High-tech love affair feeds growth of CT and MRI markets in U.S.

May 9, 2001

The glamour technologies of imaging, MRI and CT, turned in stellar performances in 2000, pushing revenues in each market close to or beyond record levels. MRI sales in the U.S. topped more than a billion dollars for the second year in a row. Driving the

The glamour technologies of imaging, MRI and CT, turned in stellar performances in 2000, pushing revenues in each market close to or beyond record levels. MRI sales in the U.S. topped more than a billion dollars for the second year in a row. Driving the market is an apparently insatiable appetite for high-field equipment.

CT sales in the U.S. last year leaped to nearly $800 million, a 17% jump over the previous year and a nearly 50% revenue jump from 1997. Multislice scanners led this charge, rekindling an interest among prospective customers in the purchase of million-dollar-plus products.

Procedure growth is driving both modalities, industry experts agree. New applications are stoking demand for growth, but applications in the works have set these two modalities on a collision course, as CT and MRI both stake claims to cardiovascular imaging.

MR angiography probably arrived first in the vascular camp with peripheral and run-off studies enhanced by short-lived contrast agents. The rapid growth of multislice CT, however, threatens to stunt MRI growth. These high-speed scanners are making up for the deficiencies seen in single-slice CT angio, delivering high-resolution vascular images.

“CTA is a slam dunk for physicians now,” said Michael Sims, director of CT at Marconi Medical Systems. “It’s an economic as a well as a patient care driver. With CTA you can be sure you’re sending only positive cases to x-ray angiography (for angioplasty), which means profitability goes up in the x-ray angio suite because reimbursements are much higher for treatment than for diagnostic work.”

But MRA might battle CT angio for those patients in the near future, with the appearance of contrast agents that persist for several minutes in the bloodstream. This potential capability has raised questions about which of these modalities will ultimately succeed in vascular imaging.

In cardiac imaging, neither modality is particularly effective right now, but both offer enormous possibilities. Through an algorithmic sleight of hand achieved by summing data sets at different points in the cardiac cycle, multislice scanners can deliver medically valuable coronary angiograms. High-speed MRI is also making progress, notably in the use of sensitivity encoding technology that promises substantial gains in speed or resolution.

In neuroimaging, both CT and MRI are staking claims in the assessment of suspected stroke victims. Functional MRI may even prove useful in the differential diagnosis of dementia, although CT might reassert its power as part of hybrid CT/PET systems.

This jockeying for position is, for the most part, something to worry about in the future. MRI revenues surged last year and show no sign of letting up. Ditto for CT scanners. Pushing these sales is the strong demand for high-performance systems.

“In the U.S., there seems to be a real trend toward completely featured 1.5-tesla (MRI) systems with very powerful gradients equipped with many software options,” said Jacques J. Coumans, Ph.D., MRI global marketing director for Phillips. “Two or three years ago that was not necessarily so discernible.”

The Achilles’ heel of the MRI market is the open segment. Weakening demand for these systems may indicate that the imaging center marketplace is nearing saturation. It may also be the result of indecision among prospective customers, who debate whether to buy low-field open systems or the new higher field products, such as GE’s Signa OpenSpeed or Hitachi’s Altaire.

“A lot of people are looking forward to see what is going to happen in higher field open MRI,” said Sheldon Schaffer, vice president and general manager for MRI at Hitachi Medical. “I think those questions will probably get answered in the first half of 2001.”

Only GE and Hitachi have higher field open systems on the market. Others, including Siemens, Philips, and Marconi, expect to bring their own such products to market by the end of this year or in the first half of 2002. They hope the commercial introduction of new products will persuade practitioners with aging low-field units to convert to the more powerful ones to increase image quality and throughput.

Meanwhile, the industry is experiencing a teeter-totter effect, whereby sales of high-field units rise as the sales of low-field opens drop. This is the reason for the mixed picture that unit sales evoke. Overall, the number of MRI scanners sold in the U.S. went down last year, even though revenues went up. In 2000, the industry sold 878 new units to U.S. customers compared with 928 the year before, according to industry estimates. Most of these new units (67%) were high-field products: 569 versus 276.

This country’s ongoing infatuation with high technology is apparent in CT as well. The growth in U.S. revenues to $783 million in 2000 compared with $670 million in 1999 was driven by sales of the most expensive CT scanners, as unit sales edged up only slightly to 1112 last year compared with 1060 the year before.

Practitioners are embracing multislice scanners with unprecedented zeal. Spiral CT took about a decade to win a majority of the installed base. Multislice scanners, which entered routine production in 1998, might reach that point in half the time.

Vendors have been very aggressive in crafting lower cost multislice scanners, thereby allowing budget-constrained customers to buy into the technology. These scanners may offer two slices rather than four, or their gantries may complete a rotation a quarter- or half-second slower than the premium product. But they all deliver the clinical advantages of multislice, according to John Zimmer, vice president of marketing for Toshiba America Medical Systems.

“What inhibited helical scanning was that venders underpowered the units to get their prices down,” Zimmer said. “That’s not the case for multislice, where you get big tubes, big generators, and a lot of capability.”

The popularity of this scanner type may also be due to a newly empowered patient population. Many patients are willing to dig into their own pockets to pay for exams not covered by insurance such as coronary calcium scoring, a possible indicator of risk for sudden adverse cardiac events. In the future, screening tests such as virtual colonoscopy and pulmonary exams for cancer might become fashionable.

“There is this great wellness approach by people who used to smoke cigarettes and want to know if they have cancer or people whose fathers died from a heart attack and want to know if they have coronary heart disease,” said Bill Radaj, CT Americas marketing manager for GE Medical Systems. “Physicians don’t have to worry about reimbursement. All they have to worry about is if their patients have a platinum or gold card.”

The expanding capabilities of multislice scanning provide the means to deliver this information quickly, and clinical applications will likely grow in the future, as vendors develop faster CTs with better resolution. Along the way, vendors have been careful to promise customers that their multislice platforms will be upgradable to future configurations. This promise seems to have assuaged fears of obsolescence and has fueled customers’ desires to join the multislice revolution, promising the CT industry an unprecedented year of revenues in 2001.

Prospects for MRI are similarly bright, at least as long as high-field sales hold up. Some questions remain, however, as to how long that will be. The market for high-field MRI systems may be nearing saturation.

The percentage of replacement sales, defined as the installation of a unit in place of an existing one, is edging up. Industry sources believe that replacements account for between 40% and 70% of U.S. sales, raising concerns that when demand for replacements dries up, so will the MRI market.

The possibility of high-field saturation might be counterbalanced, however, by growth in the sale of systems optimized for cardiological applications or the nearer term expected growth of 3-tesla systems. GE and Siemens are ramping up production of 3-tesla units, and Marconi and Philips expect to weigh in by the end of next year with their own very high field products.