pool will report on Commonwealth, State and Territory funding flowing through the pool and the services delivered by this funding. This will ensure that all hospitals are funded under the same arrangements, allowing all Australians to clearly see how their taxes are being spent.

Local Hospital Networks are being established by State and Territory governments, and will ensure decisions about hospital management are devolved to the local level. In addition, local clinicians will be engaged to advise about patient pathways which best meet the needs of the local community.

The National Health Performance Authority will deliver further transparency on the performance of health and hospital services, by developing and publishing Hospital Performance Reports and Healthy Communities Reports. These reports will help to identify high-performing organisations, and will highlight on areas for further development and investment in the future.

The Commonwealth Government will also invest A$1.8bn to establish new targets for emergency departments and elective surgery, with funding dedicated to help states and Territories reach these targets

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and reward them when they do. An additional investment of A$1.6bn is being provided to fully fund the capital and recurrent costs of 1,316 new sub-acute beds or equivalent services.

The targets to be implemented are: a four-hour target for emergency departments with the aim that 90% of patients across all age categories are seen, treated, admitted or discharged within four hours; and a 100% elective surgery target aimed at ensuring all patients waiting for elective surgery are treated within clinically recommended times. The emergency department target will be implemented over four years from 2012, and the elective surgery target will be implemented over five years from 2012.

Healthcare Funding

Social Security

Medicare

Medicare was introduced in 1984, and is the principal source of funding for hospital treatment. It is a special health fund administered by the Commonwealth government. The scheme sets out a schedule (the Medicare Benefits Schedule) which lists fees for different medical services. This schedule is under constant review and is updated twice yearly. Inpatients in public hospitals can receive Medicare benefits at 85% of the relevant Schedule fee. For low income groups, benefits are paid at 100%. Private patients choosing treatment in public hospitals receive benefits at 75%. Medicare was originally funded by a 1% levy on taxable income, but this amount has been raised several times since.

Health Expenditure

In 2013, Espicom estimates Australian healthcare expenditure at US$138.1bn, equal to US$5,917 per capita. Australia has long had a relatively high level of health spending and in 2013 it stood at 9.1% of GDP, having grown at a CAGR of 0.6% over the 2008-2013 period. Spending in US$ per capita terms has doubled since 2003.

Almost one third of spending is private, which is funded through a combination of private insurance and out-of-pocket payments.

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Healthcare Resources Infrastructure

Australia had 1,363 hospitals in 2013, which were fairly evenly split between the public sector (753) and the private sector (610). The number of beds totalled 88,163 in 2013, equal to 3.8 beds per thousand population. This bed-to-population ratio is above the average for the Asia Pacific region, although significantly lower than the rates in prevalent in Japan, New Zealand and South Korea for example.

Medical Device Technology

In 2012, Australia made some notable investments in medical technology, more than doubling the number of MRI units installed and increasing the number of CT scanners by 16% and the number of PET scanners by 31%.

In 2012, there were 341 MRI units in operation, equating to 15.0 per mn population. This rate stands at one of the world's highest, ahead of the USA and most West European nations. The increase in the number of CT scanners in 2012 cemented Australia's position as having the second highest concentration in the world at 50.6 per mn, behind Japan.

The addition of 10 PET scanners in 2012 took Australia's installed base to 42, a rate of 1.9 per million which is similar to Australia and Ireland, but well below the USA, Switzerland and South Korea.

While the number of most types of imaging equipment has been increasing, the number of mammography units has fallen in each year since 2009. In 2012, there were 517 mammography units in Australia, a rate of 22.8 per mn population, a rate that compares well with most European countries.

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Table: Diagnostic Imaging Technology By Type, 2006-2012

2006

2007

2008

2009

2010

2011

2012

CAGR

MRI units

100

108

120

124

125

127

341

22.69%

Gamma cameras

n/a

n/a

419

441

455

452

456

2.14%

PET scanners

n/a

n/a

15

24

31

32

42

29.36%

1160

n/a

n/a

849

949

990

1,148

-0.17%

DSA units

n/a

n/a

311

324

355

362

376

4.86%

Mammographs

506

508

500

534

533

520

517

0.36%

Radiation therapy equipment

127

n/a

168

193

205

205

221

9.67%

DIAGNOSTIC IMAGING

ELECTRODIAGNOSTIC APPARATUS

RADIATION APPARATUS

CT scanners

Source: BMI Espicom using OECD data

Table: Diagnostic Imaging Technology Per Million Population By Type, 2006-2012

2006

2007

2008

2009

2010

2011

2012

MRI units

4.8

5.1

5.6

5.7

5.7

5.7

15.0

Gamma cameras

n/a

n/a

19.6

20.3

20.6

20.3

20.1

PET scanners

n/a

n/a

0.7

1.1

1.4

1.4

1.9

DIAGNOSTIC IMAGING

ELECTRODIAGNOSTIC APPARATUS

RADIATION APPARATUS

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Diagnostic Imaging Technology Per Million Population By Type, 2006-2012 - Continued

2006

2007

2008

2009

2010

2011

2012

56.0

n/a

n/a

39.0

43.0

44.4

50.6

n/a

n/a

14.5

14.9

16.1

16.2

16.6

24.5

24.2

23.4

24.5

24.2

23.3

22.8

6.1

n/a

7.9

8.7

9.3

9.2

9.7

CT scanners DSA units Mammographs Radiation therapy equipment

Source: BMI Espicom using OECD data

Healthcare Activity Inpatient admissions have grown at a CAGR of 2.9% since 2008, reaching almost 4.0mn in 2013, equal to 169.9 admissions per thousand population, which is one of the highest rates in Asia, though well behind Thailand, Hong Kong, South Korea and New Zealand. The number of surgical procedures has grown at a slightly higher CAGR of 3.3%, reaching an estimated 2.5mn in 2013.

Australia's total of 54.8mn outpatient visits in 2013 equates to 2,348 per thousand population, which is below the average for the Asia-Pacific region.

Healthcare Personnel The number of physicians in Australia is estimated to exceed 79,000, equal to a rate of 3.4 per thousand population in 2013. This is the highest rate in the Asia Pacific region.

The situation is the same for nurses, with Australia's rate of 12.6 per thousand population in 2013 being the highest in the Asia Pacific region, as well as being as one of the highest in the world, just behind Germany.

