The bad news: We're not getting any younger. The good news: As we slouch into those golden years, plastics will help us to live longer and more comfortably. A well-researched and eminently readable issue of Plastics Market Watch devoted to medical technology, published by SPI: The Plastics Industry Trade Association (Washington, DC), analyzes various aspects of the global medtech markets and makes a persuasive case for the inevitability of plastics in medical product design and manufacturing.
There are relatively few metals suitable for use in the human body, note the authors of the report, who cite the chamber quintet of stainless steel, cobalt-chromium, titanium, vanadium and nickel-titanium. Technological advances that began largely in the 1980s prompted a shift toward the use of engineering plastics that could be applied cost effectively to the fabrication of single-use devices and intricate device designs.
"Plastics can be made to dimensions from millimeters to meters, from thin walls to thick walls, and in a range of shapes and colors," notes the report. "As devices become functionally more complex and smaller, their components such as gears, levers, buttons, axels, activators and counters also need to be smaller while maintaining high performance, dimensional stability, durability and reliability. The micro-molding of such components with plastics allows for the manufacturing of precision parts with tight tolerances." Pricing pressures have also been a significant factor in the move to polymers, leading the authors to conclude in the introduction of the 48-page issue that "the market for plastics in medical devices is substantial and growing."
Plastics Market Watch: Healthcare and Medical Devices devotes chapters to the utility of plastics as well as the demographic, technology, economic and public policy trends affecting the global medical technology sector and, by extension, the plastics processing industry. Here are some of the highlights.
- There are four primary categories of plastics used in medical devices, notes the report: Commodity thermoplastics, including PVC, polyolefins and polystyrene, account for approximately 70 percent; engineered thermoplastics represent about 20%; the remaining 10% consist of high-temperature thermoplastics, a category that includes polyimides, polyetherimides, polysulfates, polyarlyether ketones, liquid crystalline polymers and fluoropolymers; styrenics, silicones, thermoplastic elastomers and thermosets are also used in medical applications.
- War is hell, but the modern battlefield is also a crucible of medical innovation. Far fewer soldiers die in the line of duty than ever before, but many pay a price in lost limbs. "Medical science has made great strides in developing advanced prostheses to enable wounded veterans to surmount their injuries and return to productive lives," write the authors of the report, and they cite the exemplary case of Marine corporal Rob Jones, who lost both legs above the knee to an improvised explosive device in Afghanistan, and "rode a bicycle from Maine to San Diego to raise funds for wounded veterans (and also to prove he is NOT handicapped). Today's prostheses are vastly superior to the technology of only a few years ago, thanks in large measure to the use of advanced plastics that have tensile strength, withstand exposure to liquids and—most importantly—are lighter than metal."
- The graying of the world's population has been well-documented, but it bears repeating, as the numbers are staggering. The total number of people aged over 65 will rise to 800 million by 2025, reaching 10% of the world population. By 2025, possible increases of up to 300% of the older population are anticipated in many developing countries, especially in Latin America and Asia.
- An aging population combined with a surging middle class in countries such as China, which was scarcely imaginable even a few years ago, is creating what has been called healthcare's perfect storm. The middle class will increase globally from 1.8 billion in 2009 to 3.2 billion by 2020, and 4.9 billion by 2030. Most of this growth will come in Asia which by 2030 will represent 66% of the global middle class population and 59% of middle-class consumption, writes SPI. "There will be a collision of the largest generations ever to become elderly with the age sector that demands the most healthcare services," notes marketing expert Ken Gronbach, author of The Age Curve: How to Profit from the Coming Demographic Storm. "In many cases, worldwide the number of 70-plus year old people will double. When a market doubles in demographic size, the demand for products and services related to that market more than doubles—a phenomenon called ‘the multiplier effect,' " writes Gronbach.
- Providing quality medical care to this surging population will be a tremendous challenge to governments across the world. The United States, as the authors correctly note, is the only major industrialized nation in the world to have linked healthcare coverage to employment. The Affordable Care Act (ACA) introduced some structural changes, but it does little to control costs, which continue to weigh heavily on the economy. The United States spends 17% of its gross domestic product on healthcare, write the authors, whereas other industrialized nations spend around 10%. Yet, the outcomes in the United States are no better, and, in some cases, are worse.
- To absorb the medical device excise tax, which is part of the ACA, and comply with reimbursement requirements, U.S. medical device OEMs increasingly must rein in costs, and as a result they "are shifting focus to innovation and design rather than manufacturing, and depending on outsourcing," according to the report. It estimates that the medical device outsourcing industry represents a $10 billion market that is growing faster than the underlying medical device market itself. (The report projects a 6.3% compound annual growth rate for the medical technology industry.) In this context, "reliance on outsourced manufacturing such as injection molders is expected to increase as medical device manufacturers further restructure and downsize their in-house manufacturing capabilities," notes the report. "Because of the tight tolerance, highly-regulated and critical nature of medical devices, OEMs are scrutinizing prospective outsourced manufacturers carefully in terms of product reliability, proven ability to assist in medical device design, a history of strong performance and financial health, product performance in the marketplace, cost and value-added capabilities including assembly, packaging and sterilization." (A recent article in PlasticsToday, "Making it in medical molding," examines some of these issues from the perspectives of injection molding companies that work with medical device OEMs.)
- Medical plastics transaction volume decreased 7% during 2012, although the sector has generated some of the highest valuations in the industry, notes Plastics Market Watch: Healthcare and Medical Devices. Strategic buyers accounted for 74% of medical plastics transactions in 2012, which is a driving factor in the high valuations seen in medical devices, as strategic buyers are able to realize greater synergies than financial buyers. The authors also report that there is an increasing trend for medical plastic processors to be focused exclusively on this sector, divesting or separating operations that serve other lower margin end markets. Injection molding accounted for nearly 60% of all medical plastic M&A volume in 2012 ,followed by extrusion and thermoforming which make up 30% and 7% of volume, respectively.
When it comes to medical technology, in sum, Mr. McGuire's admonition to young Benjamin in The Graduate—"I just want to say one word to you . . . just one word . . . plastics"—remains relevant. "All of the critical data—soaring populations, rising middle classes, aging population, advances in medical —point to an ever stronger market for medical devices, which today are largely comprised of plastics," writes SPI in Plastics Market Watch: Healthcare and Medical Devices. "In earlier years, the past growth of plastics in healthcare, particularly medical devices, came largely from material substitution, but that transition has been accomplished. Now the growth of the markets for medical devices is almost synonymous with rising demand for plastics, or so it would seem."
Plastics Market Watch: Healthcare and Medical Devices can be downloaded free of charge (registration required) from the SPI website.