12.05.07
Growth Factors
During the recent Orthopedic Design & Technology Conference and Exhibition, a speaker during a panel discussion, referring to the orthopedic business, told the audience: “I can’t imagine a better industry or better opportunity for growth.” That sentiment was echoed by numerous speakers throughout the two-day event (see page 54). There’s no doubt that the orthopedic industry is still in growth mode and seems as if it will continue to be for some time based on a number of estimates.
Anyone who reads this page on a regular basis may have noticed that I’m a big fan of industry facts and figures, particularly forecasts. While such predictions are by no means a guarantee of market performance—positive or negative—this kind of detailed analysis can provide a roadmap for myriad decision-making in various disciplines within the orthopedic market.
Perhaps companies are trying to decide which sectors offer worthwhile expansion opportunities. Small joint? Trauma? It may be that a company is trying to explain slowing sales for a particular product line. Maybe a magazine editor is looking for the next hot technology to cover. And, of course, what better time to take a little stock than the end of the year?
According to the Freedonia Group, a research firm in Cleveland, OH, the demand for orthopedic implants is forecast to exceed $19 billion in 2011, up 8.8% annually from 2006. Bone cement, based on the availability of new, high value-added formulations and breadth of applications served, will record the fastest gains, according to the group’s research. Tissue and spinal implants also will post strong growth in demand as advances in fusion, fixation and neurological stimulation technologies promote their increasing use in the treatment of spinal and various other orthopedic conditions.
Yet another recent report, this one from the Millennium Research Group in Waltham, MA, showed that the small-joint market might fuel a lot of industry expansion. In its US Markets for Small-Joint Devices 2007 report, analysis revealed that the shoulder implant market, for example, valued at almost $260 million in 2007, is expected to more than double to $540 million by 2012. Despite obstacles in this market, growth will be largely driven by the reverse shoulder implant, a new technology that more surgeons are expected to offer in the coming years, according to researchers.
Forecasts such as these certainly are cause for cautious optimism. But as anyone in the medical device industry can attest, success hinges on more than a willing marketplace. A stricter regulatory climate or new reimbursement policy can dramatically change the playing field, and firms must be prepared. (See “Orthopedic Settlements Set a New Tone for the Industry” on page 18.) Undoubtedly, 2008 will bring with it new challenges, but with numbers like these, there’s even more cause for New Year celebration.