Key Data Table: Key Data, 2008-2013

Economic Data

GDP (US$ bn) Real growth (%) Per capita (US$)

© Espicom Business Intelligence

2008

2009

2010

2011

2012

2013 CAGR

1,031.3

980.0

1,244.8

1,491.1

1,541.3

1,509.6

7.9

2.8

1.1

2.9

2.2

3.7

2.4

n/a

48,121.2 44,871.6 56,895.2 66,786.2 66,073.9 62,054.6

5.2

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Key Data, 2008-2013 - Continued

Economic Data

2008

2009

2010

2011

2012

2013 CAGR

Health Expenditure (US$ bn)

91.8

91.3

116.2

134.3

140.5

138.1

8.5

4,240.4

4,141.9

5,187.3

5,907.6

6,096.9

5,917.1

6.9

Health expenditure % of GDP

8.9

9.3

9.3

9.0

9.1

9.1

0.6

Public % of health expenditure

67.9

68.5

68.5

68.5

68.1

67.8

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Private % of health expenditure

32.1

31.5

31.5

31.5

31.9

32.2

n/a

Out of pocket % of private

56.4

59.0

59.4

63.0

n/a

n/a

n/a

Private insurance % of private

25.1

24.9

24.9

24.9

n/a

n/a

n/a

1.2

1.3

1.1

1.0

1.0

1.0

-2.9

Population Data

2008

2009

2010

2011

2012

2013 CAGR

Population (mn)

21.6

22.0

22.4

22.7

23.1

23.3

1.5

1.9

1.8

1.7

1.5

1.4

1.3

n/a

% of population aged 65+

13.1

13.3

13.4

13.7

14.0

14.3

1.7

Demographic Data

2008

2009

2010

2011

2012

2013 CAGR

Live Births (000s)

296.6

295.7

297.9

301.6

303.3

305.0

0.6

Per 000 population

13.7

13.4

13.3

13.3

13.2

13.1

-0.9

143.9

140.8

143.5

146.9

148.8

150.6

0.9

Per 000 population

6.7

6.4

6.4

6.5

6.5

6.5

-0.6

Infant mortality/000 live births

4.1

4.3

4.1

3.8

3.7

3.6

-2.8

Male life expectancy at birth

79.2

79.3

79.5

79.7

79.9

80.0

0.2

Female life expectancy at birth

83.7

83.9

84.0

84.2

84.3

84.5

0.2

Healthcare Data

2008

2009

2010

2011

2012

2013 CAGR

Per capita (US$)

Social security % of public

Exchange rate, national currency per US$

Population growth (%)

Deaths (000s)

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Key Data, 2008-2013 - Continued

Economic Data

2008

2009

2010

2011

2012

2013 CAGR

Hospitals

1,314

1,320

1,334

1,345

1,354

1,363

0.7

Public

762

756

753

752

753

753

-0.2

Private

552

564

581

593

601

610

2.0

83,396

83,702

84,648

86,123

87,205

88,163

1.1

3.9

3.8

3.8

3.8

3.8

3.8

-0.4

3,445.2

3,503.9

3,613.4

3,732.1

3,877.3

3,965.4

2.9

159.2

159.0

161.3

164.1

168.2

169.9

1.3

6.2

6.0

5.9

5.8

5.8

5.7

-1.5

2,151.7

2,221.4

2,304.9

2,358.8

2,443.9

2,525.3

3.3

49,986.5 50,681.0 51,548.0 52,379.0 53,574.5 54,800.5

1.9

Beds Per 000 population

Inpatient admissions (000s) Per 000 population Average length of stay (days) Surgical procedures (hosp.-000s)

Outpatient visits (hosp.-000s) Per 000 population

2,309.4

2,299.8

2,300.8

2,303.3

2,324.2

2,347.7

0.3

Physicians (employed)

68,689

72,739

74,342

75,980

77,654

79,366

2.9

3.2

3.3

3.3

3.3

3.4

3.4

1.4

272,741

276,751

280,820

284,949

289,138

293,389

1.5

12.6

12.6

12.5

12.5

12.5

12.6

-0.1

10,923

11,192

11,467

11,750

12,039

12,336

2.5

0.5

0.5

0.5

0.5

0.5

0.5

0.9

16,041

16,332

16,604

16,853

17,083

17,299

1.5

0.7

0.7

0.7

0.7

0.7

0.7

0.0

Per 000 population

Nurses (employed) Per 000 population

Dentists Per 000 population

Pharmacists Per 000 population

Source: BMI Espicom

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Industry Trends & Developments Industry Trends & Developments Imports Grow By Just Over 1% In Last Quarter

The latest Australian monthly trade data reveals that medical device imports grew by 1.2% to US $1,188.4mn over the three months to October 2013, compared with the corresponding period in 2012. Growth was achieved in the patient aids and orthopaedics & prosthetics sectors which increased by 15.1% and 4.1% respectively. All other sectors experienced a drop in imports over the quarter. The sharpest decline was in the demand for diagnostic imaging products which fell by 7.9%, followed by dental products which decreased by 6.9%.

Medical device imports increased by 2.2% in US dollar terms in the 12 months to October 2013, taking the running annual total to US$4,571.6mn. The highest growth was recorded in the patient aids sector, which increased by 9.0% over the 12 month period to US$749.0mn. Imports of orthopaedics & prosthetics and consumables also increased - by 6.1% and 3.3% respectively. The largest market segment, other medical devices, showed a marginal 0.5% increase to US$1,407.4mn.

Limited Growth In Exports Over Last Quarter

The latest Australian monthly trade data reveals that medical device exports exhibited a slight improvement during the three months to October 2013, rising by 1.5% to US$476.9mn over the same quarter in 2012. Double digit growth was achieved in the diagnostic imaging and other medical devices segments, but exports decreased in all other areas. The largest segment, patient aids, fell by 0.1% to US$292.3mn. The heaviest fall was reported in the dental products segment which declined by 23.0% to US$14.4mn.

Medical device exports showed a modest 1.7% increase to US$1,715.6mn in the 12 months to October 2013, when compared with the corresponding period to October 2012. The greatest movement occurred in the other medical devices segment, which increased by 17.2% to total US$406.2mn. The largest segment, patient aids, declined by 1.1% to US$1,025.5mn.

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Medical Device Market Growth Set For Sluggish Growth

The Australian market for medical equipment and supplies is estimated at US$4,814.3mn in 2013, equal to US$193.3 per capita. After a phase of strong growth since 2008, a CAGR for 2013-2018 of 0.1% is projected to edge the market to US$4,836.5mn by 2018, equal to US$196 per capita. Australia is expected to be amongst the top 20 largest medical device markets in the world by 2018.

Government Allocates A$559mn For Medical Research

In October 2013, the Prime Minister, Tony Abbott, announced funding of A$559.1mn to Australian health and medical researchers to generate new health discoveries across Australia.

The new funding will support 963 grants across three National Health and Medical Research Council (NHMRC) research support schemes and five fellowship schemes. The importance of tackling national health priorities to researchers is reflected in the funding support to research in these areas. As an example, A$21.7mn has been committed to dementia research, while A$31.8mn continues the NHMRC's commitment to research to improve Aboriginal and Torres Strait Islander health.

