Consolidation has increased vertical integration and helped safeguard profit
Los Angeles, CA (PRWEB) November 30, 2012
Whether for delivering anesthesia or nutrients, the Intravenous (IV) Solution Manufacturing industry provides hospitals with an array of IV solutions. As a growing industry, IV manufacturing has performed well through the recession, with growth slowing but remaining positive during 2008. “Because the industry relies mainly on downstream demand from hospitals, the number of people with health insurance plays a critical role in determining demand for IV solutions,” says IBISWorld industry analyst Josh McBee. “When unemployment spiked during the recession and people lost their employer-provided health benefits, demand slowed; however, the often-necessary need for medical treatments helps protect the industry against economy-wide slumps.” Given this resilience and the steady growth of hospital demand, IBISWorld expects industry revenue to increase at an annualized rate of 2.6% during the five years to 2012.
The Intravenous (IV) Solution Manufacturing industry is estimated to be highly concentrated, with companies like Baxter International Inc., Hospira Inc. and B. Braun leading the industry. “Consolidation among these top players has increased vertical integration and helped safeguard the industry's profit against rising purchase costs in the form of plastic prices,” says McBee. As these companies grow larger, their vertical integration increases, thereby lowering the per-unit costs of production.” In turn, these cost savings can be passed onto the consumer in the form of lower prices. The price control exerted by the industry's leaders has restricted the entrance of new firms into the industry.
Looking ahead, there are several favorable conditions expected to benefit IV solutions manufacturers. Most importantly, forthcoming changes to the nation's healthcare system under the Patient Protection and Affordable Care Act of 2010 are anticipated to increase the number of insured Americans during the next five years. Ultimately, 32 million previously uninsured individuals are forecast to gain coverage by 2019. This factor will reduce the number of uninsured patients that hospitals treat, decreasing uncollectible payments. This trend and an overall increase in the number of hospital visits will help support demand for IV solutions. For more information, visit IBISWorld’s Intravenous (IV) Solution Manufacturing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Companies in this industry are primarily engaged in manufacturing substances that may be infused directly into a vein. Intravenous (IV) solutions may be used to correct electrolyte imbalances, to deliver medications, for blood transfusion or as fluid replacement. Solutions specifically for animals are excluded.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.