The medical devices market in the US is estimated to be worth a staggering $82.6bn, with the global market for such devices predicted to grow by some 6.2% over the next five years. Part of this growth is, as we shall see, demographic, driven by an ageing population, rising expectations of health and quality of life and specific health factors such as obesity.
But it is also being fuelled by innovation, entrepreneurship and research and development, areas where the US east coast, and in particular the states of Florida and Massachusetts, is very much at the cutting edge. Both states are hugely different geographically and culturally, in their climate and outlook, but both are making huge strides in the development of new medical device technologies, innovations that could in time profoundly change the way medicine and medical interventions are conducted.
MEDICINE IN MASSACHUSETTS
Massachusetts' medical and healthcare heritage goes way back – it was, after all, at Massachusetts General Hospital that the first public operation under ether was performed back in 1846.
Today, key growth areas when it comes to medical devices include cardiovascular devices, orthopaedics and women's health issues, as within America's ageing population, women tend to be outliving men, according to Thomas Sommer, president of the Boston-based Massachusetts Medical Device Industry Council.
Minimally invasive products, devices for keyhole surgery and devices that can be used around naturally occurring entry points, or NOEPS as they are known, are also growing in importance. These are being used for procedures such as natural orifice translumenal endoscopic surgery, a procedure only recently performed on a patient in the UK for the first time but already becoming more common in the US. "These will be devices that are inserted through natural openings, leading to less trauma and therefore a reduction in the hospital stay," explains Sommer.
The ageing population and the health issues it brings are a country-wide problem, and as much a factor behind the growth of the industry in Massachusetts as elsewhere in the US, he adds. "The Baby Boomer generation is beginning to set its sights on retirement and with that age demographic there come a range of health issues."
Another key challenge is obesity, both in terms of devices related to tackling obesity directly, such as stomach reduction devices, and devices to help deal with health issues related to obesity, such as Type II Diabetes. "There are a number of companies in Massachusetts, for example, that are chasing the Holy Grail of diabetes, the development of non-invasive glucose monitors," says Sommer. "But there are also areas such as insulin pumps, with companies such as Insulet, based in Bedford in the state."
Geographically, given the fact that Massachusetts is a relatively small, densely populated state – as Sommer points out, "everything is within a two to three-hour drive" – much of the industry is located around and on the outskirts of Boston, with areas such as Worcester, Andover and Braintree all particularly strong for medical device development clusters.
"There is a lot of medical research and innovation in the state – we have for example 14 teaching hospitals within the Boston area alone and 60% of all federal funding that goes into teaching hospitals comes here," Sommer adds. There are also a number of dedicated research institutes and world-renowned universities located within the state, including the Massachusetts Institute of Technology, the Worcester Polytechnic Institute and, of course, Harvard, which is split between Cambridge and Boston.
"We have a very highly educated population and plenty of capital investment comes into the state," he explains. "There are more than 250 medical device companies located here, employing more than 21,000 people and turning over between them some $5bn." In all, medical devices account for around 10% of the state's exports and the sector is its number one commodity export, with Asia and Western Europe key (and growing) markets.
Future growth areas, Sommer predicts, will include combination products, which require devices that can deliver drugs in certain, specific combinations, with companies such as Boston Scientific pioneering the development of drug-eluting stent platforms, which can slowly release drugs into diseased arteries (normally coronary arteries) to block cell proliferation. "A lot of companies are looking at other types of drug delivery, so I think we will definitely see that as one of the next big things," says Sommer.
Such combination technology could in time even become a unique selling point for the state. "This is a natural location for combination product development," he emphasises.
THE SUNSHINE STATE
Moving down the coast, Florida is ranked second in the US for medical device establishments, with more than 400 FDA-registered device companies located within the state, says Sena Black, senior vice-president, marketing and strategic intelligence at Enterprise Florida, a public-private partnership that promotes the state and its economic potential.
Key growth areas include devices for minimally invasive surgery, diagnostic imaging, sterilisation equipment and orthopaedic and cardiac implants.
Geographically, the industry is centred around a number of areas, including the "high-tech corridor" encompassing the central area of the state, from Gainesville through Orlando and Tampa Bay, as well as Miami in the south and Jacksonville in the north east. "Florida offers a good quality of life but there are good business reasons too for medical device firms to locate here, particularly the fact that traditionally there has been a strong healthcare sector here, with a large and diverse population," says Black. The state also attracts "medical tourists".
There are many medical and academic centres of excellence located in the state, including University of Florida, which runs a nationally recognised bio-business incubator, Florida State University, University of Miami, the University of South Florida, Florida Atlantic University and the University of Central Florida, which also runs a pioneering technology incubator. In fact there are 11 public and 29 independent colleges and universities in the state, between them spending $814m (2006) on basic and applied life sciences research and experimentation.