Victoria will receive the highest amount of funding, with A$236.4mn allocated for 414 grants. The University of Melbourne is the research institution receiving the greatest amount of funding, with A $80.1mn earmarked for 145 grants.

NSW Medical Devices Fund Announces Grants

In July 2013, the New South Wales Minister for Health and Minister for Medical Research presented grants totalling over A$10.3mn to five organisations in the inaugural round of the NSW Government's Medical Devices Fund.

The five grant recipients were chosen from a shortlist of 13, which was drawn from 147 applications. The five recipients are: ■

Elastagen: for pioneering elastatherapy (using human protein elastin to naturally repair the skin, particularly for severe burns).

■

Endoluminal: for developing a breakthrough technology for the treatment of failing heart valves.

■

HearWorks: for HearLab, the world's first fully-automated test for hearing. It attaches to a laptop and can be used in any clinic to conduct complex electrophysiology for the assessment of hearing.

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■

MobiLife: for MobiDRIP, an innovative, portable intravenous (IV) pump to allow patients to be treated at home.

■

Saluda Medical: for developing world-first technology for an implantable device, which supplies constant pain relief to people suffering chronic neuropathic pain.

The New South Wales Medical Devices Fund has been established to help encourage and support investment in the development and commercialisation of medical devices and related technologies in New South Wales.

Central Government Budget Reveals Increased Investment The Australian Government announced its 2013-2014 budget on 14th May 2013 which confirmed its ongoing commitment to investment in healthcare. Funding for public hospitals is set to reach record levels, with a budget of A$14.9bn (US$14.9bn), an increase of A$871mn over the previous year.

Cancer care received a boost with an extra A$226.4mn to be provided over four years under its World Cancer Care Package. Within this figure, A$55.7mn will go towards an expanded BreastScreen Australia programme, A$18.5mn will be spent on a new Prostate Cancer Research Institute and A$29.6mn over two years will go to help with the dispensing of chemotherapy medicines.

Australia, Brazil, Canada And The USA Plan Shared Medical Device Audit Programme

The medical device regulatory agencies of Australia, Brazil, Canada and the US have signed a statement of co-operation to develop a single audit programme for medical devices.

The US Food and Drug Administration (FDA), Australian Therapeutic Foods Administration (TGA), ANVISA of Brazil and Health Canada plan to make their respective quality management system auditing processes more efficient and less burdensome by establishing the Medical Device Single Audit Program (MDSAP). Upon implementation of the MDSAP programme, the audit of a medical device manufacturer's quality system in any one of the four participating countries will meet the regulatory requirements of each of the four countries

Among the MSDAP's stated objectives are promoting work-sharing arrangements and mutual acceptance among participating regulators to allow more efficient and flexible use of resources among the FDA, Health Canada, ANVISA and TGA regarding medical device quality system audits; standardising participants' market oversight practices regarding third-party auditing entities; and leveraging existing conformity assessment structures when appropriate.

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New Royal Adelaide Hospital

Heralded as the future centrepiece of South Australia's A$2.2bn (US$2.3bn) Health Care Plan 2007-2016, the construction of the new Royal Adelaide Hospital started in September 2011 with completion scheduled in 2016. The new hospital is expected to receive more than 80,000 patient admissions per year. It will have a capacity of 800 beds (700 multi-day beds and 100 same-day beds). All overnight stay beds will be singleroom. Specialty care services at the proposed hospital will include trauma, renal transplantation, major burns and spinal injury care, in addition to an ambulatory care centre, operating theatre suite and all necessary clinical and non-clinical support services.

New Perth Children's Hospital

Work started in January 2012 on the construction of a new children's hospital in Perth which will replace the original Princess Margaret Hospital for Children (PMHM), at a total cost of A$1.2bn (US$1.3bn). Facilities will include a bed capacity of 274 beds and one of Western Australia's only paediatric trauma centres. The hospital will also offer double the number of surgical theatres, with inpatient and outpatient care, as well as ambulatory services. Construction is due to be completed in 2015.

Sydney Teaching Hospital Redevelopment

The Royal North Shore Hospital, one of Sydney's leading teaching hospitals, has been undergoing a A $1.1bn (US$1.1bn) redevelopment programme. Under the programme, a range of outdated buildings on the site are being transformed into new purpose-built facilities. The new developments include 18 new operating theatres and a 58-bed intensive care unit.

The redevelopment scheme will finish with the completion of a new A$153mn (US$153mn) Clinical Services Building, scheduled to open in late 2014, which will contain a new burns unit, women's and children's health and mental health units.

Other developments under the programme have included a new Acute Services Building which was opened to patients in December 2012.

Sydney Children's Hospital Wing Opened

A new A$27.8mn (US$27.8mn) clinical services wing was opened at Sydney Children's Hospital in July 2013. The new five-level Ainsworth Building contains:

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■

A 28-bed short-stay surgical unit;

■

An eight-bed purpose-built child and adolescent mental health unit;

■

A comprehensive rehabilitation centre;

■

A world-class respiratory laboratory, which includes the only infant lung function laboratory in Sydney.

■

Ronald McDonald House Charities Family Centre for parents and carers;

■

A child protection unit;

■

New clinical office space for health care professionals from a range of disciplines.

The NSW Government contributed almost A$12.3mn (US$12.3mn) to construct the new wing. The Sydney Children's Hospital Foundation pledged A$15mn (US$15mn), with A$500,000 (US$500,000) from the Motor Accidents Authority for the rehabilitation centre.

Sydney Children's Hospital cares for more than 39,000 children each year. It provides comprehensive a range of services in paediatric and adolescent medicine and surgery, treating children with conditions including cancer, trauma, HIV/AIDS, congenital abnormalities, disabilities, heart disease and respiratory disorders.

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Regulatory Development Medical Device Regulations Competent Authority Medical products are regulated in Australia by the Therapeutic Goods Administration (TGA). The TGA is part of the Department of Health & Ageing. Medical devices are the responsibility of the Office of Devices, Blood and Tissues (ODBT), within the TGA.

Regulations Australia introduced a new set of medical device regulations in October 2002. The system used prior to this dated to the Therapeutic Goods Act, 1989, and differed markedly from the international norm. It did not divide devices into Classes, but instead divided all devices into one of two categories; Registerable or Listable. Registerable devices were deemed to be high-risk. They only comprised around 5% of all devices on the market. All devices had to be placed on the Australian Therapeutic Goods Register (ARTG), but only Registerable devices generally had to undergo a detailed product evaluation.

Reform of the 1989 Therapeutic Goods Act was first proposed in 1996 report by the Australian Industry Commission. The report highlighted the following problems:

The existing legislation was poor at dealing with technological change, since it dealt with devices product to product, according to specified groupings. This was considered a major shortcoming in such a rapidly evolving industry.

