Over the last twenty years, demand for enteral nutrition has risen rapidly. It is estimated that 30 per cent of all patients in Europe are malnourished. Clinical nutrition is divided into parenteral and enteral clinical nutrition. Both types of nutrition are used for patients that cannot meet their nutritional requirements by eating normally, for example, malnutrition.

Enteral feeding is used when a patient cannot get their nutritional requirements orally, but they have an accessible gastrointestinal tract. Enteral feeding becomes a primary method if the gastrointestinal tract is functioning. Nutrition is administered in the form of sip or tube feeds using the gastrointestinal tract and helps fulfil a patient's nutritional requirements. There is general consensus that enteral feeding becomes the preferred route if patients have a functioning and accessible gastrointestinal tract. Enteral feeding is often used for certain conditions such as lung problems or prolonged infections. Enteral feeds have a consumer goods focus, using food-based ingredients.

The enteral feeds market in Europe is in the growth stage, which contrasts with the European enteral nutrition devices market which is mature, nearing saturation. The market leader in Europe for enteral feeds is Royal Numico NV. Norvartis AG and Abbott Laboratories Ltd are second and third respectively. Fresenius Kabi AG is fourth in this market. Nestle is fifth. Worldwide Abbott Laboratories Ltd is number one in this market, because of its presence in the United States. Norvartis AG is second. Abbott Laboratories Ltd, Novartis AG and Royal Numico NV are all strong in Eastern Europe.

The United States and Japan are large and well established nutritional markets. Northern Europe is a large and established market (Germany, the United Kingdom and the Netherlands). Although these countries are not growing as fast, it is important that companies can continue to grow in stable markets. This is where the growth potential is important. The per capita consumption in Germany, UK and Netherlands is the highest. Southern Europe are markets showing strong growth (France, Spain and Italy). They have shown growth over the past three to four years. Emerging markets in Eastern Europe are much smaller, but show higher growth.

Strict reimbursement regulations across the European healthcare spectrum are likely to have a detrimental effect on the uptake of enteral feeds by hospitals. However, the establishment of effective reimbursement, particularly within the rapidly expanding homecare sector, is set to boost adoption levels of enteral feed products.

Reimbursement regulations such as the legislation effected in Germany in October 2005, have reduced the disease/patient conditions that are entitled to receive enteral nutrition on a reimbursable basis (27 disease conditions reduced to 4). As a consequence, the hospital business as well as investments and innovations in this area by manufacturers are being negatively affected.

However, the rising importance of the homecare segment bodes well for enteral feed manufacturers. Due to persistent cost pressures in the hospital segment, there has been a shift from extended hospital treatment towards treatment at home. Also, growing awareness of the importance of therapeutic nutrition has contributed to patients increasingly using enteral nutrition products at home.

Already, enteral feeding at home in the United Kingdom is estimated to be growing annually at between 20.0 to 25.0 per cent. Moroever, the replication of successful reimbursement schemes for homecare management as have been undertaken in France, offer prospects for further market growth.

A high-quality homecare structure is crucial to success and can be developed independently or through partnerships with homecare companies. For this purpose, a network of people is required to deliver the service so that products can be distributed efficiently. Moroever, the existing restraints in the market can be overcome if efforts are made to develop better links with the Association for Parenteral and Enteral Nutrition. This will help enteral feed companies and manufacturers effectively lobby health authorities and support sustained demand for enteral feeds.

As more sophisticated, technologically advanced enteral feeds and devices develop, the shift from parenteral to enteral nutrition will increase penetration levels in hospitals as well as the homecare segment. At the same time, rising awareness of the beneficial role of enteral clinical nutrition in disease treatment and prevention coupled with the provision of improved, consistently high quality clinical data will promote market expansion.

Key priorities are not necessarily to provide additional products, but to provide active ingredients, proof and clinical evidence. Companies have to understand they need to invest in this area. Better quality data will enable more successful registration, more successful reimbursement levels and better defence of existing reimbursement and further convince doctors the role nutrition plays.

Currently, companies are focusing on building strong pipelines with an increased focus on disease-specific solutions, prominently for cancer, diabetes, HIV, Alzheimer's disease and cardiovascular diseases. While general feeds remain important, the demand for enteral feeds for disease-specific solutions is expected to increase with lifestyle changes and an ageing population.

Supported by these trends, the enteral feeds market is expected to grow from $1,020.6 million in 2005 to $1,544.9 million by 2012. Despite the growth opportunities, consistent marketing and product strategies will remain difficult to implement. Systems such as the diagnosis related group (DRG) are present only in some European countries and this requires localised sales and marketing as well as regional production plants. Accordingly, a complex and fragmented market, with different reimbursement schemes and varied medical approaches, poses a major challenge to enteral feed manufacturers.

To succeed, companies need to recognise markets are different and adapt their strategies to different areas, thereby creating a regional orientation. Companies also need to blend their marketing and scientific areas to create opportunities. Strong R&D in this market will be essential to promote credibility and encourage product uptake. Also, to achieve product differentiation, manufacturers need to ensure they understand and effectively position the core product in terms of its nutritional and functional value.

For further information please contact:

Radhika Menon Theodore
Corporate Communications
+91 44 42044541
rmtheodore@frost.com

www.medicaldevices.frost.com