Obstacles Ahead for TJR Market

Article preview reprinted Medtech Insight - January 2009

With few new treatment options on the horizon for patients suffering from joint pain associated with hip and knee osteoarthritis, it should come as no surprise that the business of joint replacement is booming and will continue to do so for the foreseeable future.

Obstacles Ahead for TJR Market

Article preview reprinted Medtech Insight - January 2009

For more than half a century, total joint replacement (TJR) has enabled millions of Americans with debilitating arthritic hips and knees to live a relatively normal and pain-free life. Long-term success rates that now approach 90% have made joint replacement a well-accepted treatment modality for restoring mobility and relieving pain in patients with hip and knee osteoarthritis (OA), a degenerative process that results in deterioration of the joint articular cartilage. And, this success has helped expand the potential patient pool. Today, TJR is no longer reserved for the elderly. Younger patients in their mid-40s and 50s whose activity level is hampered by joint pain are actively seeking hip and knee replacements as well, in hopes of being able to maintain an active lifestyle—at all costs.

With few new treatment options on the horizon for patients suffering from joint pain associated with hip and knee OA, it should come as no surprise that the business of joint replacement is booming and will continue to do so for the foreseeable future. Even in the current economic environment where elective joint replacement procedures are likely to slow down, there has not (yet) been a significant impact on implant sales. Most of the major total joint manufacturers—Smith & Nephew PLC's Smith & Nephew Inc. (S&N), Stryker Corp., Zimmer Holdings Inc., Wright Medical Group Inc., Exactech Inc.—presenting at the recent JP Morgan 27th Annual Healthcare Conference reported that they have yet to see a noticeable downturn in unit sales of joint replacement products.

Still, the industry readily admits it is not immune to the global economic crisis. In fact, most believe that a prolonged recession, high unemployment, and higher co-pays are sure to result in patient decisions to delay joint replacement operations. And most agree that this, along with a tightening of hospital capital budgets and pricing pressure, may have a negative impact on the total joint market in the short term. However, over the long haul, the general consensus is that this market will remain strong owing to solid growth in the patient pool. The latter is linked primarily to two ongoing trends: the aging of the population, which is expanding the pool of elderly patients with OA, and the epidemic of obesity, a major contributor to joint degeneration in younger people.

In 2008, the global hip and knee market grew by 11.6% to reach almost $11.7 billion in revenues, with the outside the US (OUS) market outpacing the US market (17.2% OUS versus 7.8% US) in terms of growth. In 2009, sales of hip and knee replacement products are projected to exceed $12 billion.

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Companies mentioned in this article:

Exactech Inc.
Altiva Corp.
ISTO Technologies Inc.
Johnson & Johnson
DePuy Inc.
Smith & Nephew PLC Plus Orthopedics AG Smith & Nephew Inc.
Stryker Corp.
Wright Medical Group Inc.
Zimmer Holdings Inc.
Abbott Spine

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