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'Big three' ophthalmic companies see fertile markets in Europe
Cataract and refractive products are thriving for Alcon, Allergan and Bausch & Lomb; each company also is finding other profitable niches in European eye care.
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BRUSSELS - The globalization of the eye care industry was made visible here at the annual meeting of the European Society of Cataract and Refractive Surgery (ESCRS). The "big three" U.S.-based multinational companies - Alcon, Allergan and Bausch & Lomb - dominated this exhibit hall and also, according to their sales data, the strong European market for ophthalmic drugs, devices and instruments.
Alcon assimilating
---The ESCRS exhibit hall was busy throughout the annual meeting, with all of the latest phacoemulsification instruments, intraocular lenses, excimer lasers, microkeratomes and other surgical technologies on display.
Alcon and Summit Autonomous had reserved separate exhibit space well before their merger this spring, so there were two displays of the LADARVision excimer and Krumeich-Barraquer microkeratome. That was perfectly all right with Alcon president and chief executive officer Tim Sear.
"It has worked out well," Mr. Sear told Ocular Surgery News. "Demonstrating the microkeratome requires a relatively quiet space for teaching and discussion. And it has been very busy, with people in that booth all day long. We are also very impressed with the caliber of the Summit Autonomous team, whom we are working with at a congress for the first time. We appreciate the fact that now that we are getting into the refractive business at a relatively late stage, we are doing so with the most highly developed technology and access to a full patent portfolio."
Although excimer lasers became available for clinical use in Europe before the United States, the refractive surgery market did not grow nearly as rapidly.
"In some European markets such as Germany, refractive surgery has taken off rather slowly," Mr. Sear said. "We see this as a wonderful opportunity."
Cary Rayment, of Alcon agreed.
"I think the doctors are very interested in the LADARVision technology - the scanning spot and unique eye tracker," Mr. Rayment said. "This is the first time they have seen that here. Surgeons are also glad to hear that Alcon is in refractive surgery. They are used to a high level of service and technical support from Alcon, and they can be assured of getting that now with their laser."
Mr. Sear added, "We have also integrated the Grieshaber product line into the Alcon exhibit, and it has been given close attention by our surgical product division."
How does European ophthalmology compare with other markets around the world that Alcon serves?
"The demographics of ophthalmic disease are essentially the same in Europe as in the U.S. in terms of cataract, macular degeneration, and so on," Mr. Sear said. "We have had an exceptional year for sales of our cataract surgery equipment across Europe.
"A lot of innovations come from Europe - the early ophthalmic laser companies were European. Every year we see the practice of ophthalmology becoming more globalized. Just as we see more doctors from outside the U.S. going to the American Academy of Ophthalmology meeting and the American Society of Cataract and Refractive Surgery meeting, we see more Americans coming to the ESCRS and national meetings here in Europe. Today there is much interchange, many fellowships being offered, much teaching being done across borders."
One of the most significant differences between European and U.S. ophthalmology is in the reimbursement systems, with government-administered health care predominating throughout Europe. Those systems are far more frugal than American managed care or even Medicare, but it does not seem to be compromising the quality of eye care.
"We see European ophthalmic surgery as being leading-edge," Mr. Sear said.
"Even in the U.K.," Mr. Rayment added, "they have a new initiative to increase the number of cataract procedures. They've obviously recognized the problem of the waiting list and are prepared to so something about it in the near term."
With European ophthalmologists operating at a very high level of technical proficiency, they are also demanding all of the latest technology from the companies.
"The single-piece AcrySof is a key focus for us here, for example," Mr. Rayment said. "The paper presentations continue to show the unique biocompatibility of the AcrySof and how the biomechanics of the single-piece lens assure centration and reduce striae of the capsular bag. These are the findings of surgeons around the world who are using more and more of these lenses."
"We have almost no reports of glistenings or glare," Mr. Sear added, "and the posterior capsule opacification rates are exceptionally low."
The Alcon executives agreed that the high expectations of western European ophthalmologists would continue to make the region a fruitful marketplace for new technology well into the future.
"One of the other things that is happening now," Mr. Sear said, "is the opening up of eastern Europe. There were always a reasonable number of well-trained ophthalmologists there, but they didn't have access to the necessary equipment. I remember going to Prague for the first time and one of the doctors told me they had to share one operating microscope between 15 ophthalmologists. Many of them were diagnosticians rather than surgeons just because of the limitations in the equipment. The economies of these countries are now burgeoning and now they can get the equipment. We see increasing numbers of surgeons from eastern Europe at the meetings and in our own wet labs."
Allergan prospering
Allergan had a new deal to announce just as the meeting got started. Appropriately enough, it was a strategic partnership agreement with Allegiance Santé, a subsidiary of Cardinal Health, to supply Allergan customers in Europe with custom procedure packs. (The agreement also covers Africa and the Middle East.) David Pyott, chief executive officer of Allergan, explained the company's goals.
"It's building upon the success we have had for about the past 4 years working with Allegiance in the U.S.," Mr. Pyott said. "I think the demand for custom packs is a little greater in the U.S., but it's growing here."
Outsourcing the custom pack business fits in with the overall business philosophy of Allergan, Mr. Pyott told Ocular Surgery News.
