The medical laser arena is both large and diverse, encompassing a range of application areas and covering treatment from diagnosis to therapy. Here we explore trends in some of those areas and discuss how they might affect the market for medical lasers. Discretionary spending takes a hit No discussion of the market today can proceed without considering the effects of the crises that have roiled the US and the world economies. The subprime mortgage calamity, the ensuing credit crunch and skyrocketing unemployment have not just shaken consumer confidence, they have left it a limp mess lying on the kitchen floor, convulsing with sobs and bemoaning its very existence. In times such as these, people look to tighten their budgets as much as possible. Not surprisingly, items that fall under the rubric of “discretionary spending” are typically the first to go. With respect to the medical laser market, this means that consumers will put off elective procedures that are not imperative to their immediate well-being, such as the successful laser-assisted in situ keratomileusis (lasik) surgery. The correlation between the economic environment and laser vision correction volume trends is well established. And in November, at the most recent meeting of the American Academy of Ophthalmology, talk was of little else. The gathering economic storm during 2008 clearly touched the laser vision correction market, affecting a number of ophthalmic companies, including Advanced Medical Optics Inc. and various service providers. The market for lasers used in ophthalmology may be illustrative of what is happening in the medical laser market in general: Demand for lasers used in elective procedures such as laser vision correction is down, while that for surgical lasers remains relatively stable. Shown is Coherent Inc.’s recently introduced Genesis 577 laser, which was designed for photocoagulation treatment of age-related macular degeneration. “People will always get sick …” If there is any stability in applications served by the medical laser market, it is most likely to be found in surgical applications where the procedures cannot wait until the economy turns around – and in any event are often reimbursed by Medicare and other insurance providers. An illustrative example, again from the field of ophthalmology: Cataract surgery has fared better during the recession than its elective cousin, laser vision correction, with procedures and product sales seeing growth in the single digits, according to a recent report. Coherent Inc. recently introduced a yellow laser based on optically pumped diode technology and designed for photocoagulation treatment of age-related macular degeneration, or AMD. AMD, which results from bleeding in the retina, is the primary cause of vision loss and blindness in the West. In 2004, the National Eye Institute reported that 1.75 million people in the US were affected by the disease. That number is expected to increase to 3 million by 2020. Photocoagulation – essentially, cauterization of leaking blood vessels around the retina – appeared about 30 years ago. Ophthalmic surgeons initially used a 514-nm argon-ion laser to perform the procedure but eventually switched to the 532-nm wavelength from an Nd:YAG laser. More recently, they determined that the 561-nm wavelength from an Nd:YAG laser would work even better because the oxyhemoglobin absorption spectrum has a strong peak at 577 nm. Introduced about a year and a half ago, Coherent’s latest optically pumped semiconductor laser emits at exactly 577 nm. As a result, there is less patient discomfort than from those lasers that do not precisely hit the absorption peak. The laser is, “from our market perspective,” doing well, said Matthias Schulze, Coherent’s marketing director of OEM components and instrumentation, noting that a number of manufacturers at the American Academy of Ophthalmology meeting were showing instruments that incorporated the laser. He added, however, that this does not necessarily reflect a sharp upswing in the market but rather some combination of the market holding steady and the laser grabbing a bit of market share. Bright spots in elective procedures? There may be some good news from a corner of the cosmetic surgery industry. Although the industry generally is witnessing the same sorts of declines as the laser vision correction industry – with consumers cutting back on discretionary, big-ticket procedures – demand for non- and minimally invasive procedures, including hair restoration, photorejuvenation with intense pulsed light and laser body contouring, appear to have held steady and, possibly, even increased. In a survey conducted by the American Society of Plastic Surgeons, 62 percent of respondents reported a drop in the number of cosmetic procedures performed overall in the first half of 2008, with respect to the first half of 2007. At the same time, 73 percent reported higher, or at least stable, demand for minimally invasive procedures. Observers cite a host of reasons for the latter, upward trend. Not surprisingly, financial considerations are at the top of the list. “It appears more consumers are choosing the less invasive cosmetic procedures,” said Dr. Richard D’Amico, president of the American Society of Plastic Surgeons, “to give [themselves] a boost or to buy time if they need to postpone a more costly invasive surgical procedure because of the economic downturn.” Furthermore, patients increasingly are aware of the risks associated with cosmetic procedures such as liposuction – especially following the high-profile death of rapper Kanye West’s mother from surgical complications during this procedure – and are seeking noninvasive alternatives that are safer and more efficient and, for good measure, less expensive. Bauman Medical Group, a cosmetic therapy practice in Boca Raton, Fla., recently installed a laser scanner made by Erchonia Medical of McKinney, Texas, for use during liposuction and the noninvasive “Zerona” body-contouring procedure. The latter procedure, in particular, uses a low-level laser to remove fat and help shape the body without invasive surgery. There also may be cultural forces at play. It’s no secret that Americans place high value on physical beauty, and although cosmetic procedures generally are elective, there may be a greater sense of urgency associated with having them done – even, if not especially, during tough economic times (see sidebar below). So, while consumers are seeking less expensive alternatives to conventional cosmetic procedures, many may not be ready to give up the idea altogether. The market for lasers in aesthetic laser treatment It would be fatuous to suggest that any market is immune to the effects of the recession, especially one associated with elective procedures. But medical device companies might see opportunity in the shift toward non- and minimally invasive cosmetic procedures. For example, Gaurav Rohatgi of Continuum, a design and innovation consultancy based in Newton, Mass., recently worked with a startup that developed an aesthetic laser treatment targeting a typically superficial infection, and he doesn’t see this trend slowing. What types of lasers might find the most use in such devices is still open to debate. “Medical lasers are still pretty specialized in aesthetic treatment applications,” he said. “Our approach was to tailor the design for the specific market our client was trying to sell into.” That experience might offer some clues, however. First, it was important that the device be designed for application by trained technicians rather than by specialists. Every state has regulations as to who can operate a laser and how much training is required, depending on the class of the laser. Most surgical lasers can be operated only by physicians, for example. “When you consider all the costs that come with that,” Rohatgi said, “it kind of limits that market.” Using lasers that can be run by technicians reduces the total treatment costs, so devices incorporating these lasers are more likely to appeal to those purchasing them. “Revenue models for physicians have a lot to do with how a laser is going to perform in the market,” he noted. Also, consumers are becoming savvier about the long-term effects of particular procedures, including the possible detrimental effects of ultraviolet light. For this reason, Rohatgi and the startup for which he was consulting avoided using UV in the device in question. Can the recession be good? Yes, for some According to a recent survey, 73 percent of women in the work force believe that appearance and youthful looks play a role in finding a job or in succeeding in the workplace – especially during the economic downturn. Of those who responded, 13 percent said they would consider having a cosmetic procedure to make themselves more competitive in the job market, while a surprising 3 percent said they already had. The study quoted an insurance broker who recently had a chemical peel and fat transfers from her abdomen to her face. “When you look good, you feel confident,” she said. “That gives me a competitive edge and something my clients have come to expect from me.” Whatever cultural forces underlie and shape these sentiments – and however one feels about them – it’s hard to deny that they can exist in the workplace, and that concerns about job security might therefore compel consumers to explore various cosmetic procedures, including non- and minimally invasive aesthetic laser treatments.