August 09, 2012
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Report: U.S. orthopedic extremity device market to reach $4.2 billion by 2016

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The U.S. orthopedic extremity device market will grow at a moderate rate to reach a total value of more than $4.2 billion by 2016, according to a report recently released by the Millennium Research Group.

Part of the reason for the increase, according to a Millennium Research Group (MRG) news release, is the relatively untapped nature of the orthopedic extremity device market. The scope of the report on this market includes devices designed to treat hands, wrists, elbows, shoulders, feet and ankles. Breakdowns within these categories include product types, procedure types and materials, among others. More mature markets, such as hip and knee, the release noted, are fairly saturated — and in response, manufacturers have been investing heavily in the extremities market.

The orthopedics extremity market is also the setting for an increase in merger and acquisition activity. According to the release, orthopedic manufacturers, in the effort to maintain their share in large-joint markets, have been engaging in more of this activity and further driving growth.

The most prominent recent example of this, according to MRG, was Johnson & Johnson’s acquisition of Synthes, which closed in June.

“[Johnson & Johnson]’s purchase of Synthes will, with DePuy, create the undisputed leader in what is an otherwise fragmented and competitive market,” MRG analyst and report author Mashkur Reza stated in the release. “Despite the sale of DePuy’s trauma unit to Biomet, the combined company will attain market leadership in the orthopedic extremity markets — but this market has a number of other strong competitors, including Arthrex, Tornier and Smith & Nephew, all of which are capable of responding with their own acquisitions, [research and development] investments and marketing strategy changes.”

Patient and surgeon demand is another factor, according to the release, with growth in the population of those aged 50 years or older and increasingly active aging populations. Also noted in the release, the incidence rate of sports injuries in the younger population is growing. Obesity, osteoarthritis and osteoporosis are also a factor, as these conditions contribute to extremity injuries requiring surgical treatment. Manufacturers have seized on this, according to the release, increasing their marketing to raise awareness for available treatments.

The continued adoption of innovative, premium-priced devices is another significant market driver, the MRG reported, citing the example of reverse shoulder implants — devices made to treat patient pools that were previously untreatable with surgery. Such implants, the group expects, will continue to be strongly adopted through 2016, with other premium-priced devices — such as biocomposite anchors and anatomic plates and screws.

Surgeon specialization will likely play a role as well, according to the report.

“The U.S. orthopedic extremity device market will also continue to be driven by increased surgeon specialization in the small joints, which will further spur procedure volume expansion in these anatomies,” the authors wrote.

While the recent recession and its impact still have some impact on pricing, the authors found these pressures are not as influential on the extremity device market as they are on the large-joint markets. This will factor in to the steady revenue expansion MRG is predicting during the forecast period.

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