SCAN Special Report

May 22, 1996

European companies try to maintain dominance of global contrastmarketPrice erosion and generic competition top list of concernsProvided they steer a steady course, Schering, Nycomed, and Bracco-- the three European companies that dominate

European companies try to maintain dominance of global contrastmarket

Price erosion and generic competition top list of concerns

Provided they steer a steady course, Schering, Nycomed, and Bracco-- the three European companies that dominate the contrast mediaindustry -- can look forward to slow but steady growth throughthe end of the century. Rising volumes in x-ray contrast agentusage should just about make up for lower prices. The ultrasoundand MRI sectors, yet to take off in the way some industry observershad predicted, should start to pick up as new agents move fromthe R&D laboratory to the market.

But there are pitfalls ahead. Debstabilization awaits the x-raymarket, due to excessive discounting of products that are notnotably different from their competitors, and the threat of competitionfrom generic nonionic agents is on the horizon. In addition, consolidationcould again change the rules of the market if one or more of themain diagnostic imaging players falls victim to the wave of restructuringsweeping over the wider pharmaceutical industry.

Marketline International, a London-based market research company,put the value of the global contrast media market in 1995 at $3.4billion, up 6.5% from the previous year. Since 1993, Japan hasovertaken the U.S. as the largest individual market, worth $1.5billion, or 42.3% of the total.

The value of the European market for nonionic x-ray contrast mediais $600 million, while the value of the MRI contrast market inEurope is $70 million to $80 million, according to Hafslund Nycomedof Oslo, Norway.

The European market is dominated by Nycomed, Schering of Berlin,and Milan-based Bracco, the family-run company in which anotherGerman firm, E. Merck, has a 50% stake. Guerbet of France andMallinckrodt Medical of the U.S. are the final members of theprevailing oligopoly. Schering and Nycomed also dominate the worldmarket. Schering's own figures give it 31% of the world market,and Nycomed 18%, in 1994. Daiichi's 14% share is entirely dueto Japanese sales of the Nycomed product Omnipaque.