Many low risk products were unnecessarily included within the TGA's remit due to the nature of the legislation. Such goods are already covered adequately under the Trade Practices Act.

Certain standards were mandated by the current legislation, but a range of standards offering different routes to compliance was not. This was inflexible and increased industry costs.

The detailed requirements for devices in Australia 'differ markedly from those of its major trading partners', making trade more costly and onerous than it needed to be.

Conformance assessment of medical devices was not open for any form of competition; there was therefore little pressure on the TGA to improve both the speed and cost-effectiveness of the review process.

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The government approved the new regulatory system in 1999. It is very much based on the EU MDDs, following the 1998 mutual recognition agreement. For the first time, a Class I, II, III risk based system will be introduced. Originally the new system was due to be operating in September 2000. However, it was delayed by a year, and came into effect on 4th October 2002. Since October 2002, all new devices have been regulated under the new system. Products already on the register were given until October 2007 to move to the new system.

Many devices classified 'exempt' from inclusion in the ARTG (such as non-powered hospital furniture & simple non-powered surgical instruments) are now classified in Class I, while some devices classified as 'listable' under the current system (such as thermometers & dressings) are also Class I devices. Other 'listable' devices (such as hearing aids & dental filling materials) become Class IIa devices. Higher-risk devices, including some classified 'listable' and most of those classified 'registerable' under the current system are now registered as Class IIb and III devices.

Changes introduced under the new system include: ■

Minimum requirements for exempt Class I devices. These may require inclusion on the ARTG, unlike prior to October 2002.

■

A more comprehensive pre-market assessment of new technologies, high-risk active devices and implantables. The 1989 system required only registerable devices to undergo extensive testing. The new system introduces some form of conformity assessment for all medical device classes. TGA testing may well be required in the case of the highest-risk products, but in practice the new regulations allow for EUapproved Notified Bodies to be used when submitting evidence of conformity assessment.

■

An extension of quality systems requirements to more devices.

■

A greater reliance on international standards, such as EN 46000 or ISO 13485/88. Similarly to the USA system, compliance with these standards will be mandatory.

■

Better reporting by sponsors of device-related problems. A mandatory adverse event reporting system for all device classes ('Vigilance System') will be introduced. Adverse events must be reported by the manufacturer within 10 days, and within 30 days for a near adverse event. These are defined as under the EU directives.

The introduction of a tracking system for high risk implantables, for which there was previously no provision. Manufacturers will be responsible for tracking devices such as active implantable cardiac devices, prosthetic heart valves, intravascular stents, annuloplasty rings, silicone gel prostheses, hip/knee prostheses, and implantable devices of biological origin.

The TGA keeps a number of detailed guidance documents relating to the new regulations on its web site, at:

http://www.tga.gov.au/devices/devices.htm

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Australia New Zealand Therapeutic Products Authority Overview

In December 2003, the Australian and New Zealand governments signed a treaty to form a single therapeutic agency for the regulation of therapeutic products, including medical devices, OTC, prescription and complementary medicines. This was to be named the Australia New Zealand Therapeutic Products Authority (ANZTPA).

The bi-national agency was to replace the Australian Therapeutic Goods Administration (TGA) and the New Zealand Medicines and Medical Devices Safety Authority (Medsafe). While the basic principles were easy to establish, the details of the proposed merger have proved complex, leading to more than one slip on the legislative timetable. Progress appeared to be made, however, with legislation being presented in New Zealand in December 2006, and in Australia in April 2007.

In June 2011, the Prime Ministers of Australia and New Zealand reaffirmed their commitment to the establishment of the Australia New Zealand Therapeutic Products Agency (ANZTPA) to administer a joint regulatory scheme for therapeutic products. This reaffirmation acknowledged that the New Zealand Government will introduce a separate scheme to regulate certain natural health products in the New Zealand market.

The Prime Ministers have agreed that a three stage approach over a period of up to five years will be adopted to progressively achieve this goal by mid-2016. The three stages involve the two countries' regulators, the TGA and Medsafe.

In December 2013, the TGA and Medsafe announced they completed a series of joint projects that promises to deliver improved access to information about therapeutic products in both countries, as well as enhanced cooperation between the regulators ahead of the proposed Australia New Zealand Therapeutic Products Agency (ANZTPA).

The TGA and Medsafe have now commenced a further programme of harmonisation work that will be undertaken over the next two and a half years, which includes 14 activities across six regulatory areas. This new phase of joint work will progressively increase aspects of regulatory alignment between TGA and Medsafe that will facilitate business planning and align aspects of regulatory practice for the transition to ANZTPA. It will involve consultation with stakeholders as these activities are progressed.

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For medical devices, the targets would be: ■

The publication of guidance on the requirements for the submission and assessment of manufacturers' evidence on the TGA, Medsafe and ANZTPA websites, by December 2014.

■

To identify the extent of product overlap in the Australian & New Zealand markets for medical devices in Class III and Active Implantable Medical Devices and the impacts for transition, by February 2015.

Early Warning System For Product Safety Issues

In June 2013, the TGA and Medsafe developed an early warning system to communicate potential safety concerns with therapeutic products. This scheme will operate in parallel in Australia and New Zealand.

The TGA and Medsafe will apply the agreed communication process independently to potential safety concerns identified with therapeutic products through their existing therapeutic product vigilance processes. These communications will be country specific and may differ reflecting different legislative requirements, and different availability and/or usage of certain therapeutic products between Australia and New Zealand.

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Competitive Landscape Domestic Medical Device Production Australia has a large number of small manufacturers, mostly making hospital consumables and supplies.. Production is generally high quality, but low tech; advanced products are almost always imported. The majority of production is consumed locally, although there are some exceptions; Cochlear and Resmed for example, export most of their output.

According to the MTAA (Medical Technology Association of Australia), the Australian industry includes over 500 medical technology companies with products listed on the Australian Register of Therapeutic Goods (ARTG). It employs around 19,000 people with turnover of around A$10.8bn in 2010-11, although this includes distribution activity.

MTAA

The Medical Technology Association of Australia (MTAA, formerly the Medical Industry Association of Australia, MIAA) is the country's leading medical device industry association. It was formed 25 years ago, as the Australian Medical Device and Diagnostics Association, taking its current name in March 2008. It has over 80 members, comprising local companies and multinational subsidiaries. Many do not manufacture locally, but concentrate on importing and distribution. The MTAA claims that its members account for over 90% of the value of non-pharmaceutical healthcare products distributed in Australia.

