A company can monopolize 90% of the global market for some high-end equipment.
This is not a dream whisper, but an objective fact that really exists. According to public information, Johnson & Johnson's Ethicon company previously monopolized 90% of the global ultrasonic knife market. (Note: The ultrasonic knife discussed in this article is an ultrasonic hemostatic knife)
Johnson & Johnson's annual report shows that ultrasonic knife products are an important engine for its rapid growth. Relying on ultrasound knife products, its surgical business revenue has grown from $2.854 billion in 2004 to $9.501 billion in 2019.
Ultrasound knife: a changemaker in minimally invasive surgery
In the 1920s, mechanical scalpels still dominated surgery. However, after the emergence of high-frequency electric knife, it has been widely used in clinical practice with its characteristics of fast cutting speed, good hemostasis effect, simple operation, safety and convenience, and wide indications.
In the 1990s, with the large-scale application of high-frequency electric knives, their pain points were gradually concerned, such as causing thermal damage, excessive tissue damage, and intraoperative smoke. At this time, as an innovative minimally invasive surgical instrument, the ultrasound knife was highly recognized clinically and quickly promoted to the world.
Ultrasonic knives are mainly used for cutting and closing blood vessels in biological tissues. An expert said: "The ultrasonic knife is to convert electrical energy into mechanical energy, through the ultrasonic frequency generator to make the metal knife head oscillate at a speed of 55,000 times per second, after the high-speed oscillation of the knife head contacts the tissue, the water molecules in the tissue vaporize, protein hydrogen bond breakage, cell disintegration, tissue is cut or coagulated, to achieve blood vessel closure, and finally achieve the purpose of cutting tissue and hemostasis." ”
Based on the advantages of principle, the ultrasonic knife has the characteristics of less bleeding, minimal thermal damage, less damage to surrounding tissues, fast postoperative recovery, no tissue burns, and no smoke in the application. Compared with high-frequency electric knives, ultrasonic knives have no current through the human body during surgery, and can be used for patients with implanted metal objects in the body, and have a wider range of applications.
From the original plastic surgery, to today's gynecology, urology, thoracic surgery, hepatobiliary surgery, gastrointestinal surgery, head and neck surgery, otolaryngology, pediatric surgery... Ultrasound knife has been widely used in more than a dozen departments, covering dozens of surgical procedures such as uterine fibroid surgery, abdominal aortic aneurysm repair, rectal tumor resection surgery, appendix surgery, hemorrhoid resection, adrenectomy and so on. In addition, ultrasonic knife companies are also continuing to innovate, and ultrasonic bone knives have long been used in orthopedics.
Just as high-frequency electric knives have subverted mechanical scalpels in some areas, ultrasonic knives have also subverted high-frequency electric knives in specific areas.
According to data released by Frost & Sullivan, the global ultrasonic knife market size has grown from $2.32 billion in 2016 to $2.87 billion in 2020 and is expected to reach $4.63 billion in 2025.
Image source: Pylt Medical Prospectus
In China, the ultrasonic knife market (factory price calculation) increased from 1.02 billion yuan in 2016 to 2.01 billion yuan in 2020, and is expected to reach 6.11 billion yuan in 2025. Among them, the growth rate of the domestic brand market is obvious, and the compound annual growth rate of 2016-2020 is as high as 102.1%.
However, as of now, Johnson & Johnson still occupies more than 80% of the domestic ultrasonic knife market. At the same time, on a global scale, Johnson & Johnson previously monopolized about 90% of the global ultrasound knife market, and although other companies are currently competing, they still dominate more than 60% of the global market.
For the ultrasonic knife market, which has a penetration rate of 27% in the United States and only 1.1% penetration in China, how did Johnson & Johnson break through from zero and monopolize the market step by step? And how to stabilize the war situation and ensure a high market share? What are the references of Chinese ultrasonic knife companies to this and achieve a breakthrough?
Why Johnson & Johnson was able to occupy
More than 90% of the global ultrasonic knife market?
