EDITOR'S COLUMN: Weathering the new device-tax storm
In a Market Focus session titled Medical and Aesthetic Lasers - the Future of Light-Tissue Interaction, presentations at OSA's Conference on Lasers and Electro-Optics (CLEO) 2013 (San Jose, CA; June 9-14, 2013) highlighted market strength in these areas.
In a Market Focus session titled Medical and Aesthetic Lasers–the Future of Light-Tissue Interaction, presentations at OSA's Conference on Lasers and Electro-Optics (CLEO) 2013 (San Jose, CA; June 9-14, 2013) highlighted market strength in these areas. The panel discussion, moderated by Rick Frost, market development manager at optical and laser components maker Oclaro (San Jose, CA), featured three presenters: Michael Karavitis, vice president of R&D for Cutera (Brisbane, CA), maker of light-based medical devices, speaking on the versatility of ultrafast lasers for applications including eye surgery and tattoo removal; Brian Pryor, CEO of LiteCure (Newark, DE), cold laser therapy devices provider, speaking on advances in laser therapy; and Stewart Wilson, vice president of semiconductor technology at cosmetic/aesthetic laser company Palomar Medical (Burlington, MA), speaking on the rise of home-use in addition to professional systems.
This dynamic market segment is certainly one to watch. Market research by Strategies Unlimited shows that while 2012 was a good year for medical lasers, the 2.3 percent tax imposed on medical equipment by the new U.S. healthcare initiative makes 2013 less certain. In fact, Spectranetics Corp. has blamed the new federal tax for its biggest loss in 2½ years—despite record revenue—in Q1 2013. And while there is a chance that the tax could go away or be substantially changed at some point, "that road is much more potholed and twisted then many medical device manufacturers think," says a recent Forbes article.1 So manufacturers should focus on planning instead of hoping.
Meanwhile, within two weeks of the CLEO presentations, Palomar Medical was acquired by rival aesthetic laser maker Cynosure (Westford, MA) in a deal valued at ~$294 million. Indeed, aesthetic laser and light therapies are the fastest-growing areas in the market for cosmetic surgery, facial aesthetics, and medical lasers, according iData Research, whose latest report predicts that the European market for these applications will approach €1.18 billion by 2019. Another recent report by Transparency Market Research, which sought to forecast the medical laser systems market through 2018, noted that growth in this segment is allowing new entrants.
Further market research by Marketdata Enterprises says that the aesthetic laser medical spa market will finish 2013 with $1.94 billion in revenues and reach $3.6 billion by 2016, with 18 percent growth.
While the medical and aesthetic laser market has definitely been dealt a blow by the U.S's new tax, it has considerable resiliency—I'm betting enough.
1. D. Zerbe, "The Medical Device Tax: Stop Dreaming and Start Planning," Forbes, http://onforb.es/18bDVVY (2013).
Editor in Chief