Global Growth Markets in Medical Devices

Michael D. Taylor Senior Director, International Affairs and Trade

December 12, 2013

Shanghai, China

SPE China Plastics Conference-Medical Devices & Packaging 2013

Agenda

• Drivers of the Global Trade in Medical Devices • U.S. Medical Devices Exports • Growth Export Markets for Medical Devices • Predicting Medical Device Export Growth

Founded in 1937,

SPI is the only U.S. trade association

representing ALL segments of the plastics industry.

The SPI2020 Mission

SPI advances a pro-manufacturing agenda,

strengthens global competitiveness, improves

productivity and pursues zero waste strategies

for the U.S. plastics industry.

Strategic Focus Revolves Around Three Areas

Key Factors for Global Trade in Medical Devices

Growth of Middle Class

Aging Population

Life Expectancy

Public Health Expenditures

Regulatory Environment

New Disease Patterns

Global Growth of the Middle Class

Between 2000 and 2009, 50 million individuals were added to the middle class in Latin America and the Caribbean—bringing the total from around 115 million people to over 165 million. Around 2009, the middle class consisted of 61 million people in Brazil (up from 39 million a decade earlier), 75 million in Russia (up from 31 million), and 83 million individuals in China (a jump from just 10 million). In Brazil, the middle class makes up almost one-third. In Russia, the middle class grew from being one-fifth to more than one-half of the population. In contrast, in China, the 83 million people defined as middle class only represent less than 10 percent of the population. In 2010, only 9 million Indians had reached middle-class status, which is less than 1 percent of the population. These low estimates reflect that, despite a good growth performance in the 2000s, India’s GDP per capita remains below the levels of the other BRIC countries.

The Impact of the Middle Class

Thanks to more sophisticated consumption habits, the middle classes in emerging countries will influence global trade patterns. The size of the middle class can determine the pace of reform. Everything else being equal, when the proportion of the middle class in a society increases, social policy on health and education becomes more active and the quality of governance regarding democratic participation and official corruption improves. Domestically, the middle classes will have a growing voice by means of higher purchasing power—moving up the consumption chain to high-end, more technical goods—and by demanding better education. And with a growing critical mass, they will push for institutional reforms and improved service delivery in areas that are beneficial to them.

The Expanding World Middle Class

Middle Class Growth in the BRIC Countries

Time for 65+ Percentage of Population to Double

Growth of Population 65+ in India and China

Percentage Change in World’s Population by Age: 2010-2050

Global Life Expectancies

Total Health Expenditures Per Capita 2000-2011

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South Korea Brazil Russian FederationTurkey South Africa MexicoIran Malaysia ChinaThailand

Economies Ranked on their Ease of Doing Business 2012

Economy Ease of Doing Business Rank South Korea 8

Malaysia 12 Thailand 18

South Africa 39 Mexico 48 Turkey 71

China 91 Vietnam 99

Pakistan 107

Egypt 109

Russian Federation 112 Indonesia 128

Bangladesh 129 Brazil 130

Nigeria 131 India 132 Philippines 138

Iran 145

Mortality Rates by Income Group* and Cause-of-Death Group,

2000 and 2011

Group I: Communicable, maternal, perinatal and nutritional conditions Group II: Noncommunicable diseases Group III: Injuries

* Countries are classified according to the World Bank income group for the year 2011 (World Bank list of economies, July 2012).

The 10 Leading Causes of Death, World, 2000 and 2011

No Causes of death, 2000 Deaths (million)

% of deaths

No Causes of death, 2011 Deaths (million)

% of deaths

1 Ischaemic heart disease 5.9 11.2 1 Ischaemic heart disease 7.0 12.9

2 Stroke 5.6 10.6 2 Stroke 6.2 11.4

3 Lower respiratory infections 3.5 6.7 3 Lower respiratory infections

3.2 5.9

4 Chronic obstructive pulmonary disease

3.0 5.8 4 Chronic obstructive pulmonary disease

3.0 5.4

5 Diarrhoeal diseases 2.5 4.7 5 Diarrhoeal diseases 1.9 3.5

6 HIV/AIDS 1.6 3.0 6 HIV/AIDS 1.6 2.9

7 Preterm birth complications 1.4 2.7 7 Trachea, bronchus, lung cancers

1.5 2.7

8 Tuberculosis 1.3 2.6 8 Diabetes mellitus 1.4 2.6

9 Trachea, bronchus, lung cancers

1.2 2.2 9 Road injury 1.3 2.3

10 Diabetes mellitus 1.0 1.9 10 Preterm birth complications

1.2 2.2

11 Road injury 1.0 1.9

13 Tuberculosis 1.0 1.8

Medical Devices by NAICS Codes

A medical device is an instrument, apparatus, implant, in vitro reagent, or similar or related article that is used to diagnose, prevent, or treat disease or other conditions, and does not achieve its purposes through chemical action within or on the body (which would make it a drug).

NAICS Code Medical Device Industry Sub-Sectors

334510 Electromedical Apparatus

334517 Irradiation Apparatus

339112 Surgical & Medical Instruments

339113 Surgical Appliances & Supplies

339114 Dental Equipment & Supplies

339115 Ophthalmic Goods

U.S. Medical Devices Exports 2000-2012

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Japan Netherlands China Germany Canada

Australia Sweden Belgium France Mexico

U.S. Electromedical Apparatus Exports 2000-2012

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Japan Netherlands China Germany Canada

Australia Sweden Belgium France Mexico

U.S. Irradiation Apparatus Exports 2000-2012

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Japan China Germany France

Canada United Kingdom Mexico Brazil

Australia Belgium

U.S. Surgical & Medical Instruments Exports 2000-2012

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Japan Netherlands Belgium Canada Mexico

Germany China Australia France Switzerland

U.S. Surgical Appliances & Supplies Exports 2000-2012

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Netherlands Japan Canada Germany

Belgium China Australia Mexico

Switzerland United Kingdom

U.S. Dental Equipment and Supplies Exports 2000-2012

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Canada Germany Japan Mexico Italy

France Netherlands Switzerland South Korea Australia

U.S. Ophthalmic Goods Exports 2000-2012

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Japan Canada United Kingdom Hong Kong

Germany South Korea Singapore Mexico

Netherlands Italy

U.S. Medical Devices Exports to China 2000-2012

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Dental Equipment & Supplies Electromedical Apparatus

Irradiation Apparatus Ophthalmic Goods

Surgical Appliances & Supplies Surgical & Medical Instruments

24%

31%

7%

24%

Total Health Expenditures

Per Capita

Percentage Population

65 and Over Life

Expectancy at Birth

Total U.S. Medical Device Exports

GDP Annual Growth

Rate Malaysia South Africa Thailand

Brazil Russia India China Bangladesh Egypt Indonesia Iran Mexico Nigeria* Pakistan Philippines South Korea Turkey Vietnam

Predicting Medical Device Export Growth

Political stability

• Momentum: successful NPE2012 in Orlando

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Thank You!

谢谢 Merci Vielen Dank Grazie ありがとうございました

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