Spine surgery largely unfazed by recent market challenges

Few medical device markets have demonstrated the kind of staying power — prices, procedure growth, market growth — shown by spine surgical technologies.  The swelling caseload of new patients, the persistent clinical need and the stream of innovations from manufacturers in this arena have enabled growth rates that have not recently been seen in most other device markets.

Of course, the market has been pinched by insurer pushback on some procedures (e.g., fusion when degenerative disc disease is involved), price pressures on some established devices and, in the U.S., regulatory reform that is long in coming.

A definite kind of demand inelasticity exists in spine disorders and trauma that has enabled it to be an area in which manufacturers have been able to succeed despite the capital restrictions and recessionary forces that have plagued markets since at least 2008.

Spine surgery technologies are comprised of the following discrete segments:

  • Posterior Pedicle Screw Fusion Systems
  • Anterior Cervical Plate Systems
  • Anterior Thoracolumbar Plate Systems
  • Anterior Lumbar Interbody Fusion (ALIF) devices
  • Transforaminal Lumbar Interbody Fusion (TLIF) devices
  • Posterior Lumbar Interbody Fusion (PLIF) devices
  • Axial Lumbar Interbody Fusion (AxiaLIF) devices
  • Interspinous Process Spacer (ISP)
  • Cervical Artificial Discs
  • Lumbar Artificial Discs
  • Vertebroplasty
  • Balloon Kyphoplasty
  • Allografts
  • Demineralized Bone Matrix (DBM)
  • Bone Morphogenetic Proteins (BMPs)

Below is an exhibit (drawn from the 2011 MedMarket Diligence worldwide report on spine surgery) illustrating the different growth in spine surgery technology segments.

Source: MedMarket Diligence Report #M520.

Posterior pedicle screw fusion systems currently represent the largest share of the global spine technology market, a dominance that will persist through the forecast period based on its large established base. However, as is evident in the uptake of new spine technologies, there is ample opportunity for participants in all but a few sectors that are declining in absolute or relative terms.

Orthopedic biomaterials worldwide market

Definitions

Biomaterial is an abbreviated form of the term biocompatible material, which can be defined as “a synthetic or natural material used to replace part of a living system or to function in intimate contact with living tissue” . Biomaterials are intended to interface with biological systems; they may be viable or non-viable. Artificial hips, vascular stents, artificial pacemakers and catheters are all made from different biomaterials.

The category of biomaterials now generally includes biomimetic materials – synthetic constructs with compositions and properties similar to biological materials. Calcium hydroxyapatite, used as a coating on artificial hips, is a typical example; it is used as a bone replacement and facilitates attachment of an implant to living bone. The term “orthopaedic biomaterials” applies, clearly, to biomaterials used to replace, augment, heal or otherwise enhance the function of bone which is damaged or deficient as a result of disease or trauma.

The orthopaedic biomaterials field is like a cake that can be cut in various ways; for example by the types of materials used, the different structures involved, and by the clinical uses to which they are put. And of course the business of orthopaedic biomaterials can involve analysis of the market (actual and potential) and of the industry which supplies these materials and the devices of which they are made.

Worldwide Market

The total global value of the medical devices market is estimated to be more than $165 billion in 2006, with annual growth at 5.5%, led by the Americas with annual rates approaching 7%.

Orthopaedic devices are a major contributor to the global medical device market, accounting for almost $26 billion in 2006, and with a growth rate that reflects growth in the medical sector overall.

The current valuation of the orthopaedic biomaterials segment is around $7.4 billion, representing over 17% of the orthopaedic total. It is also estimated that this market segment will grow at over 13% per year, which is more than double the rate for the overall orthopaedics market. At this rate the biomaterials segment will achieve a value of $9.4 billion by 2011.

Growth in the U.S. market is expected to be somewhat faster than in Europe and significantly greater than in the developing world, partly because new biomaterials are relatively expensive and their uptake is related, in general terms, to GDP. Overall, the U.S. market for orthopaedic biomaterials is expected to grow by approximately 12% per annum over the next five years. Below is shown the segmentation of the global market by main regions and countries.

ortho-bio-ww

Source: MedMarket Diligence, Report #M625, "Emerging Trends, Technologies and Opportunities in the Markets for Orthopedic Biomaterials, Worldwide."

Any ranking of the major players in the orthopaedic biomaterials marketplace must take account of the fact that some companies have orthopaedic product offerings other than biomaterials, and/or they are subsidiaries of larger concerns which do not provide detailed breakdowns of revenues. For example, among industry leaders are Genzyme Biosurgery, DePuy and Medtronic Sofamor Danek all of which are subsidiaries, while Smith & Nephew has a range of orthopaedic product offerings not including biomaterials.

Orthopedic biomaterials market growth strongest in U.S.

Growth in the U.S. market for orthopedic biomaterials is expected to be somewhat faster than in Europe and significantly greater than in the developing world, partly because new biomaterials are relatively expensive and their uptake is related, in general terms, to GDP. Newly-emerging technologies such as bone morphogenetic proteins (BMPs) are expected to grow at rates up to 30-35% per annum during the forecast period (2007-2011), although their contribution to the overall orthopaedic biomaterials market will be relatively modest, since they are starting from a small base. Overall, the U.S. market for orthopaedic biomaterials is expected to grow by approximately 12% per annum over the next five years.

The U.S. market is the best-documented of the world’s regional markets for orthopaedic biomaterials, and U.S.-specific data are to be found later in this section, under discussions of the market by surgical procedures and classes of biomaterials.

ortho-biomaterials-pie1

Source:  MedMarket Diligence Report #S625.

 

Although the "other" category is the largest category included in this overall market, and has been included because of both "biomaterials" aspect of these technologies and their clinical utility in orthopedic applications, these products are part of the larger market for sealing, adhesion, hemostasis and prevention of post-surgical adhesions.  (The market for these products are addressed separately in the MedMarket Diligence report #S175, "Worldwide Sealants, Glues and Wound Closure, 2009-2013".)