CT wars heat up in China as vendorsbring spiral to entry-level segments

July 17, 1996

Vendors show new scanners at ICR show in BeijingA battle royal is looming in international markets among CT vendorsthat are introducing new spiral scanners at price points unheardof just a few years ago. The competition is likely to reach afever

Vendors show new scanners at ICR show in Beijing

A battle royal is looming in international markets among CT vendorsthat are introducing new spiral scanners at price points unheardof just a few years ago. The competition is likely to reach afever pitch in China, where Elscint, Philips, and Toshiba displayednew entry-level spiral scanners at last month's InternationalCongress of Radiology in Beijing.

CT scanning has long been a favorite tool of Chinese radiologists.The modality has obvious diagnostic utility and is easier to useand maintain in developing nations than MRI. Because the conceptof managed care has not yet hit Chinese shores, radiology departmentsremain profit centers whose revenues increase with the numberof procedures they do, and spiral scanning is an excellent wayto boost throughput.

Sentiment among vendors on the ICR exhibit floor indicatedthat CT purchasing in China is beginning to rebound. Scanner salesslumped in recent years after hitting a peak in 1992, when thecentral government began putting the brakes on the economy toprevent it from overheating (SCAN Special Report 11/95). About280 new CT scanners were sold in China in 1995. That number shouldcontinue to climb as the government grants more authority to localhospitals to acquire medical equipment.

In the U.S. and other developed markets, few new scanners aresold without spiral capability. That's not the case in China:One estimate pegs the number of installed spiral scanners in theentire nation at a paltry 50. That may change soon. The new scannersdisplayed by Elscint, Philips, and Toshiba make spiral more accessiblethan ever before.

Elscint's SeleCT/SP was first displayed at last year's RadiologicalSociety of North America meeting, although Elscint has targeteddeveloping markets, rather than the U.S., for the scanner. Thesystem's compact size catches the eye immediately: The entirescanner including control room can fit into 17 square meters.The Israeli vendor saved space by packing the system's electronicsinto the gantry's legs, while SeleCT/SP's power supply is mountedon the rotor assembly.

Elscint also saved space by using a short-geometry architecture,in which the x-ray tube is located closer to the patient thanin other CT scanners. That enabled Elscint to employ a 15-kW generator,which is less powerful than the generators required on long-geometryscanners. Elscint plans to begin shipments to Chinese customersin September.

Eliezer Tokman, vice president and head of Elscint's CT division,hopes that SeleCT/SP can ride a rising wave of interest in spiralCT among Chinese radiologists.

"There is more demand for spiral scanning," Tokmansaid. "Even though there is still a market for non-spiralmachines, (radiologists) are looking for spiral in the mediumand low-end machines."

Elscint saw its CT market share in China jump dramatically,to about 15% of imported scanners, thanks to a massive $20 millionorder by Chinese customers for medical imaging equipment lastyear (SCAN 6/21/95). Financing for the order was arranged betweenIsraeli and Chinese banks under the direction of each country'sgovernment. Elscint therefore was able to approach prospectiveChinese customers with financing and import licenses already available,according to Elscint president and CEO Jonathan Adereth.

The Israeli and Chinese governments are in negotiations overan even larger order that could result in sales of $30 millionfor Elscint this year, Adereth said.

Philips goes mobile. On display in the Philips booth was Tomoscan/EG,a version of the mobile CT scanner developed by Analogic thatPhilips began selling in China in May (SCAN 12/14/94). The scannerwill be offered in two configurations: Tomoscan/EG for stationaryscanning and Tomoscan/M for mobile work. Like SeleCT/SP, the scanneris a compact, lightweight system, weighing less than 1500 pounds.Spiral is available as an option. The system is sold in the U.S.as Tomoscan SR 3200M.

A major selling point of the system is its electrical powerrequirements, according to Paul Young, product specialist in theDutch vendor's Hong Kong subsidiary. The scanner operates on lessthan 1500 watts of common AC or DC power, eliminating the needfor special wiring. That's an attractive feature for rural Chinesehospitals.

"They don't have to spend a lot of money expanding theirelectrical capacity," Young said. "They can save about$50,000 or $60,000. That's a lot of money for Chinese hospitals."

Like Elscint, Philips has benefited from high-level interactionswith the Chinese government. Tomoscan/EG and Tomoscan/M are thenumber-one CT scanners in the mid-range clinical applicationscategory on a list of recommended scanners compiled by the Ministryof Health. Hospitals must buy from the list in order to receivereimbursement, Young said.

The newest entrant in the entry-level spiral CT battle is Toshiba'sXvision/EX scanner, which was seen for the first time at the ICRas part of a panel display in Toshiba's booth. The slip-ring systemis a one-second scanner that can be upgraded to helical. Its 24-kWgenerator is integrated into the scanner gantry, reducing thesystem's size to enable it to be installed in a space as smallas 20 square meters.

Xvision/EX brings helical scanning to an entry-level pricepoint and is the lowest priced helical scanner in the Japanesevendor's price book, according to Toshiba CT product manager DaveEaton. Like Elscint with its Select/SP scanner, Toshiba will focusits sales effort for Xvision/EX on developing markets outsidethe U.S.

"It is only available overseas," Eaton said. "Theopportunities outside the U.S. are much greater at this pointfor this product."

All three vendors are making runs at market share held inChina by Shimadzu, the number-one CT vendor in the country, andGE and Siemens, which are close runners-up, according to formerAgfa executive Richard Howell of the Howell Group, a Gilroy, CA,consulting practice on Asian medical imaging markets. The newscanners exemplify the current attitude toward the entry-levelsegment of designing systems specifically for that market.

"Rather than taking an existing scanner and strippingit down, they are saying, how can we start with a cheaper platform,"Howell said. "The real winners will do that."