National Medical Device Manufacturers Advanced Surgical Design & Manufacture

Advanced Surgical Design & Manufacture (ASDM) manufactures a range of orthopaedic and spinal implants, as well as undertaking contract manufacturing of medical devices. The company reported an 18% increase in revenues to A$8.7mn (US$9.1mn) in fiscal 2012 (year ended June 2012). ASDM is based in St. Leonards, New South Wales.

In August 2013, ASDM announced the execution of a 12 month Transitional Services Agreement (TSA) with Orthofix Australia. Under the TSA, ASDM will provide distribution services as Orthofix Australia develops a direct sales force. As a result of the new arrangements, the existing spinal business held by ASDM has been acquired by Orthofix Australia.

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Ansell

Ansell is a global manufacturer of protection wear including gloves and personal protection products such as condoms. Ansell's healthcare activities include the manufacture of examination gloves, surgical gloves and a range of surgical room safety devices. Ansell's Medical business unit achieved revenues of A $349.5mn (US$315.5mn) in fiscal 2013, a decrease of 1.9% on the 2012 figure. This represented 25.5% of group revenues. During fiscal 2013, Ansell continued to exit from the natural rubber latex (NRL) examination gloves sector. Synthetic surgical gloves sales volume rose by 16%, while surgical safety products grew by 11% in volume terms.

Ansell has been active in acquiring companies as part of an evident expansion programme.

In December 2012 it acquired companies in the US and Brazil: ■

Hércules Equipamentos de Protecao, a privately held Brazilian company located in São Paulo, with annual sales of approximately US$30mn. Hércules is a leading manufacturer of Personal Protective Equipment (PPE) in Brazil with approximately 350 employees. It has a plant located outside São Paulo and wide distribution network across Brazil.

■

Preferred Surgical Products, a privately held US product and technology company producing infection prevention products. The PSP range aims to improve infection control, protect the patient's skin and optimise room turnover time, while reducing total cost per procedure.

In September 2012, Ansell announced the settlement of its purchase of Comasec and its subsidiaries for EUR 101.5mn. Comasec is a privately owned French group with annual sales of around EUR 100mn, manufacturing operations in Portugal and Malaysia and over 1,200 employees globally. It is a leading player in the European Personal Protective Equipment (PPE) Glove Market, has a presence in North America and specialises in gloves for chemical protection, food handling, cut protection, mechanical protection, dry box and thermal protection. Major brands are Comasec, Marigold, and Marigold Industrial.

In May 2012, Ansell concluded the acquisition of Trelleborg's Protective Products (TPP) business for EUR 23.7mn. Ansell will operate the former Trelleborg business under the name Ansell Protective Solutions (APS), and as part of its Specialty Markets Global Business Unit.

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Cochlear

Based in Lane Cove, New South Wales, Cochlear manufacturers cochlear implants. The company has manufacturing/R&D facilities in Australia and Belgium. The company's latest product is the Nucleus Freedom, launched in major markets in 2005. The company has around 1,655 employees.

The Nucleus Freedom cochlear implant system features both an internal component and an external speech processor. The Nucleus Freedom is designed to mimic functions of the human ear. The implant features the Contour Advance electrode, a self-curling electrode array that allows the electrodes to be placed close to the hearing nerve for targeted stimulation and increased power efficiency, while applying minimal pressure on the cochlear structures. According to Cochlear, the Contour Advance is the only electrode array designed to protect cochlear structures during surgery.

In July 2009, Cochlear began construction of a new A$128mn Global Headquarters and manufacturing and research facility on the Macquarie University Campus, North Ryde, Sydney. The first part was completed in October 2010. It forms part of a world-first hearing research, treatment and development precinct which will link over 2,000 professionals involved in the hearing industry across academia, government as well as rehabilitation and research.

In March 2005, Cochlear acquired Entific Medical systems for A$195.3mn. This represented the company's first major acquisition. Entific is a Swedish developer of the Baha system, an implant which allows hearing through bone conduction. In May 2006, Cochlear signed a major A$270mn six year contract to supply implants to children in Taiwan and China. The company anticipates that the majority of sales will take place towards the end of the contract term.

For fiscal year 2013 (ended June 2013), Cochlear reported sales of A$752.7mn (US$679.5mn), a reduction of 3.4% from the A$779.0mn recorded in 2012. After the sharp fall in net profit from A$180.1mn in 2011 to A$56.8mn in 2012, Cochlear was able to report a 133% rise to A$132.6mn in fiscal 2013. The company achieved record cochlear implant unit sales of 26,674 in 2013, a rise of 16%.

Sales in the Americas amounted to A$284.4mn, a fall of 4% compared with 2012. Sales in EMEA (Europe, Middle East and Africa) also fell, by 1% to A$283.0mn. For the second consecutive year, the Asia-Pacific region bucked the negative trend, with revenues rising by 20% to reach A$147.6mn. This result was supported by a Chinese tender sale of approximately 2,800 units.

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Dynamic Hearing

Dynamic Hearing is based in Richmond, Victoria. It is a spin-off company from the Cooperative Research Centre (CRC) for Cochlear Implant and Hearing Aid Innovation, a body linked to the University of Melbourne. Dynamic Hearing has developed the ADRO software system for digital hearing aids, which aims to improve sound output quality. Companies using the technology include Intertron (Germany) and Gennum (Canada). In August 2006, Dynamic Hearing announced a new product in the US, the Freedom AD, in collaboration with America Hears.

In October 2005, Dynamic Hearing signed an exclusive multi-year licence agreement with the US-based House Ear Institute (HEI) to develop and commercialise its patented feedback cancellation technology for use in hearing aids and auditory implants.

Dynamic Hearing was acquired by Wolfson Microelectronics of the UK in 2011.

Elastagen

Elastagen is a Sydney based pioneer in technologies to repair and augment skin using Elastin, a naturally occurring protein that is responsible for the skin's elasticity and supple properties. In July 2013, Elastagen received funding from the New South Wales Medical Devices Fund for its pioneering elastatherapy (using human protein elastin to naturally repair the skin, particularly for severe burns).

Endoluminal

In July 2013, Endoluminal received funding from the New South Wales Medical Devices Fund for developing a breakthrough technology for the treatment of failing heart valves. Endoluminal was established in 2007 and is based in Eveleigh, NSW.

HearWorks

HEARworks Pty Ltd. manages the intellectual property and commercial activity of the HEARing Cooperative Research Centre (CRC), an international consortium of research, clinical and industry organisations, constituting five core and 21 support members. The CRC was funded in 2007 through Australia's Commonwealth Government Cooperative Research Centre programme. The HEARing CRC is investing AU$115mn over seven years into hearing healthcare research and utilisation.

