Research Shows Spinal Market Will Grow in Europe Despite Obstacles

Millennium Research Group (MRG) has reported that the European spinal implant market will reach a value of $755 million by 2016. The growth in demand for spinal and other orthopedic implants is due in great part to aging demographics. However, the rate of growth would be higher if not for negative pressure on selling prices and procedure volumes from the ongoing European financial crisis.

Hospitals with budgets squeezed tight have been implementing strategies to keep costs down, and this has and will continue to force prices down in almost every segment of the spinal implant market. According to MRG’s evidence-based predictions, government health agencies will reduce reimbursements, most severely in Italy and Spain, making hospitals pressure manufacturers to reduce prices. There has been an increase in public tenders, where hospitals solicit multiple bids when purchasing spinal implants. Another downward pressure on prices comes from the increasing influence of group purchasing organizations (GPOs). GPOs coordinate the sale of spinal implants through bulk purchases negotiated in long-term contracts, and thus receive substantial discounts.

Reduced hospital budgets also have an effect on the number of patients admitted for largely elective treatments. This effect will again be seen most severely in Italy and Spain. In both countries, hospitals have been forced to reduce staff through attrition and to limit yearly procedures to conserve budgets. In addition, unemployment and growing waiting lists have caused many patients to delay undergoing spinal implant procedures.

Despite the doom and gloom, MRG analyst Daniel Brown still believes the positive growth will outstrip the negative pressure:

“Minimally invasive surgeries have been growing in popularity because of surgeon preference and patient demand,” he said. “This will increase the number of thoracolumbar fusions performed less invasively, in particular lateral lumbar interbody fusions. Quicker patient recovery times and shorter hospital stays offer the potential for cost savings.”

Basic economic principles and history show that competition forces prices down as well. Medtronic has a very large presence in Europe, but now faces Johnson and Johnson which has just folded European orthopedics company Synthes into its subsidiary DePuy Spine. The saturated market is just one more factor in the market value of spinal products.

MRG is a subsidiary of Decision Resources Group, and conducts research and provides intelligence on the medical technology market. The company is based in Toronto, Ontario.