"Florida has in recent years accelerated its innovation base; there is a lot of dynamic research and development as well as a convergence between traditional medical device areas and bio and life sciences, which is enabling Florida really to grow and accelerate opportunities," explains Black.
Key growth areas for the future will include more cardiovascular devices, more molecular diagnostic and IV diagnostic devices. Ophthalmology is another area likely to remain strong, with the state being home to the Bascom Palmer Eye Institute in Miami, the country's top-ranked eye hospital. "Florida has strengths in minimally invasive surgery, such as hip resurfacing implants, artificial spinal discs and so on," Black explains. "Devices for the management and treatment of vascular diseases are another area."
Key innovators include Ft. Lauderdale-based MAKO Surgical Corp, which has developed an advanced robotic arm solution and implants for minimally invasive orthopaedic knee procedures. Similarly, Xhale Diagnostics in Gainesville is a pioneer in breath-based healthcare devices, while the Advanced Biosensors Laboratory at the University of South Florida is developing next-generation detector technologies.
Its research is in particular looking at feasibility of using portable biosensors rapidly to detect microbial pathogens and biological toxins in food, water and the environment, as well as in humans. Meanwhile, Discovery Technology International in Sarasota is leading the way in the design, manufacture and distribution of motorised nano-robotic and nano-positioning systems.
Life sciences is an area becoming more important as time goes on, argues Black, citing the recent not-for-profit research venture M2GEN created in the state by Merck & Co and the Tampa-based H Lee Moffitt Cancer Center & Research Institute to develop new cancer treatments.
"The whole nano/bio arena is growing, as is the development of personalised medicine," she explains. "So we are very much looking at new ways of delivering drugs."
Within the life sciences arena, there are key clusters of innovation and excellence that are either located or have a presence within the state, she adds. These include the Scripps Research Institute at Florida, the Burnham Institute for Medical Research, which opened a 300-person operation in Orlando, the Torrey Pines Institute for Molecular Studies, which is researching heart disease, cancer and Alzheimer's at its Port St Lucie facility and the newly announced Max Planck Institute of Bio-imaging, to be located in Jupiter.
There are also many biotech incubators, such as the renowned Sid Martin Biotechnology Incubator near Gainesville. In fact, across the state there are more than 38,000 life sciences establishments employing over 671,000 people. But an ongoing challenge is that both states are in competition for scarce talent with other biomedical "hotbeds", such as California, New York, the Carolinas and New Jersey.
As Black points out: "The life sciences area in Florida is going to grow, so one of the challenges we face is ensuring that we have the talent we need to maximise that growth path."
The state of Florida's medical device sector is the second largest in the US in terms of establishments registered with the FDA.
Number of companies: 394; employees: 20,775
Business incentives for Florida investment:
No sales tax on R&D equipment
No state personal income tax
No state property tax
No corporate income tax on limited partnerships
No corporate income tax on subchapter S-corporations
No corporate franchise tax on capital stock
No property tax on goods-in-transit for up to 180 days
No sales and use tax on goods manufactured or produced for export outside the state
No sales tax on purchases of raw materials incorporated in a final product for resale, including non-reusable containers or packaging
The Massachusetts medical device sector is one of the country's most innovative and successful. Its success is largely down to the amount of units it exports, a market that has been growing steadily over the last decade and beyond. The sector's export value was worth an estimated $4bn in 1997; that figure had risen to as much as $5.5bn by 2004. By 2006 exports of medical devices from the state were equal to 9% of all industrial US exports.
Number of companies: 250+; employees: 21,000
Investment within the state's medical device sector is heavily encouraged by state legislators. Their work to promote the region to both domestic and international investment is working. Figures show that in 2006 Massachusetts received 11% of all US venture capital funding for medical devices, amounting to $292m.
HEALTH IN THE US
The US healthcare system is the largest in the world in terms of annual spend per capita, amounting to $6,697 according to figures from 2005. In total that year the market was worth an estimated $1.9 trillion.
In 2007 the country's medical device market was estimated to be worth a staggering $82.6bn and is said to be one of the world's most attractive prospects. As many as seven from the top ten leading international device manufacturers are US-based companies, including General Electric, Medtronic, Baxter and Johnson & Johnson.
Despite the complex nature of the country's regulatory system the domestic market is one with huge potential, if not extremely competitive. But that is not to say it is impossible to make inroads. Partly as a result of US manufacturers utilising opportunities to reduce their costs by shifting some of their operations abroad – to locations such as Ireland and Latin America – the US import market accounts for almost a third (32%) of the total value.