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In July 2013, HearWorks received funding from the New South Wales Medical Devices Fund for its development of the world's first fully-automated test for hearing. It attaches to a laptop and can be used in any clinic to conduct complex electrophysiology for the assessment of hearing.

mobiLIFE

Based in the Hunter Valley, NSW, Australia, mobiLIFE was started in 2002 as a joint venture to take ideas and concepts from the University of Newcastle into the medical device industry. The company draws upon a 50+ strong team of design and engineering project staff - based in Sydney, Chicago and in China (with associated manufacturing facilities).

In July 2013, mobiLIFE received funding from the New South Wales Medical Devices Fund for MobiDRIP, its innovative, portable intravenous (IV) pump to allow patients to be treated at home.

Saluda Medical

Saluda Medical has developed a versatile implant that both stimulates and senses nerve responses. The Implanted Neural Sensing & Stimulation product (INS2) is the platform for neurostimulation therapies. The initial target market for this product is Spinal Cord Stimulation (SCS) for the control of chronic back and lower limb pain. The implant is designed to nestle alongside the dorsal processes of the spine.

In July 2013, Saluda Medical received A$5mn in funding from the New South Wales Medical Devices Fund for developing world-first technology for an implantable device, which supplies constant pain relief to people suffering chronic neuropathic pain.

Multinational Medical Device Manufacturers Multinational Manufacturers

Baxter

Baxter manufactures renal and medication delivery products at its facility in Toongabbie, New South Wales.

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CareFusion

CareFusion manufactures critical care technology products at its facility in Seven Hills, New South Wales.

Danaher

Danaher's Invetech subsidiary undertakes contract manufacturing of diagnostic instruments and medical devices at its facility in Mt. Waverley, Victoria.

Fresenius

Fresenius has a 5,350 square-metre manufacturing plant and warehouse for haemodialysis concentrate in Smithfield, New South Wales. FMS Australia Pty Ltd. had 364 employees at the end of 2012 and achieved revenues of €143.2mn.

Paul Hartmann

Hartmann acquired Unomedical's custom procedure packs business in 2010 and continues to manufacture these products at the former Unomedical facility in Mona Vale, New South Wales.

ResMed

ResMed is a respiratory medical device manufacturer, specialising in products for the diagnosis and treatment of sleep disordered breathing (SDB). The company was formed in 1989, primarily to commercialise a device for treating obstructive sleep apnoea (OSA), a major subset of SDB. Developed in 1981 by Professor Colin Sullivan and colleagues at the University of Sydney, nasal continuous positive airway pressure (CPAP) provided the first successful non-invasive treatment of OSA.

Resmed has its headquarters in the USA, although the company's production base is in Australia. Manufacturing is also undertaken in Singapore and the USA. In 2011, the company employed around 3,450 people worldwide.

In 2004, the company moved to a new manufacturing site in Australia. The new ResMed campus, set on 30 acres of land to the north-west of Sydney, is a purpose-built site, designed to meet long term manufacturing needs. It triples the size of the company's production area. The campus is being built in two stages, with

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stage one housing production and stage two housing administration. Stage one was completed in April 2004 and was immediately set up for production. New research and development and office facilities were completed in May 2006.

In May 2005, ResMed acquired Saime, a developer and distributor of ventilation products in France and Germany. The transaction was valued at around 86mn euros. Saime has annual revenues of around 28mn euros. ResMed and Saime have had a relationship since 1996, when ResMed bought its original French sleep therapy distribution assets from Saime.

ResMed sales in fiscal 2013 (year ended 30th June 2013) amounted to US$1.5bn, a rise of 11% over 2011. Net income in fiscal 2013 was US$307.1mn, an increase of 21%.

In August 2012, ResMed announced that it had acquired a data services technology provider, Umbian, which is headquartered in Halifax, Canada. Umbian offers a comprehensive patient compliance management solution called U-Sleep, which monitors continuous positive airway pressure (CPAP) devices and provides a suite of interactive follow-up services for healthcare providers.

Multinational Market Activity The top ten leading multinational companies all have at least a local representative office in Australia in charge of marketing, distribution and service for their respective products. In terms of manufacturing, only Fresenius has activities in Australia.

Table: Multinational Market Activity, 2014

Company

Operations

Baxter International

Baxter's Australian operations commenced in 1963 and now comprise a manufacturing plant in Western Sydney; distribution and warehousing depots in New South Wales, Queensland, Victoria, South Australia, Western Australia and Tasmania; and aseptic compounding facilities in New South Wales, Queensland, Victoria, South Australia and Western Australia.

B.Braun

B.Braun Australia Pty, based in Bella Vista, NSW, is a fully-owned subsidiary with 124 employees. In 2012, the company achieved sales of €64.6mn.

Boston Scientific

Boston Scientific has no manufacturing plant in the country. There is a representative office serving both Australia and New Zealand, Boston Scientific ANZ, in New South Wales.

Covidien

Covidien Australia Pty Ltd is the country head office based in Sydney, New South Wales. The company does not manufacture medical devices locally.

Fresenius

Fresenius has a 5,350 square-metre manufacturing plant and warehouse for haemodialysis concentrate in Smithfield, New South Wales. The head office is based

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Multinational Market Activity, 2014 - Continued

Company

Operations in Sydney. The company's 71.6%-owned subsidiary, FMS Australia Pty Ltd., had 364 employees at the end of 2012 and achieved revenues of €143.2mn.

General Electric

GE Healthcare, which comes under GE Technology Infrastructure in Australia and New Zealand, has representative offices in Melbourne, Sydney, Perth and Brisbane.

Johnson & Johnson

J&J has a local presence in Australia through Johnson & Johnson Medical Pty. Ltd. and Synthes Australia. Synthes Australia employs 140 staff and has its head office in Sydney.

Medtronic

The company's Australasian headquarters is located in North Ryde, Sydney, New South Wales. There are other offices in Melbourne, Brisbane, Adelaide, Perth and Auckland (New Zealand). There is no manufacturing activity.

Philips

Philips Healthcare has an office in North Ryde, New South Wales, which serves both Australia and New Zealand. There is no local manufacturing.

Siemens

The company has several subsidiaries in Australia; from a medical devices perspective it has two companies, Siemens Healthcare Diagnostics Ltd and Siemens Hearing Instruments Pty. Ltd, in Bayswater, Australia. There is no local manufacturing.

Smith & Nephew

The company does not have a manufacturing facility for medical devices in Australia but has representative offices in New South Wales, Queensland, Victoria, South Australia and Western Australia.

Stryker

The company has a representative office, Stryker South Pacific, in St Leonards, New South Wales. There is no manufacturing activity.

Source: BMI Espicom

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Methodology Medical Device Market Methodology

The medical device market reports use a wide definition of medical equipment, similar to that used by the US FDA or EU EMA. In short, it is defined as any piece of equipment or apparatus used to treat or diagnose an illness that comes into direct contact with the patient. Pharmaceuticals, IV diagnostics and laboratory equipment are not within the scope of these reports.

