Changing lifestyles of an aging baby boomer population will drive strong growth in the global orthopedic devices market as this segment has chosen to lead increasingly active lives. The incidences of back pain and joint-related disorders are higher in this demographic group, which is evident from the fact that around 40 percent of people diagnosed with arthritis in the United States are over the age of 65. Ongoing technological development as a result of sustained research and development (R&D) is another important market driver.
New analysis from Frost & Sullivan (http://www.financialservices.frost.com), World Orthopedic Devices Market - Investment Analysis and Growth Opportunities, reveals that this market earned revenues of $25.3 billion in 2006 and expects to grow at a compound annual growth rate (CAGR) of 13.4 percent during the period 2006-2011.
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“There is considerable R&D activity in the orthopedic devices market, with pure-play participants recording an increase of 18.4 percent in R&D expenditure for the period 2002-2006,” says Frost & Sullivan Financial Analyst Sheetal Rajani. “This clearly indicates a favorable growth trend in the future as increasing R&D expenditure implies continued technological innovation.”
Globally, Asia represents the most promising market for orthopedic device manufacturers, as it enjoys a fundamental advantage in terms of its huge potential customer base.
While more than 50 percent of the world’s ‘graying’ population lives in Asia, the region accounts for only around 10 percent of the global orthopedic devices market. Within this, Japan accounts for a majority of the revenues, representing more than 60 percent of the Asia Pacific market. Thus, the potential for growth in relatively under-penetrated countries such as China and India is immense.
“Although the lack of affordability has not allowed countries such as China and India to realize their full potential, this is expected to change in the future due to encouraging reforms taking place in these countries’ health insurance markets,” says Rajani.
However, healthcare budgetary constraints and resulting reimbursement pressures worldwide are creating significant pricing pressures. Since fixed costs represent a substantial part of the orthopedic device manufacturer’s expenditure, little flexibility is left in their pricing structures.
Against such a backdrop, strategic consolidation could help companies achieve much-needed economies of scale. Acquisitions expect to play a vital role in helping companies further reduce their fixed costs components and promote greater consolidation in this space.
Among the various market segments, the spinal surgery segment in the past was one of the fastest growing and expects to demonstrate one of the strongest growth rates in the future as well. Growing incidences of back pain and technological advancements such as less invasive approaches and non-fusion technologies are encouraging patients to opt for surgery. Furthermore, this creates a flourishing market for spinal implants — which expects to grow at a CAGR of 16 percent for the period 2006-2011.
World Orthopedic Devices Market - Investment Analysis and Growth Opportunities is part of the Financial Services Medical Devices Subscription Growth Partnership Services program, which also includes research in the following: World Medical Devices Industry: Investment Analysis and Growth Opportunities, North American Cardiovascular Devices Market: Investment Analysis and Growth Opportunities, European Cardiology Devices Market: Investment Analysis and Growth Opportunities, North American Healthcare Equipment Financing and Leasing Market - Investment Analysis and Growth Opportunities, and North American Homecare Market - Investment Analysis and Growth Opportunities. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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