"Our strategy is not to spend time focusing on a thousand different things," he said. "Our focus is on IOLs, foldable IOLs, multifocal IOLs and phaco. By teaming up with Allegiance on this particular business, which is their specialty, we help them expand their entry into Europe."
The European foldable IOL market is quite different from that in the U.S. because there have been many more lens options available - in terms of both material and design - for much longer. Still, the market there has been dominated by Alcon's AcrySof just as it has been in every other major world market. Mr. Pyott sees this as an opportunity for Allergan's new foldable acrylic.
"Sensar was first launched in Europe," he said, "and I just saw the data that shows we have captured almost one quarter of the European acrylic IOL market within 18 months. And our silicone franchise continues to grow strongly as well."
Cataract surgery product marketing tends to be based on selling a whole package of devices, drugs and instruments, so the success of the IOL line is also encouraging for the company's high-end phacoemulsifier, the Sovereign.
"There's an incredible amount of interest for this machine," Mr. Pyott said. "People really see it as the latest generation that combines the best of both worlds - the fluidic capabilities of Prestige and the power of Diplomax - with new features as well.
"Given some of the challenges that we had with the surgical business when I started just under 3 years ago, the first thing to respond was the IOL business. On the phaco side, we put in better service and much better trained reps in addition to new products. It's an area where we've set ourselves an objective to get even better."
How does Allergan see the cataract surgery market in Europe evolving over the next few years?
"There is a gradual growth in the cataract market just because of the aging of the population - probably 2 or 3%," Mr. Pyott explained. "The other issue in Europe is how long patients have to wait for cataract surgery. In the U.K., it's a year if you're lucky, unless you opt out and go to a private practice. It's a huge debate in Europe as to how you ration health care."
Even though the ESCRS is a surgical specialty meeting, a portion of the scientific program is devoted to glaucoma in recognition of the number of glaucoma patients these ophthalmologists treat in their daily practice. For Allergan, that practice segment represents a significant growth area for their pharmaceutical line.
"In the first half of 2000, Alphagan grew worldwide by 56%," Mr. Pyott said. "The large growth driver here is the decline of beta blockers. It's interesting to contrast Europe and the U.S. The last figures I saw had beta blockers as 34% of new glaucoma prescriptions in the U.S., while in Europe it's still two-thirds. That gives great growth prospects for us, and when you include Latin America and Asia - outside of Japan - it"s even more promising."
Bausch & Lomb excited
One of the "big three" companies had a major surprise for the European ophthalmology community on the eve of the ESCRS meeting. Bausch & Lomb announced that it was buying Chauvin, one of the major French ophthalmic companies. Mark Sieczkarek, President of Bausch & Lomb for Europe, Middle East and Africa, explained the reasons behind the acquisition.
"Chauvin has a strong cataract line here in Europe," he told Ocular Surgery News. "In combining the businesses we will have a full line of IOLs to offer doctors, from PMMA IOLs to silicone and now, with the acquisition of Chauvin, acrylic lenses."
Chauvin also brings a line of new pharmaceutical products to Bausch & Lomb.
"Pharmaceuticals is about $70 million of Chauvin's roughly $100 million total annual business," Mr. Sieczkarek explained.
Although the cataract business does not have the same "sex appeal" as refractive surgery does today, Mr. Sieczkarek agrees with the other executives interviewed for this article that cataract is a strong business area.
"Refractive surgery certainly is the more exciting part of the business and everybody is getting caught up in it," he said, "but we are intrigued by the opportunities in the contact lens market and certainly the cataract business. Cataract has always been the original driver of our business, even for refractive surgery, and we are not leaving that behind.
"One of the differences in Europe versus the U.S. is that there is a lot less contact lens use here - it's only about one-third the size of the U.S. market. Some of that is due to cultural differences in terms of fashion. I also think that the industry as a whole has not invested as much as they have in the U.S. But I look at that as an opportunity. As an industry, we are beginning to do more to make consumers and practitioners more aware of contact lenses and their benefits."
The reluctance of Europeans to adopt contact lenses has been paralleled by a reluctance to embrace refractive surgery. That may be changing, however.
"We are seeing greater acceptance of refractive surgery, and it is growing," Mr. Sieczkarek said. "The market had been stabilizing somewhat for a while, but in the past year its has started to take off again. It has a lot of potential but also a lot of current opportunity as well.
"We started off this year's ESCRS with our Technolas users meeting, and we're very excited to be working with such a good group of surgeons. We have a lot of clinical investigation going on with our Zyoptix customized ablation system. We now have results in over 200 eyes with customized ablation and it is looking very good."
For Bausch & Lomb as well as the other companies, European ophthalmologists are often the first to try new technologies before they are brought to the U.S.
"Because some of the regulatory requirements are not as time-consuming to meet here as they are in the U.S.," Mr. Sieczkarek explained, "we are usually able to prove our technology's value here before it enters the U.S. market."
The consensus here in Brussels is that it is a good time to be one of the big companies that offer a full range of pharmaceutical and surgical products across the range of eye care subspecialties.
"It's a good meeting for us and for the industry," Mr. Sieczkarek said. "We now have the ability as a company to provide doctors not only with pharmaceuticals but also contact lenses and cataract and refractive surgery products. We cover the whole gamut of what doctors need, as you can really see in our booth this year, and we are one unified business in our approach to customers in Europe."