BMI Espicom has estimated national medical device markets at ex-factory prices for the 2008-2012 period in current US dollar and local terms. The markets have been estimated using a trade-based approach, looking at imports, and then adding in domestic production, minus any exports. Import and export data have been sourced from national customs authorities, as compiled by the International Trade Centre.

BMI Espicom has estimated production data as including range of factors such as the value of exports, the known presence of local and multinational manufacturers, sales data when available, and officially published estimates of production, again when available. Production data have been adjusted to take into account re-exporting, stockpiling and differences in the definition of domestic production.

BMI Espicom has forecast national medical device markets at ex-factory prices for the 2014-2018 period. BMI Espicom has derived market estimates in US dollar terms for the base year, which is 2013 for the purposes of these reports. Compound Annual Growth Rates (CAGRs) in local terms have been calculated for each product area, major category and sub-category for the 2014-2018 period. These CAGRs have been applied to the market in local currency terms, and then converted back to US dollar terms, using average exchange rate projections.

BMI Espicom has calculated CAGRs by looking at a number of factors. These include macro-economic performance; health expenditure levels; medical device import trends; domestic medical device manufacturing size; provision of medical personnel, infrastructure and services; national healthcare development plans; and international aid projects, when applicable.

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Trade Code Classifications International trade is universally classified according to the Harmonised System (HS). This began to be used in the 1990s, and is overseen by the World Customs Organisation. Medical equipment is generally well-defined in the HS. There is one major code, HS9018, named Medical Equipment, but there are a number of other codes for products with a specifically medical use. These are listed in detail the following table. For the majority of countries, it is not possible to provide a more detailed breakdown than this.

Table: Used HS Trade Codes, 2014

Code

Product

'300510

Medical dressings (adhesive)

'300590

Medical dressings (non-adhesive)

'300610

SUTURING MATERIALS

'300620

Blood-grouping reagents

'300630

Contrast media

'300640

Dental cements

'300650

First-aid boxes & kits

'300691

Ostomy products

'370110

Medical x-ray film (flat)

'370210

Medical x-ray film (rolled)

'401511

Surgical gloves

'841920

MEDICAL, SURGICAL STERILISERS

'871310

Wheelchairs, not mechanically propelled

'871390

Wheelchairs, mechanically propelled

'901811

Electrocardiographs

'901812

Ultrasound

'901813

MRI

'901814

Scintigraphic apparatus

'901819

Other electrodiagnostic apparatus

'901820

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

'901831

Syringes (with/without needles)

'901832

Tubular metal needles/needles for sutures

'901839

Other needles, catheters, cannulae etc

'901841

Dental drills

'901849

Dental instruments

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Used HS Trade Codes, 2014 - Continued

Code

Product

'901850

OPHTHALMIC INSTRUMENTS

'901890

OTHER INSTRUMENTS & APPLIANCES

'901910

Mechano-therapy apparatus

'901920

Therapeutic respiration apparatus

'902110

Orthopaedic or fracture appliances

'902121

Artificial teeth

'902129

Other dental fittings

'902131

Artificial joints for orthopaedic purposes

'902139

Artificial parts of the body (excl. artificial teeth and dental fittings)

'902140

Hearing aids

'902150

Pacemakers

'902190

Other portable aids

'902212

CT scanners

'902213

Dental x-ray

'902214

Other medical x-ray apparatus

'902221

A, B, C ray apparatus

'902230

X-ray tubes

'902290

Other imaging parts & accessories

'940210

Dental chairs

'940290

HOSPITAL FURNITURE

BMI Espicom has rearranged the data from its original code order, to create six major product areas: CONSUMABLES, DIAGNOSTIC IMAGING, DENTAL PRODUCTS, ORTHOPAEDICS & PROSTHETICS, PATIENT AIDS AND OTHER MEDICAL PRODUCTS. These have been sub-divided into categories and sub-categories. BMI Espicom has used them to present the medical device market, import and export data in these reports. Their relation to the trade codes is shown on the following table.

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Table: Rearranged HS Trade Codes, 2014

Code

Product

CONSUMABLES

BANDAGES & DRESSINGS '300510

Medical dressings (adhesive)

'300590

Medical dressings (non-adhesive)

'300610

SUTURING MATERIALS

SYRINGES, NEEDLES & CATHETERS '901831

Syringes (with/without needles)

'901832

Tubular metal needles/needles for sutures

'901839

Other needles, catheters, cannulae etc

OTHER CONSUMABLES '300620

Blood-grouping reagents

'300650

First-aid boxes & kits

'300691

Ostomy products

'401511

Surgical gloves

DIAGNOSTIC IMAGING

ELECTRODIAGNOSTIC APPARATUS '901811

Electrocardiographs

'901812

Ultrasound

'901813

MRI

'901814

Scintigraphic apparatus

'901819

Other electrodiagnostic apparatus

RADIATION APPARATUS '902212

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CT scanners

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Rearranged HS Trade Codes, 2014 - Continued

Code

Product

'902214

Other medical x-ray apparatus

'902221

A, B, C ray apparatus

IMAGING PARTS & ACCESSORIES '300630

Contrast media

'370110

Medical x-ray film (flat)

'370210

Medical x-ray film (rolled)

'902230

X-ray tubes

'902290

Other imaging parts & accessories

DENTAL PRODUCTS

CAPITAL EQUIPMENT '901841

Dental drills

'940210

Dental chairs

'902213

Dental x-ray

INSTRUMENTS & SUPPLIES '300640

Dental cements

'901849

Dental instruments Teeth & other fittings

'902121

Artificial teeth

'902129

Other dental fittings

ORTHOPAEDICS & PROSTHETICS

'902110

FIXATION DEVICES

'902131

ARTIFICIAL JOINTS

'902139

OTHER ARTIFICIAL BODY PARTS

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Rearranged HS Trade Codes, 2014 - Continued

Code

Product PATIENT AIDS

PORTABLE AIDS '902140

Hearing aids

'902150

Pacemakers

'902190

Other portable aids

THERAPEUTIC APPLIANCES '901910

Mechano-therapy apparatus

'901920

Therapeutic respiration apparatus

OTHERS

WHEELCHAIRS '871310

Wheelchairs, not mechanically propelled

'871390

Wheelchairs, mechanically propelled

'901850

OPHTHALMIC INSTRUMENTS

'940290

HOSPITAL FURNITURE

'841920

MEDICAL, SURGICAL STERILISERS

'901820

ULTRA-VIOLET OR INFRA-RED RAY APPARATUS

'901890

OTHER INSTRUMENTS & APPLIANCES

10 digit

Blood pressure monitors

10 digit

Endoscopy apparatus

10 digit

Dialysis apparatus

10 digit

Transfusion apparatus

10 digit

Anaesthetic apparatus and instruments

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Rearranged HS Trade Codes, 2014 - Continued

