Smaller Players Find Opportunity In Large Joints

Article preview from Medtech Insight - May, 2012

Five companies control 95% of the market in hip and knee implants, creating an unfriendly environment for newcomers trying to grab a piece of their own. But economic and regulatory pressures are making things increasingly uncomfortable for the market leaders, giving hope to companies pushing new technologies and sales techniques.

Smaller Players Find Opportunity In Large Joints

Article preview from Medtech Insight - May, 2012

The business of selling hip and knee implants is dominated by five principal players – Biomet Inc., DePuy Orthopaedics Inc., Smith & Nephew PLC, Stryker Corp. and Zimmer Holdings Inc. Historically, their grips have been impossible to break as surgeons have become comfortable working with not only the implants but also the sales people who represent them. But the past three years haven’t been the easiest for hip and knee implant manufacturers. (See "Total Joint Market: Slowly Recovering" — Medtech Insight, May 2011.) The settlement of the investigations by the US Department of Justice loosened the ties between surgeons and companies. Meanwhile, the bid to reform the US health care system in a post-recession economy has squeezed the system across-the-board. A market as large as hip and knee couldn’t escape without taking a significant hit. Hip and knee sales went from registering strong, single-digit annual growth (6% and 9%, respectively, in 2008) to actually shrinking beginning in 2009, with analysts predicting no comeback in the next few years.

Such disruptions create opportunities for newcomers with innovative approaches. A handful of companies are pushing new technologies – such as robotics and customized implants – as well as different business models – including a plan to get rid of the orthopedic sales rep – to grab a larger piece of $11 billion industry in the next few years. US-based multinationals, which are finding better growth opportunities outside the US, also will be called on to defend their home turf as companies from outside the US, including Asia, gain FDA approval to sell their implants. No doubt, the times are challenging for all of health care, but the Big Five are notoriously tough to beat.

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Medtech Insight  newsletter provides insights into the technology and market developments (devices, instrumentation, biomaterials, gene therapy, tissue engineering, etc) impacting a wide range of  surgical and non-surgical clinical practices.