After nearly 30 years of development, ultrasonic knives have become the mainstream instruments in minimally invasive surgery around the world. However, in the early stage of the development of the industry, ultrasonic knives are still a blank market.
Ultrasonic knives appeared in the 1950s and were first used in the field of plastic surgery and beauty in the 1980s. In 1992, two clinical experts in the United States used Ultrasonic's ultrasound knife products for laparoscopic surgery for the first time, so that ultrasonic knives began to enter the broader surgical market. They said after the operation: "This use of ultrasound knife for surgery, the patient has less bleeding, obvious hemostasis effect, ultrasonic knife damage to the surrounding tissue is small, and the patient recovers quickly after surgery." ”
Based on the clinical advantages of ultrasound knives, Etchicon Endo-Surgery, a subsidiary of Johnson & Johnson, acquired Ultrasonic Knife Company in 1995 and began to vigorously promote ultrasound knives, train doctors and optimize iterative ultrasound knife products.
Promotion of ultrasonic knives
In terms of promoting ultrasound knives, Johnson & Johnson conducts clinical trials around the world and publishes clinical data in important journals to form a greater impact. At the same time, Johnson & Johnson also invited well-known experts to participate in academic conferences, publish papers, and give lectures on the clinical data and application advantages of ultrasound knives.
For example, in September 2000, a study supported by Johnson & Johnson was presented at the annual meeting of the Department of Otolaryngology, Head and Neck Surgery in the United States, concluding that the use of ultrasound knives for tonsillectomy significantly reduced pain and recovery time in patients. In addition, there is also "Comparative Analysis of Ultrasonic Knife Surgery and Traditional Surgery in Gastrectomy and Lymphadectomy", published in the International Journal of Oncology Surgery, which concluded that ultrasound knife surgery is safer and more effective, and the trauma is small, the hemostasis effect is good, and the postoperative complications are fewer.
It is worth mentioning that these studies have not only been presented at important academic conferences, but also widely disseminated on medical websites and media platforms such as Medscape. In addition to these two studies, Johnson & Johnson has also supported more such studies to promote the promotion of ultrasound knives.
Johnson & Johnson also works with renowned experts from top hospitals to expand the scope of ultrasound knives. From gastrointestinal surgery, thoracic surgery, hepatobiliary surgery, to urology, gynecology, and then to otolaryngology, cardiovascular surgery, and general surgery, Johnson & Johnson cooperates with well-known experts in various departments, relying on the advantages of ultrasound knife, to promote it to related departments and apply it to a variety of surgical procedures. For example, in early 2000, Johnson & Johnson introduced ultrasound knives to cardiovascular surgery for coronary radial artery bypass grafting. The ultrasonic knife also quickly gained the favor of cardiovascular surgeons with its good hemostasis effect.
In addition, Johnson & Johnson also relies on its extensive channels to promote ultrasonic knife products to the global market. For example, Johnson & Johnson was the first to open up the U.S. and European markets, and in 1997, it introduced ultrasonic knife products to China. China's ultrasonic knives started from scratch, were persistently cultivated by Johnson & Johnson, and have reached a market size of 1.02 billion yuan by 2016.
Based on Johnson & Johnson's vigorous promotion, Johnson & Johnson's ultrasonic knife products have increased from the first application in 1992 to 14 million times worldwide in 2012. From 0 to 14 million, from 1995 to 2012, Johnson & Johnson took nearly 20 years to bring ultrasonic knife products to the world. Today, Johnson & Johnson is still insisting on promoting ultrasound knives through academic conferences and other means.
Support physician training
Johnson & Johnson monopolizes the ultrasound knife market, and there is another important reason: that is, to provide doctors with Johnson & Johnson ultrasonic knife products for technical training. Clinicians learn and apply ultrasound knives from the first time, and use Johnson & Johnson ultrasonic knife products, which greatly cultivates their habits of use. Although habit formation is difficult, changing habits often comes at a greater cost.
