NEMA figures show x-ray equipment market in flux

December 28, 1994

Second half of 1994 brings some relief, howeverReports from the National Electrical Manufacturers Associationthat x-ray modalities experienced a 20% to 30% drop in equipmentorders in the first half of 1994 sent shivers through some

Second half of 1994 brings some relief, however

Reports from the National Electrical Manufacturers Associationthat x-ray modalities experienced a 20% to 30% drop in equipmentorders in the first half of 1994 sent shivers through some vendors,particularly those whose figures reflected the NEMA projections.Some of those companies are now breathing easier, however, asthe x-ray market appears to be in rebound.

"So far in this second half (with one quarter completed),we are over 75% of what our total projected half-year x-ray saleswould be," said David Wiser, director of sales and marketingfor North America at Shimadzu Medical Systems in Torrance, CA.

This apparent rebound is also being seen at InfiMed of Liverpool,NY, which supplies video systems and image processor R/F systemsto vendors such as Acoma, Continental X-Ray and Picker International.

InfiMed reports that orders for its imaging chain componentsdropped in the first half of 1994 but now appear to be on theway up.

"It's a little too early to tell for sure, but it seemslike the third quarter was much better than the first or secondquarters," said Kevin C. Oakley, vice president of salesand marketing at InfiMed. "We are optimistic about the fourthquarter, because we have a significant backlog of orders."

Oakley was not shaken by the apparent shortfall in sales earlierin 1994.He points to a similar drop that occurred in the firsthalf of last year, only to be counterbalanced by a rise in thesecond half.

"The dip this year was not as bad as in the first half of1993 and the recovery in the second half appears stronger thanlast year," he said.

Oakley attributed the fluctuation to the psychological effectof health-care reform efforts on Capitol Hill, which made hospitaladministrators postpone purchasing decisions.

Some companies, however, appear immune to quarterly fluctuations.Picker International of Cleveland, for example, reports virtuallyno variation in sales this calendar year. Steven J. Gray, Pickermarketing manager for the x-ray division, said he questions theNEMA figures.

Similarly, OEC Medical Systems of Salt Lake City reports a virtuallyflat C-arm market in 1994 compared to last year, with no significantchange in either direction. Larry Harrawood, vice president ofmarketing at OEC, said the company, which is a market leader inthe mobile C-arm industry, hasn't taken a hit.

There are other possible explanations why some companies showfluctuations in x-ray sales while others do not. One reason maybe that certain companies, such as Picker, have long-term nationalsales contracts with large hospital chains and alliances. Othercompanies that are more regionally or locally oriented and donot have such national purchase agreements might be more susceptibleto delayed decisions. These companies would also be vulnerableto regional fluctuations.

There are indications, however, that the x-ray market is beingimpacted by slow demand. Pricing has fallen, but not catastrophically,said Picker's Gray. Wiser said the price on R/F systems has dropped$25,000 to $50,000 below what customers were paying a year ortwo ago.

Several vendors have also introduced stripped-down versions ofR/F systems, selling for as low as $150,000. One of the vendorsoffering these systems is Shimadzu. Although Picker reportedlyis not feeling a pinch in x-ray sales, the company may soon beginoffering such a system, Gray said.

Oakley of InfiMed volunteers that the packaging of this strippedR/F system is primarily a reaction to incursions being made bythe refurbished/used equipment vendors into traditionally newequipment sales.

"Some of the manufacturers are getting down and dirty withtheir pricing, getting prices close to what the remanufacturersare selling their systems for," he said.

InfiMed, which sells components to both the makers of new equipmentand refurbishers, has seen orders from refurbishers jump about10% overall this year.

"Part of the reason is that money is tight," Oakleysaid. "The installed base is taking existing systems andupgrading them."

Nycomed signs contrast deal with VHANycomed has signed a three-yearcontract to produce MRI contrast media for health-care networkVHA. Under the terms of the agreement, VHA will distribute Omniscanunder its own private label, VHA+PLUS. More than 50 medical-surgical,laboratory and pharmaceutical products from national manufacturersalready carry the VHA+PLUS label.

VHA stated that the deal will provide savings to organizationsin its network while adding considerably to Nycomed's share ofthe U.S. contrast media market. The annual MRI contrast marketwithin the VHA network of 1000 health-care organizations is about$23 million. Nycomed, of New York, was formed when Norwegian contrastsupplier Hafslund Nycomed bought the diagnostic imaging businessof Sterling Winthrop (SCAN 6/13/94).