Global refractive market holds potential for growth, analyst reports

According to survey analysis, new technologies provide promising opportunities to expand the refractive market worldwide.

David R. Harmon

There is ample room for the global refractive market to grow, and overall market penetration is still low, according to David R. Harmon, president and senior editor of Market Scope.

“We are not capped out … we can continue at this rate far into the future and still have opportunity for growth,” he said, during an informational meeting for media hosted by Advanced Medical Optics (AMO) in August.

Wavefront-guided LASIK is a growing percentage of all laser refractive surgical procedures, and new IOL technology also holds potential for growth, Mr. Harmon said.

“We see these new IOLs as expanding the refractive market and not taking away from it,” he said. “We see these as additional opportunities to grow the refractive surgical market further.”

Global refractive trends

Refractive surgery in Europe and other countries began surging before 1996, Mr. Harmon said. The United States was lagging at that time, but ultimately moved ahead of other markets, he said.

In 1999, there were only about 500 laser centers in the United States, and there was rapid growth up until 2001, when LASIK volumes dropped, he said.

“Many laser centers went out of business in this period of time,” Mr. Harmon said. “The number of laser centers has grown slightly in recent quarters in response to growth in demand for refractive surgery.”

Markets outside of the United States are growing at a faster rate due to growing demand for refractive surgery in India and China, he said.

“There were about two dozen lasers in India 3 or 4 years ago,” he said. “Today, there are approximately 200 laser centers in India with relatively high prices. An emerging middle class in these regions is creating a growing market for refractive surgery.”

In the United States, demand for refractive surgery has been significantly higher during the first quarter of the year due to employee flex spending plans. After the first quarter, procedure volumes decline throughout the remainder of the year, Mr. Harmon said.

“The year 2000 was the peak in demand for refractive surgery; however, procedure volumes may surpass those numbers in 2005,” he said. “Declines in procedure volumes during 2001 through 2003 were primarily due to low consumer confidence levels.”

During this period, the consumer confidence index was as low as 30% below normal due to a recession in the United States, Mr. Harmon said. In 2004, however, consumer confidence levels started to rise again.

“That doesn’t explain all of the change. It explains about 50% to 60% of the change,” he said. “The rest of the change is explained by changes in technology and growth in population.”

Global refractive procedures

U.S. refractive procedures

Source: Market Scope

LASIK pricing

The average price of LASIK in the United States is currently more than $1,900 per eye, Mr. Harmon said.

“In 1999, the average price was over $2,000, but prices declined through 2003 and then began to increase again with the introduction of wavefront-guided LASIK,” he explained.

Prices dropped from $2,000 per eye in 1999 to $1,500 per eye in 2002, and procedure volume also declined during that time period, he said.

“While there is a low correlation between price and volume on a macro level, we do see volume differences at individual practices related to price,” Mr. Harmon said. “A low-priced refractive practice often attracts higher volume, but the lower price does not increase the number of patients in that larger market.”

To understand how price impacts volume, Market Scope surveyed 10,000 LASIK patients. Only 3% said they shopped for LASIK based on price, while 97% said they shopped based on other factors.

“You have a larger group that is shopping for value,” Mr. Harmon said.

There has been an increase in the trend to offer all laser-based procedures at a single price, he said.

“With a single price, practices tell patients that each will receive the best technology and service available, and everybody pays the same price,” he said.

Most surgeons are still pricing other ways, Mr. Harmon said.

“New technology has increased the variety of refractive surgical procedures and makes it more difficult to track volumes and prices,” he said. “But excimer laser procedures still account for almost 97% of refractive surgery.”

Phakic IOLs, refractive lens exchange and conductive keratoplasty still only account for a small portion of the procedures in relation to the total picture, he said, but there has been some growth in refractive lens exchange and phakic IOLs.

Average LASIK Price

Source: Market Scope

Changing consumer advertising

Consumer advertising for refractive surgery is becoming more complex due to the variety of technologies and surgical procedures available, Mr. Harmon said. Most people understand what LASIK is, he said, but they are not aware of other treatment techniques, such as phakic IOLs.

There is much discussion about which technology is best to use, even among the professional community, he said.

Refractive surgery can be classified into four categories: myopia, presbyopia, hyperopia and cataracts, although presbyopia overlaps with the other three categories, he said. In general, the U.S. market opportunity for myopia is 40 million people, presbyopia is 27 million people, hyperopia is 22 million people, and the cataract market is 36 million people, Mr. Harmon said.

A mainstay myopic market

Mr. Harmon estimated that nearly 8 million patients had undergone LASIK by 2004 in the United States, and that number is predicted to increase to 15 million by 2008.

“There is a pool of patients in the United States – almost 120 million eyes – that are good candidates for LASIK,” he said.

Myopes are the primary market for laser refractive surgery, Mr. Harmon said. About 85% of patients that have LASIK or surface ablation fall into this category, he said.

Every year, about 4.2 million people in the United States turn 21, and about 27% of those people are myopic, Mr. Harmon said.

“These new myopes continually replenish the pool of good candidates for refractive surgery,” he said. “At current procedure volumes, we’re not even keeping up with growth in the pool, indicating there’s room for growth in the market.”

“LASIK is the mainstay of the myopic market,” he said. “Other refractive technologies don’t compete in this market segment, but when you get into other market segments there is a wide variety of solutions.”

