NN&I - July 2010
Business Subscribe to our free eNewsletter at www.nephronline.comJuly 2010 Nephrology News & Issues 15Drugmakers may fear the next gener -ic. Physicians may fear the effects of health care reform. And the dialysis industry may fear the new bundled payment system.But despite all those worries, the health care sector continues to grow, and projections for the business side of the renal community appear to show prosperous times ahead, accord-ing to two recent studies. The first, published by GlobalData on May 18, showed that the global renal dialysis equipment market is forecast to grow at a compounded annual rate of 7%, and by 2016 will reach $8.9 billion, up from $5.5 billion in 2009. The dialysis accessories, outpatient hemodialysis machines, and acute care-based continuous renal replace-ment therapy machines market were worth $3.7 billion in 2009. The second report, released May 27 by Global Industry Analysts Inc., showed that revenue from kidney dial-ysis centers in the United States would grow 4% to 6% annually, and the num- Compiled by Thomas Keatingber of U.S. dialysis patients is expected to grow by around 5% every year. "People really have no choice," said Renal Advantage Inc. CEO Michael D. Klein. "As the incident rate of kid-ney disease keeps growing, people need dialysis to live and really have no choice if they want to live." These hard facts have spawned the reports, which both say that the mar -ket will be driven through 2016 by the increasing prevalence of diabetes and hypertension, a rapidly aging popula-tion, and a shortage of kidney donors for transplant. Klein said his investors are not concerned with the recession, and that Renal Advantagethe third-largest for-profit dialysis provider in the United States, behind Fresenius Medical Care AG and DaVita Inc.has doubled in size in the past five years. Klein thinks Renal Advantage will double in size again by 2016. "We plan to grow through strate-gic acquisitions, new centers in new locations in new markets," Klein said. As reported in NN&I's annual renal Mar Cor Purification buys Purity Water Company of San AntonioCantel Medical Corp.'s subsidiary Mar Cor Purification bought Texas-based Purity Water Company of San Antonio Inc. June 2.Purity Water, which had pre-acquisition annual revenues of approximately $3 million, provides water treatment equipment and services for laboratory, industri-al, medical, pharmaceutical, and semiconductor applications to customers in Texas and neighbor -ing states. The acquisition will better help Mar Cor serve its regional custom-er base, as well as further expand its business into commercial and industrial segments, said Mar Cor President Curt Weitnauer. "We expect to drive incremental growth with the addition of Mar Cor's capabilities and broad portfolio of products and services," he said.Reports show growth of renal market through 2016Fresenius Medical Care buys Asia Renal CareFresenius Medical Care AG & Co. KGaA, announced May 25 that it signed a sales and purchase agreement with Bumrungrad International Ltd. to acquire dialysis service provider Asia Renal Care Ltd.Founded in 1997, Asia Renal Care has since become the second-largest provider of dialysis and related servic-es in the Asia-Pacific region (behind Fresenius Medical Care). Asia Renal Care operates more than 100 clin-ics throughout Asia, treating about 6,200 patients. In 2007 Asia Renal Care became a wholly owned subsidiary of Bumrungrad International Ltd., an associate company of Bumrungrad Hospital PCL. The transaction will be subject to antitrust notification in Taiwan and Singapore. If approved and closed, the acquired operations will add approxi -mately $80 million in annual revenue to Fresenius and be accretive to earn-ings in the first year after closing of the transaction. More than 680,000 patients require dialysis treatment in the Pacific region and the number of dialysis patients is forecast to grow to more than 1 mil-lion within the next five years, accord-ing to Fresenius. provider rankings (page 45), Renal Advantage serves 12,000 patients in 149 facilities across 19 states. In the past year, they have opened six new clinics and acquired seven others. Klein said the plan is to open 12 new locations every year. Klein said he does not think that Renal Advantage is a candidate to be acquired, but predicts that some smaller providers will not be able to handle the cost per treatment under the new bundled payment system. "We're preparing the best we can for the bundle," he said, "but I think it's going to be difficult for some smaller providers to remain independent." Business0710_6.indd 15 6/16/10 5:19:58 PM
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