Code

Product TOTAL

Source: International Trade Centre

Risk/Reward Ratings Methodology BMI Espicom's Risk/Reward Ratings (RRR) provide a comparative regional ranking system evaluating the ease of doing business and the industry-specific opportunities and limitations for potential investors in a given medical device market. The RRR system is divided into two distinct categories:

1.Rewards: Evaluation of the medical device industry's size and growth potential in each country, and also broader industry/country characteristics that may encourage its development. This is further broken down into two sub-categories: ■

Industry Rewards (this is an industry specific sub-category taking into account the current industry size, per capita expenditure, growth forecasts, import reliance and import growth to provide an overall score for potential returns for companies operating in the medical device industry)

■

Country Rewards (this is a country specific sub-category whose score factors in demographic indicators such as urbanisation and population age and growth conditioning the medical device industry)

2.Risks: Evaluation of industry-specific dangers and those emanating from the country's political/economic profile that call into question the likelihood of anticipated returns being realised over the assessed time period. This is further broken down into two sub-categories: ■

Industry Risks (this is an industry specific sub-category whose score covers potential operational risks to medical device companies operating in the healthcare sector, regulatory issues inhibiting the industry, and the relative maturity of a market in terms of pricing & reimbursement)

■

Country Risks (this is a country specific sub-category in which political and economic stability, legislation and the overall business environment are evaluated to provide an overall score)

A medical device market's RRR score is made up of a sum of the Rewards score (Industry Rewards + Country Rewards) and the Risks score (Industry Risks + Country Risks), which provides a globally comparative and numerically-based assessment of a market's attractiveness and highlights the rewards and risks a company will face in a particular country.

For each category and sub-category, each medical device market is scored out of 100 (100 being the best), with the overall RRR score being a weighted average. Importantly, as many countries are considered by

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BMI Espicom to be 'emerging markets', our rating is revised on a regular basis. This ensures that the rating draws on the latest information and data across our broad range of sources, and the expertise of our analysts.

BMI Espicom's approach in assessing the risk/reward balance for medical device companies looking to launch a product within a market is fourfold: ■

Firstly, we identify current industry/country trends and forecast industry/country growth that represent opportunities to companies looking to launch a medical device.

■

Secondly, we identify industry-specific and country traits that pose or could pose operational risks to companies looking to launch a medical device.

■

Thirdly, we attempt, where possible, to identify objective indicators that may serve as proxies for issues/ trends to avoid subjectivity.

■

Finally, we use BMI's proprietary Country Risk Ratings (CRR) in a nuanced manner to ensure that only the aspects most relevant to the medical device industry are incorporated. Overall, the system offers an industry-leading, comparative insight into the opportunities and risks for companies across the globe.

Table: Medical Devices Risk/Reward Ratings Indicators, 2014

Indicator

Rationale

REWARDS

~

65

Industry Rewards

~

44

Sales, US$mn

Denotes breadth of the medical device market. Larger markets score higher than smaller ones

20

Sales Per Capita, US$

Denotes depth of the medical device market. High value markets score higher than low value ones

8

% Forecasted CAGR

Denotes the anticipated performance of the medical device market over the 2013-2018 period. Markets with higher CAGRs score better than those with lower CAGRs

7

% Import Reliance

Denotes import reliance of the medical device market. Highly reliant markets score higher than lowly reliant markets

3

% Y-T-D Import Growth

Denotes year-to-date medical device import growth. Markets with fastgrowing imports score higher than those with slow-growing imports

6

Country Rewards

~

% Urban/Rural Split

Evaluates urbanisation as a proxy for development of medical facilities. Predominantly urban countries score higher than rural countries

8

% Aged 65+ Population

Evaluates proportion of the population over 65 years of age as an expenditure ratio. Countries with ageing populations tend to have higher per capita medical device expenditure and score higher

8

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Medical Devices Risk/Reward Ratings Indicators, 2014 - Continued

Indicator

Rationale

Weighting

% Population Growth

Evaluates long-term prospects associated to population growth. Fastgrowing countries suggest better long-term growth across the medical device industry and score higher

RISKS

~

35

Industry Risks

~

21

Healthcare Access

Evaluates health policies, health insurance coverage, health expenditure and access to health resources, activity and personnel. Markets with a good healthcare access score higher

7

Regulation

Evaluates the strength of the competent authority, national regulations and regulations aligned regionally, if existing. Markets with a strong regulation score higher

7

Government Spending/P&R

Evaluates the level of government spending on medical devices and the attractiveness of P&R policies. Markets with good government spending and friendly P&R policies score higher

7

Country Risks

~

Economic Diligence

CRR evaluates the structural balance of the economy, noting issues such as reliance on single sectors for exports/growth, and past economic volatility. Countries with a strong economy score higher

3

Policy Continuity

CRR evaluates the risk of a sharp change in the broad direction of government policy. Stable political countries score higher

3

Lack Of Bureaucracy

CRR evaluates ease of conducting business in the country. Less bureaucratic countries score higher

3

Legal Diligence

CRR evaluates the strength of legal institutions in the country. Security of investment can be a key risk in some emerging markets. Countries with strong legal institutions score higher

3

Business Transparency

CRR evaluates the risk of additional illegal costs/possibility of opacity in tendering/business operations affecting companies' ability to compete. Countries with business transparency score higher

2

5

14

Source: BMI Espicom

Sources Historical and forecast macro-economic, political, demographic and healthcare data, where indicated, are sourced from: ■

Business Monitor International (BMI).

The medical device market reports have been analysed using, where possible, primary qualitative and quantitative data from local sources. These include:

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■

multinational medical device companies,

■

national medical device companies,

■

national medical device trade associations,

■

national ministries (or departments) of health, and

■

national statistical institutes.

The medical device market reports may also make reference to a number of secondary sources, such as those listed below: ■

Eurostat, http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

■

Inter-American Development Bank (IDB), http://www.iadb.org

■

International Trade Centre (ITC), http://www.intracen.org

■

Organisation for Economic Co-operation and Development (OECD), http://www.oecd.org

■

United Nations (UN), http://www.un.org

■

World Bank (WB), http://www.worldbank.org

■

World Customs Organisation (WCO), http://www.wcoomd.org

■

World Health Organisation (WHO), http://www.who.org

■

World Trade Organisation (WTO), http://www.wto.org

Contact

BMI Espicom welcomes feedback on all the medical device market reports. If you have any further questions, comments or suggestions about the contents of this report, please send them to:

Jamie Davies

Head of Medical Device Market Analysis

[email protected]

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