According to the data, Johnson & Johnson has established the School of Medical Professional Education, integrating 24 professional education colleges and multiple online education platforms around the world to help doctors, nurses and other professionals improve their skills. At the same time, Johnson & Johnson also promotes ultrasound knife products to medical schools and other places, so that medical students can learn and apply Johnson & Johnson ultrasonic knives.
At present, Johnson & Johnson Medical Professional Education Institute is distributed in 24 cities around the world, covering the United States, Britain, Germany, Switzerland, Spain, Russia, China, India, Japan, South Korea, Singapore, Australia, Brazil and other countries. With the help of medical professional education colleges around the world and medical schools around the world, Johnson & Johnson trains ultrasonic knife technology for clinicians and medical students, cultivates a steady stream of talents for the field of ultrasound knife, and continues to promote the development of ultrasound knife surgery.
Keep products innovative and optimized
In addition to its channel advantages, Johnson & Johnson is also leading the way in technology.
In terms of hosts, Johnson & Johnson launched the first generation of ultrasonic knife host system in 1995, and released the new Gen 300 ultrasonic knife host system in 2001. Compared to the first generation, the Gen 300 can be activated or turned off via the foot pedal, has a touch screen function, and can be controlled by the touch screen button to control standby, testing and activation.
In 2011, Johnson & Johnson introduced gen 11, the third generation of the ultrasonic knife host system, which is an intelligent host that not only integrates ultrasound and RF energy, but also has more convenient touch screen control, and its size is reduced, reducing the area occupied by the operating room.
In 2012, Johnson & Johnson optimized the Gen 11 ultrasonic knife host system to add adaptive technology that automatically adjusts the frequency to improve cutting efficiency and reduce surgical time depending on the tissue parts that the ultrasonic knife head contacts. Clinical data show that compared with ultrasonic knives without adaptive technology, products with this technology have 23% less thermal damage and 21% shorter cutting time, which has obvious advantages.
In terms of knife heads, Johnson & Johnson continues to introduce different shapes and structures of knife heads for different surgeries. For example, it introduces linear and curved ultrasonic scissor heads that can be used to cut hemostasis, separation, and grasping tissue. The style of the knife head is also diverse, such as sharp surface, blunt surface, plane, etc., which can meet the needs of coagulation and cutting of different tissues in surgery. Through continuous optimization and innovation, the indications for its knife head are also expanding, from the coagulation of 3mm blood vessels to the coagulation of 5mm blood vessels, and then to the coagulation of 7mm blood vessels; from tonsillarectomy to neck lymphatic dissection to radical breast cancer resection, its knife head can be applied to more and more surgical procedures with the host system.
In addition, Johnson & Johnson has also continuously optimized the ultrasonic knife handle, from the scissor handle in 1992, to the gun handle in 1999, and then to the controllable gun handle in 2005, gradually optimizing the use experience of the handle.
In general, Johnson & Johnson educates the market through continuous product innovation and optimization, doctor training, and vigorous promotion, and monopolizes most of the world's ultrasonic knife market with its leading edge.
Many enterprises entered the market,
How does Johnson & Johnson maintain market share?
Seeing the broad market prospects of ultrasonic knives, multinational machinery companies such as Medtronic and Olympus have also successively launched ultrasonic knife products and launched commercial marketing. But how does Johnson & Johnson currently maintain most of its market share?
Industry insiders believe: "Johnson & Johnson can occupy the vast majority of the market in the fierce market competition, there are many reasons. ”
First, Johnson & Johnson insisted on cultivating the market and cultivated the use habits of clinicians, so that other companies need to pay a greater price in the competition to reverse the use habits of doctors.
Second, Johnson & Johnson's products have certain leading and clinical advantages, and have been widely recognized by doctors. At the same time, it has endoscopy, sutures and other supporting instruments and consumables, which can provide hospitals with complete surgical solutions, facilitate hospital procurement, and reduce the possibility of surgical risks caused by different brand products.
