| Pharma is the powerful subsector, and medical | | | | J&J and others has grown more intense, |
| devices/technology its smaller sibling within the | | | | they are increasingly looking to acquire small |
| huge healthcare industry. They are different | | | | companies with promising technologies. This has |
| enough that the two subsectors often move in | | | | spurred a great deal of entrepreneurial growth. |
| opposing directions, enabling investors to stay | | | | Is there such a thing as a blockbuster medical |
| diversified within the booming healthcare by | | | | device? Except for drug-eluting stents, probably |
| shifting in and out of the two subsectors at | | | | not, when you compare devices to top |
| appropriate times. | | | | pharmaceutical winners. But medical technology is |
| In a number of treatment areas, one sector can | | | | addressing some huge markets, with big profit |
| take away market share from the other. Take | | | | potential. |
| the huge heart disease market. While surgical | | | | Take back pain. It's the scourge of millions with a |
| interventions have become increasingly minimally | | | | market of over $60 billion annually. Artificial disc |
| invasive, pharmacological interventions, including | | | | technology is rapidly coming up with advances to |
| thrombolytics, fibrinolytics, beta blockers, statins | | | | treat chronic back cases. Carotid stenting, which |
| and anti-platelet treatments are covering a wider | | | | was approved last year, is less invasive than |
| spectrum of acute coronary syndromes, | | | | surgery and sales of carotid stents are anticipated |
| sometimes eliminating the need for surgery. | | | | to grow to $1 billion within the decade-from less |
| In evaluating the potential of the two sectors, it | | | | than $100 million today. And the annual growth |
| must be said that there is nothing quite like | | | | rate of computer aided surgery rate is expected |
| getting in early on a blockbuster drug and riding it | | | | to increase from 10% in 2005 to more than 20% |
| to new highs. In the meantime, smart pharma | | | | in 2009. |
| investors stay on the lookout for news about | | | | Aging baby boomers will aid the medical device |
| clinical trials that result in new indications for a | | | | boom. Age-related ailments combined with |
| drug, or that show a reduction in mortality, side | | | | medicare eligibility will expand the use of |
| effects, etc. Modifications in a drug that expand | | | | pacemakers, defibrillators, stents, orthopedic |
| target populations are also good. Often these | | | | implants and cochlear implants. |
| kinds of developments show up on TV | | | | Medical devices/technology and pharmaceuticals |
| commercials. Currently, through a spate of | | | | provide a good way to diversify within healthcare, |
| commercials you can witness the battle unfold | | | | though you must stay current on developments |
| over new indications for insomnia treatments, as | | | | in both fields. Of course, if you're really looking for |
| drug companies address the huge and growing | | | | growth you might turn to an even smaller |
| problem of sleeplessness in America. | | | | healthcare/biotech sibling- diagnostics. With |
| But on the whole, right now Pharma is in a bit of | | | | approval power over payments, healthcare |
| a funk, hoping for new blockbusters, while medical | | | | providers, in essence, control the money, and |
| devices/technology is more exciting, especially | | | | thus wield enormous influence over which |
| minimally invasive technologies. Substantial | | | | treatments grow share. Increasingly, healthcare |
| acceleration in FDA approval timelines since the | | | | providers are looking at preventative measures to |
| passage of the 1997 Modernization Act, has | | | | stave off the huge expense of treating full-blown |
| helped the medical device industry. | | | | diseases. And how do you prevent diseases? |
| As the competition among broad-based medical | | | | Early diagnosis. But more on that in another article. |
| technical companies, like Medtech, Boston Scientific | | | | |