Medical equipment and supplies market in Bulgaria

It is a well-known fact that the field of healthcare and medical devices is important in regards to the quality of life. Generally, the medical device sector encompasses products such as therapeutic and surgical devices, patient monitoring equipment, and diagnostic and medical imaging technologies. It is distinguished as a very heterogeneous segment in terms of production and markets, spreading over different areas of manufacturing and healthcare services. Currently, medical devices are those that fall within the purview of regulatory agencies. In 2013, the International Medical Device Regulators Forum (IMDRF) expanded the category beyond hardware to include Software as a Medical Device (SaMD). SaMD is defined as "software intended to be used for one or more medical purposes that perform these purposes without being part of a hardware medical device".

Rising demand for modern treatments and significant profit margins are strong incentives for investors and producers. However, the production and use of medical devices is subject to a number of laws, regulations, strict standards and certification processes. Therefore, the development and manufacturing of medical devices have to take into account the macroeconomic framework with specific factors in terms of their production and use.

Global market trends

The ongoing COVID-19 crisis has brought an unprecedented impact on businesses across all sectors and the medical equipment industry makes no exception. The coronavirus outbreak has had a tremendous effect on the global supply chain and logistics. With a large number of major economies such as India and Italy going under prolonged periods of lockdown, transfer of these devices and services across international borders has been severely disrupted. Furthermore, most of the world’s leading medical devices companies have their manufacturing facilities based in China. As the epicentre of the outbreak, China has suspended most of its industrial activities, which has affected the timely delivery of necessary medical devices, resulting in negative market trends.

According to a market report by Fortune Business Insights, the coronavirus pandemic has significantly increased the demand for essential healthcare products such as ventilators, face masks and test kits. The demand for devices employed in non-essential medical procedures, however, has plummeted as resources are being conserved for the critical times that lie ahead. Therefore, many companies are increasingly modifying their growth trajectories and projections owing to the uncertainty of the degree spread and intensity of the COVID-19 disease. For example, Boston Scientific announced that it expected a revenue decline of approximately USD 40 million in the first quarter of 2020. Similarly, GE anticipated a severe hit of around USD 300 million in 2020’s first quarter as the company is one of the leaders in the healthcare and aviation sectors.

Due to a strong presence of major medical devices companies, the size of the market in North America stood at USD 177 billion in 2019, with the region holding 39% of the medical devices market share. Thus, North America is set to emerge as the leading region in this market. Fortune Business Insights’ report states that the impact of the coronavirus outbreak on the other regions in the world will be determined by factors such as preparedness of healthcare systems to tackle the crisis, per capita healthcare spending, adoption of minimally invasive diagnostics and treatments, and government initiatives to spread awareness about the disease and its prevention. It is expected for example that the market in Europe will surge as the demand for essential medical devices is skyrocketing due to the unprecedented rate of the spread of the disease in Italy, Spain, France, and the UK.

The companies active in this market are preparing for the adverse effects of the COVID-19 pandemic on their revenues. Nevertheless, despite lower earnings, the majority are pooling their resources in order to develop and introduce efficient kits and systems to rapidly diagnose symptomatic and asymptomatic patients having this virus.

The future of the industry

Medical equipment manufacturers have traditionally been focused on developing hardware (e.g., surgical equipment, joint replacements, diagnostic equipment, infusion pumps, and pacemakers). However, it is expected that in the future, software, along with data collection and analysis, will act as a key factor in influencing healthcare businesses. In many ways, data collected from the hardware will be more valuable than the hardware itself. A report from the Deloitte Center for Health Solutions suggests that 20 years from now most of this medical hardware will be commoditised. What can distinguish medical device companies from each other will be their ability to harness data collected by their devices and use it to improve well-being, anticipate health issues and help patients change the daily behaviours that impact their health. It is likely that by 2040 an omnipresent, proactive and integrated system of health and well-being will completely replace the current illness-focused system. The future of healthcare is expected to be defined by revolutionary technologies (e.g., AI, quantum computing, cloud storage and augmented and virtual reality), vast availability of mineable data, tech-savvy companies from outside the industry and empowered consumers with access to actionable data. Instead of focusing on how to most effectively treat illnesses, technology will be aimed at helping keep people from having an illness or medical event in the first place. Manufacturers of medical devices, for example those developing artificial joints and other implantable devices, might allow a transition toward more preventative care. For instance, to position itself for the future, a company that manufactures artificial joints might invest in diagnostic sensors that can detect the early stages of joint degeneration.

Manufacturing in Bulgaria

Data from the German online portal Statista shows that in 2016, there were 644 enterprises manufacturing medical and dental instruments and supplies in Bulgaria, compared to 532 in 2008. In the following section of the article we are publishing a short presentation of some of the major companies, active in this sector.

Amet

Amet is a company that develops, manufactures and distributes electronic medical equipment and modules, mechanical parts and units for incorporation. In March 2010 the company got certified for production of medical equipment in compliance with ISO 13 485 by mdc medical device certification GmbH - Stuttgart. Amet’s organisation includes four departments - R&D, Assembly & Test, Mechanics and Marketing. The coordinated work between the departments is ensured by the Quality Board which is under the control of the Management Team. Currently, Amet applies an integrated management system in accordance with ISO 9001:2008, ISO 13 485:2003, OHSAS18000:2007.

BTL Industries

The Czech company was founded in 1993 and is considered to be among the world’s major manufacturers of medical equipment. BTL’s major segments include physical therapy, cardiology and medical aesthetics. Currently, the company is building a new production base in Plovdiv. The site will include a factory, warehouses and administrative buildings. BTL Industries already has a base in Plovdiv, which employs about 300 people. It is expected that after commissioning the new production base, all activities will be completely transferred there. In this regard, the company plans to hire another 200 employees. The investment, amounting to BGN 20 million, will contribute to the overall economic development of the region. The base will be located in the central part of Plovdiv with a total floor area of 20 000 square meters. The project should be completed by 2021.

Kentamed

Established in 1995 Kentamed develops, manufactures and sells electrosurgical units for the human, dental and veterinary markets that cover a whole spectrum of clinical applications for both office-based and operating room surgery. Between 2003 and 2010 the company increased its product offerings and stepped on the international market. Kentamed’s units are capable of bipolar cutting and coagulation, laparoscopic procedures and endoscopic surgeries in saline (TUR, arthroscopy). The company is headquartered in Plovdiv.

MDM-97

Founded in 1997 in Sofia by a team of scientists and engineers, the company manufactures medical devices for physiotherapy. MDM-97’s portfolio features a wide range of devices and equipment for: hospitals, clinics and departments of physical medicine and rehabilitation; specialised medical centers and offices; sports and recreation, and rehabilitation centers; balneotherapy and recreation centers; more specialized centers for injured or disabled people. The company states that in order to ensure the quality of the offered devices it is equipped with modern, high-performance measurement technology, which allows monitoring and control of the parameters of the physiotherapy equipment – power laser radiation, power ultrasonic radiation, magnetic field intensity, shape and intensity of the generated electrical signals.

Micro View Endoscopie Optik

The company, which was founded in 2002 as a private Bulgarian-German joint stock venture in Panagyurishte, is specialised in the production of optical components for endoscopic equipment with applications in medicine and technology. Micro View Endoscopie Optik’s activity is focused mainly on Western Europe – Germany, Switzerland, Finland, the Netherlands, France, as well as the United States, Canada, Russia and South Africa. The company is a regular member of the Bulgarian Economic Chamber, the Bulgarian-American Chamber of Commerce, Bulgarian-German Industrial Association and the Association of Entrepreneurs in Panagyurishte.