Third, because Johnson & Johnson's service team and sales team are strong, they can respond to and feedback the needs of clinicians in a timely manner. This stems from johnson and johnson in the field of ultrasound knife to achieve huge profits, and rely on financial advantages to create an excellent service team and sales team, to achieve the "service team expansion - better service doctors - doctor recognition - market expansion" cycle. Other companies have limited investment in this field due to the obstruction of ultrasonic knife sales, and the number of sales teams is less than Johnson & Johnson's sales team, which limits their service capabilities.
As a result, Johnson & Johnson firmly dominates the majority of the global ultrasound knife market based on its leading edge, long-term market cultivation, complete surgical solution portfolio, and excellent sales and service team. Unless there is a disruptive technology in the field of ultrasonic knives, and Johnson & Johnson does not pay attention to this technology, Johnson & Johnson will occupy the leading position in the field of ultrasonic knives for a long time.
How to break through domestic innovative enterprises?
In China, the minimally invasive surgery market is growing rapidly. At factory price, the ultrasonic knife market increased from 1.02 billion yuan in 2016 to 2.01 billion yuan in 2020, and the compound annual growth rate of domestic brands in 2016-2020 was as high as 102.1%.
In addition, in 2019, the number of minimally invasive surgical procedures per million population in the United States was 16,877, and the penetration rate of minimally invasive surgical procedures reached 80.1%. In China, there are only 8514 units per million people, and the penetration rate is 38.1%. Compared with developed countries such as the United States, there is still great room for development in the field of minimally invasive surgery in mainland China.
Since the field of minimally invasive surgery is an important blue ocean market, many domestic innovative enterprises such as Yisi Medical, Jianshi Medical, Peierte, Sumai Medical, Shige Saisi, Sainuo Micro Medical have entered the field. However, these innovative enterprises also face the problem of breaking the monopoly of imported products.
In terms of market breakthroughs, most innovative enterprises plan to seize the market with the national collection policy and the wave of equipment going to sea. Specifically, the state is promoting the localization of medical devices, and domestic innovative enterprises are expected to take this opportunity to win the bid and accelerate the market. For example, in December 2021, innovative enterprises such as Houkai Medical, Sainuo Micro Medical, and Shige Saisi won the bid for the 16 provincial alliance ultrasonic knife heads led by Guangdong. The procurement scale and results of this collection cover more than 50% of the Chinese market and population. From the perspective of the number of product sales, domestic innovative enterprises have achieved remarkable results in collection and procurement.
For another example, many enterprises such as Jianshi Medical, Yisi Medical, sainuo Micro Medical have launched a globalization strategy and are selling domestic medical devices to the world. In terms of global markets, they cut into overseas markets and seize the market share of multinational enterprises through product differentiation advantages, reasonable prices, and strategic overseas planning.
It is worth mentioning that in terms of products, most companies choose to learn from Johnson & Johnson and carry out platform layout. For example, Yisi Medical provides a full range of minimally invasive surgical product portfolios for tumors; Jianshi Medical provides complete minimally invasive surgical solutions; Peierte provides minimally invasive surgical products such as staplers, ultrasonic knives, sutures, and hernia repair products; Sagasys enters from ultrasound knives and lays out intelligent minimally invasive surgery and surgical robots; Sainuo Micromedicine focuses on minimally invasive surgical surgery and tumor interventional treatment, building three major technical platforms of surgical vision, surgical energy and tumor ablation... Through the platform layout, domestic innovative enterprises can provide complete solutions for hospitals.
In general, with the help of the national collection policy, the trend of localization and the wave of equipment going to sea, domestic innovative machinery companies are expected to quickly realize the localization of the field of ultrasonic knives and launch a strategic attack on the global market. However, they also need to face the three mountains of Johnson & Johnson, Medtronic and Olympus, and also solve many problems such as product usage habits and service system construction.
In the future, the ultrasonic knife market will be exciting, we will wait and see.
*Cover image source: 123rf