Despite the development of alternative refractive surgical techniques, Mr. Harmon and colleagues at Market Scope do not anticipate that they will detract from the LASIK market.

“We see new IOLs and other technologies to treat these other refractive errors, which have not have been addressed with laser refractive surgery,” he said.

Cataract and presbyopia

“Obviously, cataract surgery has been available for a long period of time,” he said. “It is a busy industry and much larger than the refractive industry.”

In the past, cataract patients had their clouded lenses removed, an IOL implanted and then were prescribed spectacles to correct any residual refractive error and to provide near vision, he explained, but new technology is altering the cataract market.

“We’re going to see that whole emphasis change quite a bit,” he said. “With new technology, you can provide better vision in all ranges, and patient expectations are becoming much closer to those of refractive surgical patients.”

In the case of presbyopia, new products may actually expand the opportunity for the laser market, Mr. Harmon said.

“Presbyopic IOLs are a good example. In order to achieve the intended vision in all ranges, patients must achieve the targeted level of correction within a narrow range,” he said. “One of the reasons why you see the high price for these procedures is the potential need for a subsequent LASIK touchup.”

Wavefront capability

“Wavefront-guided LASIK became available in the United States in the first quarter of 2003, and market penetration really picked up after Visx (AMO) received regulatory approval,” he said.

The average penetration of wavefront technology in the United States masks the individual surgeon average, Mr. Harmon said.

“Refractive surgeons that are wavefront-capable and are actively promoting the procedure may have wavefront-guided penetration levels of 80% or 90%,” he said. “But there is a large number of surgeons that either do not offer it or only offer it to only 5% of their patients. That brings the overall average down.”

A 2004 Market Scope survey revealed that 34.9% of surgeons actively offer wavefront technology to their patients, 19.8% offer wavefront only to patients who have a large amount of higher-order aberrations, 10.9% offer it to patients with high spherical error, 29.7% use it only for patients who request it, and 4.7% do not offer it to their patients at all.

Wavefront-guided LASIK

Percent of wavefront-guided LASIK performed

Source: Market Scope

Laser and microkeratome shares

According to a first-quarter 2005 survey, Visx holds about a 60% share of the laser vision correction procedures, according to Mr. Harmon. He also reported that WaveLight has about 4.3% of the market, Bausch & Lomb has about 11.5%, Alcon has 19.5%, and Nidek has 4.3% of the market.

“If you look back over time, you’ll see that the Visx portion has been relatively constant. The Alcon portion, once it reached this range, has been fairly constant but does fluctuate. Nidek market share of procedures has dropped off. At one point, about 10% of U.S. procedures were performed using Nidek lasers,” he said. “Procedure market share has been growing for WaveLight and Bausch & Lomb lasers, but they are newer to the market.”

As for microkeratomes, the first quarter data for 2005 shows the Bausch & Lomb Hansatome with 40.8% of the market.

“At one time, this product had been about a 70% share, but it has been on the decline,” he said. “They recently introduced a new microkeratome, and it will be interesting to see if that helps them stabilize their market share.”

Moria has been consistent at approximately 25%, and the AMO Amadeus microkeratome has about a 9.6% market share and has been growing.

“The Amadeus is a relatively new product in the mechanical microkeratome world, and the device was introduced just as demand for new microkeratomes was declining,” Mr. Harmon said.

Procedure market share for the IntraLase FS femtosecond laser has grown to approximately 19%, Nidek has about 4.7% and all other microkeratomes hold a 5.1% share, he said.

For Your Information:

• David R. Harmon, president and senior editor of Market Scope, can be reached at the Market Scope Newsletter, 13610 Barrett Office Drive, Suite 211, Manchester, MO 63021; 314-835-0600; fax: 314-835-0606; e-mail: daveharmon@market-scope.com.

• Advanced Medical Optics can be reached at 1700 E. St. Andrew Place, Santa Ana, CA 92799; 800-449-3060; fax: 866-872-5635; Web site: www.amo-inc.com.
• Alcon Laboratories can be reached at 6201 South Freeway, Fort Worth, TX 76134; 817-293-0450; fax: 817-568-6142; Web site: alconinc.com.
• Bausch & Lomb can be reached at 8500 Hidden River Parkway, Tampa, FL 33637; 800-227-1427; Web site: www.bausch.com.
• eyeonics can be reached at 6 Journey, Suite 125, Aliso Viejo, CA 92656; 949-916-9352; fax: 949-916-9359; contact@eyeonics.com.
• IntraLase can be reached at 9701 Jeronimo Road, Irvine, CA 92618; 949-859-5230; 877-393-2020; Web site: www.intralase.com.
• Moria USA can be reached at 1050 Cross Keys Drive, Doylestown, PA 18901; 215-230-7662; fax: 215-230-7670; e-mail: moria@moriausa.com; Web site: www.moriausa.com.
• Nidek can be reached at 47651 Westinghouse Drive, Fremont, CA 94539-7474; 510-353-7710; fax: 510-226-5750; Web site: www.usa.nidek.com.
• WaveLight can be reached at 46040 Center Oak Plaza, Sterling, VA 20166; 571-434-8500; fax: 571-434-8180; e-mail: sterling@wavelight-laser.com.

• Daniele Cruz is an OSN Staff Writer who covers all aspects of ophthalmology.