Most medical device markets follow a life cycle that includes emergence, adoption, competitor proliferation, and eventual maturation encompassing consolidation, price reduction, procedure volume erosion and, ultimately, obsolescence.
One of the very intriguing aspects about a whole sector of medical devices — spine surgery devices — is that, while it follows this pattern, it demonstrates sort of a prolonged maturation in which procedure volume growth persists only at the grudging erosion of prices such that the aggregate market in revenue terms continues to grow.
Looking at an example of this, the German artificial discs market, one can see that unit volume continues to grow along with revenue growth (at a 2011-2020 CAGR of better than 9%) supported by relatively modest price reductions during this period.
Source: “Worldwide Spine Surgery: Products, Technologies, Markets and Opportunities, 2010-2020”, Report #M520, MedMarket Diligence, LLC.
Spine surgery has as one of its most persistent characteristics a tendency to sustain growth in product sales (even in the face of cost pressures) due to the inelastic nature of demand for treatments for the conditions (e.g., degenerative disc disease) and patient demographics supporting spine surgery markets. The lack of effective therapeutic alternatives to spine surgery, in the face of continued strong demand even in spite of cost reduction efforts, simply serves to provide attractive market growth for current/hopeful competitors.