Implant Scare at Tough Time for Cosmetic Surgery Industry

The furor over bursting breast implants in Europe comes at a time when the cosmetic surgery industry there is already facing a difficult year.

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After losing business as the credit crisis hit financing, the European cosmetic surgery industry, the second largest in the world after the US, had picked up again, with a compound annual growth rate (CAGR) of 19 percent, according to market analysis group Frost & Sullivan.

“People’s expectations of how they want to look have risen, so the end user group has expanded,” Arjunvasan Ambigapathy, research analyst at Frost & Sullivan, told CNBC.com.

The scandal over Poly Implant Prothèses (PIP) implants, made in France, which have been inserted into 300,000 women around the world, has put the regulation of the cosmetic surgery market, which is worth around $2.2 billion annually in Europe, at the top of the agenda.

It emerged late last year that PIP, before going bust in 2011, had started making implants with cheap, unauthorized silicone that was more prone to bursting. The European Commission announced Thursday that it is considering an overhaul of its rules around medical devices following the furor.

There is also growing pressure from the British and French governments on clinics which have used the PIP implants to remove them for free.

Regulatory standards are more relaxed in Europe than in the US for non-invasive substances, with prospective treatments only needing a 'Conformite Europeene' (CE) mark – which is easier to get than the full FDA approval required for use in the US.

“Part of the scandal is that a lot of people paid a lot for cheap surgeons and cheap implants making lots of profits. That element of the market must just go,” Nigel Mercer, consultant plastic surgeon and former president of the British Association of Aesthetic Plastic Surgeons (BAAPS), told CNBC.com.

This comes at a time when the industry faces an uncertain couple of years ahead, as financing options at the lower end of the market have dried up and disposable income is being squeezed across income brackets -- even bankers look set for a disappointing bonus season.

“Everyone’s seeing a bit of a lull at the moment,” said Mercer. “By and large, the downward trend came because of the credit crunch.”

There are plenty of variations in the numbers and kinds of procedures across the EU, as you can imagine. There are more cosmetic procedures performed in Italy than in any other European country – perhaps unsurprisingly. Former Prime Minister Silvio Berlusconi has a well-publicized plastic surgery habit and once told reporters it was “a way of showing respect to those who expect you to represent them.” Breast augmentation and blepharoplasty (eyelid surgery) are the most popular procedures there, and breast enhancement was banned for under-18 girls last year after the numbers of teenagers getting them rose dramatically.

France and Switzerland are the most expensive markets, according to Frost, while Spain and Italy are the cheapest outside Eastern Europe, as high numbers of operations make them more competitive.

The decline in financing options for cosmetic surgery has led to younger, poorer women either not undergoing surgery or going abroad, often to Eastern Europe, Thailand or Turkey for operations. Surgeons from these countries often train in the US or Europe and then take their skills back home, according to Frost & Sullivan.

Mercer hopes that the most recent scandal will lead to greater regulation of the market in the UK, which traditionally acts as a sort of halfway house between the US and Europe for new procedures.

“We are much less conservative than France or Germany when it comes to new techniques and trends,” Mercer said.

Expanding waistlines in the UK, which has a higher proportion of obese people than any other European country, have helped make it Europe’s fastest-growing cosmetic surgery market. Liposuction is the most popular surgical cosmetic procedure in the country, according to Frost & Sullivan.