Movers & Shakers with CEO of Draeger Medical -- MEDICA - World Forum for Medicine

Executive Bio Dr. Wolfgang Reim, CEO, Draeger Medical

Since April 2000 - President & CEO of Dräger Medical AG & Co. KGaA Member of the Board of Drägerwerk AG

From 1998 - Head of Business Unit Ultrasound of Siemens Medizintechnik located in Seattle, USA

From 1995 - Head of business unit "Special Products" of Siemens Medizintechnik including the business segments mammography, urology, lithotripsy, surgery, mobile X-ray and the accessories business "Med&More"

From 1990 - Several responsibilities in the Business Unit Magnetic Resonance (MR) Imaging of Siemens Medizintechnik, for example as project manager for

- Innovation project "First open MR"

- Strategy and development project "MR-platform"

- Strategic planning

- Marketing and sales worldwide

From 1987 - Research projects in the Siemens Research and Development Center, Erlangen in the field of mass storage devices

From 1984 - Research and development project at the IBM T.J. Watson Research Labs., New York, and Almaden Research Center, San Jose, in the field of optical storage devices

from Oct. 1975 - Studies of mathematics and physics at the ETH Zuerich. PhD in experimental solid-state physics

12. Nov. 1956 - born in Lohne (Oldenburg), married, 4 children

Movers and Shakers with Dr. Wolfgang Reim, CEO, Draeger Medical

What is the key to Draeger Medical's success?

With the experience of an inventor and market leader in ventilation for more than 110 years Dräger Medical is uniquely able to achieve its three main keys to success:

- Innovation (innovative medical applications and leading edge technology),

- Reliability (highest product quality and application safety) and

- Responsiveness (of our Technical Service and Sales Reps for all requirements of our customers)

offered in a competitive price range and in a customer oriented modularity.

Would you describe for us your vision for the global ventilator markets in the next five years?

As already true for many other medical device markets we will see a further consolidation in the ventilation market. The cost pressure in the health care systems leads to a situation where less and less companies are able to maintain the requested innovation and quality level at an affordable price. Due to the fact that a ventilator is a life supporting system, customers very much distinguish between "in-expensive” and "cheap”. Therefore, my assumption is that we will see some companies going out of business or being acquired by a competitor in the coming years.

With regard to application and innovation we will see more modular ventilators being more frequently used in all areas of a hospital (e.g. Subacute, Regular Ward) or in home care with their functionality adapting to the individual environments they are used in.

These future ventilators will become an integral part of a clinical workstation instead of being an independent device.

Similarly where do you place ventilators in the entire respiratory equipment spectrum in the forthcoming five years?

Ventilators will be used in the complete chain of care: starting with emergency, through all areas of a hospital, up to the home or long-term care environment.

Patient transport and "quality of life” for the patient will be additional key elements for customer satisfaction.

This market was underserved till the turn of the century. What factors fuelled the intense competition as on date, despite the overall medium growth year-on-year?

The use of a ventilator is associated with a certain development level of a health care system. Emerging health care systems have lead to an extensive request for ventilators that were satisfied by various local upcoming competitors.

These days global medical knowledge exchange and standardization combined with more open markets and new regulatory roles lead to a globalization of the competition. Associated with cost pressure in health care systems the intensity of competition will increase dramatically.

The US is the largest, but mature market for mechanical ventilators. The largest segments are replacements but there is a rapid growth in homecare. Could you elaborate on your efforts to managing this shift with internal & external customers?

This shift creates two fundamentally new requirements:

- the modularity or scalability of products for the new areas of use

- a sales structure addressing new customers like providers or subacutes

Modularity or scalability has been addressed by Dräger Medical for many years and will be further enhanced in the existing and new products. A new sales structure has been implemented in the last two years.

How is Draeger Medical planning to manage the diverse geographical market dynamics? Mature, but mega-markets like US, and rapid-growth mini-markets like Taiwan?

Fortunately, the human physiology does not vary significantly world-wide. A supplier with a modular ventilator platform and the ability to handle the complexity of a multi lingual device is capable of adapting the device to the local market requirements. The key is to listen to our customers and to provide what is requested.

How are we warming up to the Brazilian / Chinese manufacturer challenge?

Momentarily we have two effects: Brazilian and Chinese competitors are stepping into the world market and several world market leaders are entering the Brazilian and Chinese market. So, this is a very challenging situation not only for the other suppliers.
Latest manufacturing technologies allow suppliers to produce ventilators at a very competitive cost position all over the place. The differentiation valued by the customer is the experience in the interaction of a human body with a technical device, incorporated in various design details and the algorithms. Software plays a central role.

What innovations / future developments can investors & consumers expect from Draeger Medical ?

Dräger Medical will

- further enhance the modularity in ventilators to provide the customer with products tailored to their individual needs.

- broaden the offer of clinical decision support and expert systems.

- Further drive the integration of the ventilator into clinical workstations thus enabling the physician to draw more accurate conclusions to enhance the clinical outcome.

What survival, or rather, leadership challenges do ventilator manufacturers face in the near future?

The globalization of competition, decision support/expert systems and customer added value due to system integration will be the strongest challenges for the coming years.