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Orthopaedics:
Market Prospects & Global Competition

Orthopaedics has fared better than many sectors in the economic downturn and expectation now is of improved growth. Time to take stock of the opportunities and challenges ahead!

Growth in the global orthopaedic market is projected to be 8% over the period 2012-17. By 2017, orthopaedic revenues are expected to total US$51.1 billion compared with US$34.7 billion in 2012 - but which companies are driving this growth?

The orthopaedic market has not been immune to the economic downturn that has plagued world economies in recent times. Some of the smaller companies, particularly those at the cutting edge of the market, found themselves short of cash and with little in the way of white knights to help make up the shortfall.

Now things are slowly changing. Private equity has returned to the industry and some of those calls for cash are finally getting answered by investors. It has become noticeable that a number of these investors have been able to successfully sell some of their business holdings with their pride relatively intact. And the reasons why we need these devices are growing ever more present.

The strength of the orthopaedics sector is that the fundamentals remain strong. It is one of the fastest growing sectors in the industry, thanks to the impact of an expanding elderly population and the associated steady rise and diagnosis in musculoskeletal disorders.

Use this new report to easily answer key business questions such as:

• What developments will underpin the 2012-17 CAGR of 8.2% in the artificial joint sector?
• What new products and services has Integra LifeSciences introduced in 2012?
• What is the product and service line of the newly merged DePuy Synthes?
• What are the latest developments in worldwide regulation and how are they affecting the orthopaedic sector?
• Does ConforMIS patented i-fit technology signal progression on the development of bespoke, patient specific implants?
• Which company posted flat sales in the US but grew revenues in Europe and Asia by 10% and 16% respectively in 2011?
• Who is active in the foot and ankle ortho sector and what are their competing products?

Regulation: First Approval – why some companies prefer Europe over the USA

There is increasing concern from manufacturers that access to the world’s largest orthopaedic market is being frustrated by the FDA’s lengthy and costly approval process. Some companies have made conscious efforts to avoid the US market, citing the expense and uncertainty of the FDA process as the reasons. Indeed, it is often seen as a preferred option for US start-ups to find their feet - and their revenues - in the European market. Faced without the possibility of much needed revenue, a massive regulatory bill and a nervy team of investors, companies eyeing the US market are required to sit tight as the FDA goes through its safety and efficacy review processes.

Study shows the contrasts
The contrast in regulatory approaches in Europe could not be clearer. According to a 2010 Stanford University study in the US, entitled “FDA Impact on US Medical Technology Innovation, for a PMAtype product, the time span from the initial contact with the regulatory authority until market launch amounted to 54 months in the US, compared with 11 months in Europe. On average, a market launch in Europe can be realised three years earlier, with significantly lower costs. Financially, it can take a device manufacturer three to five years to get a medical device approved in Japan and China, at a cost of US$3 million or less in each market. In Europe, the time can range from six months to two years and cost around US$2 million. In contrast, getting approval in the US for a medical device can take between two and seven years and cost between US$50 to US$100 million. Time frames differ for those pursuing the 510(k) route to approval, but even here the FDA’s anxieties can be seen in requests for further information after first review: 3 out of 4 applications will now be referred back to the company. The trend, illustrated in the chart below, shows that this is long established.

Percentage of 510(k)s with additional information request on the first FDA review



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