Orthopedic Devices Market to Grow at a CAGR of 7.6% from 2010-2017

Thursday 8 March 2012, Amsterdam

The report provides market landscape, competitive landscape and market trends information on ten orthopedic devices market categories – Joint reconstruction, spinal surgery, orthobiologics, trauma fixation, arthroscopy, orthopedic braces and supports, orthopedic prosthetics, cranio maxillofacial fixation (CMF), orthopedic accessories, orthopedic reamers. The report provides comprehensive information on the key trends affecting these categories, and key analytical content on the market dynamics. The report also reviews the competitive landscape with major acquisitions and mergers in the last five years and a detailed analysis of the pipeline products in each category.

Orthopedic Devices Market to Grow at a CAGR of 7.6% from 2010-2017

The global orthopedic devices market is forecast to reach a value of $61.3 billion by 2017 from a market value of $36.7 billion in 2010 at a CAGR of 7.6%. Emerging markets will provide the most growth for orthopedic device companies in the near future. The US and European markets will suffer from low consumer confidence due to the debt crisis following the global financial crisis of 2008. In addition, many governments are enacting healthcare reforms to reduce budget deficits. This additional pressure to reduce government deficits and increase taxes on corporations wil significantly reduce profits for medical device companies. However, new products that target minimally invasive surgery for orthopedic patients and trauma fixation will be key drivers for the market. As the product pipeline and market share of the orthopedic devices industry will both decline, the industry could face consolidation.

Minimally Invasive Surgeries to Drive New Technologies Market for Orthopedic Devices

Minimally invasive surgery provides positive patient outcomes and is fast becoming the most popular choice for orthopedic surgeons globally. In some areas, such as knee arthroscopy, minimally invasive procedures are fairly common. However in others, such as spine surgery, this type of surgery is relatively new. According to surgeons, the trend towards minimally invasive surgery is a positive development in orthopedics because these procedures lead to less blood loss and damage to tissue when compared to traditional orthopedic surgical procedures.

As healthcare costs become the target of government budget reductions in developed countries, the adoption of minimally invasive procedures will increase. In the future, insurance companies will look favorably on minimally invasive procedures in terms of reimbursement due to the low cost of hospital stays after this procedure. However, in order for minimally invasive surgeries to become more prevalent there must be extensive surgeon training for the techniques required. Industry sponsored training sessions and workshops for minimally invasive surgery will therefore become more prevalent in the near future.

Orthopedic Devices Market Set for Consolidation in the Near Future

Significant changes have been undertaken to regulations, reimbursement policies and the taxing of medical device companies as a result of healthcare reforms and the weak economic environment. This has led to poor growth prospects for the orthopedic devices industry. Companies are therefore actively seeking consolidations in order to counter the effects of changes to the regulatory and reimbursement environment in the orthopedic devices industry. For example, Synthes Inc., a Swiss medical device company, was recently acquired in first quarter of 2011 by Johnson & Johnson in a $21.3 billion deal. Synthes’s board recognized challenges for growth in the orthopedics devices market and engaged in a selling process that eventually led to the $21.3 billion deal with Johnson and Johnson. The increasing focus on controlling costs by hospitals is leading to new interest and could create opportunities for the development of cheaper products by low cost orthopedic device companies.

Different market forces in the orthopedic devices industry, such as more aggressive bargaining by increasingly budget controlled hospitals and the slow growth of key products, have raised expectations on device companies to reduce costs. Therefore, in the near future, consolidations in the orthopedic devices industry are expected to increase.

Johnson & Johnson Set To Be Key Company in Orthopedic Devices Market

The global orthopedic devices market is dominated by large medical device companies such as DePuy, Synthes, Stryker, Zimmer Holdings, Smith & Nephew and Medtronic. These companies together hold more than 60% of market share in the global orthopedic devices market. Decreasing profit margins and pressure to launch new products has led to consolidation. For example, in 2011 DePuy acquired Synthes. Furthermore, increasing competition from local companies with low cost products has led to an increased focus on biomaterials and orthobiologics, meaning that these products could hold the key to growth in the orthopedic devices industry.