Market Research Report
US Orthopedic Biomaterials Market - 2011-2021
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|Published||Content info||288 Pages
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|US Orthopedic Biomaterials Market - 2011-2021|
|Published: January 1, 2015||Content info: 288 Pages||
The U.S. orthopedic biomaterials market will undergo increasing growth through 2021, resulting in a market value of nearly $3.9 billion by that year.
The U.S. orthopedic biomaterials market includes bone graft substitutes, growth factors, orthopedic stem cells, cell therapy, hyaluronic acid viscosupplementation, cartilage repair and machined bone allografts. The fastest growing segments involve stem cells, namely the segments for stem cell bone grafts and concentrated bone marrow. The products within these markets offer the greatest regenerative potential for healing bone.
Growth factors and spinal machined bone allografts represented the only decreasing markets in 2014, but the growth factor market will start to increase again by 2017. The markets for growth factors, hyaluronic acid viscosupplementation and cartilage repair will see accelerating growth over the forecast period. Overall, if regulatory barriers can be overcome, there will be much potential for technological development and product introduction.
The bone graft substitute market will trend away from allografts and towards the more lucrative demineralized bone matrix and synthetic grafts. This market will grow at a 3.4% CAGR through 2021.
The bone graft substitute market consists of allograft, demineralized bone matrix and synthetic materials. Bone grafts are used in a variety of indications including spinal fusion, trauma, large joint reconstruction, foot reconstruction, as well as craniomaxillofacial and oncological applications.
The bone graft substitute market competes with both the growth factor market, which is currently only comprises INFUSE®, and the stem cell graft market. Due to the declining usage of INFUSE®, the use of bone graft substitute use has increased. The rise of cell therapy products, including platelet-rich-plasma and bone marrow concentrate, has also aided the growth of the bone graft substitute market, especially in the segments for demineralized bone matrices and synthetic grafts. Platelet-rich plasma provides growth factors when a graft is soaked in it; bone marrow concentrate provides stem cells. This complementary use allows bone graft substitutes to better compete with the growth factors and stem cell grafts.
While allografts are already considered a commodity product, the commodification process is occurring for demineralized bone grafts as well. Pricing pressure thus exists across all segments, including the segment for including the more expensive synthetic grafts.
The orthopedic growth factor market has been declining since 2010; however, the market was still valued at nearly $372 million in 2014.
This market is declining because of safety concerns over Medtronic's INFUSE® growth factor graft. A number of lawsuits have also been raised that have negatively affected public opinion of the product. INFUSE® was initially met with great success; for this reason, the product came to be used for unapproved indications. The market now recedes back to a size reflective of its approved indications; it will settle and see growth again by 2017.
The decline in this market has notably prompted the market growth for alternative grafts such as demineralized bone matrices, synthetics and stem cell grafts. Nevertheless, as INFUSE® remains the only growth factor product, there will remain a solid interest in the product until alternatives are developed. Counteracting such development, however, is the capacity of a bone graft to be soaked with platelet-rich plasma, thereby providing the graft with growth factors such as bone morphogenetic protein (BMP).
The buzz over orthopedic stem cells is reflected in that segment's rapid growth. In 2014 alone, the orthopedic stem cell market grew by more than 17%.
Bone repair is about osteoconduction, osteoinduction and osteogenesis. Stem cell grafts offer a complete solution in that they provide all three: scaffolding, signaling and innate stem cells capable of developing into bone. In cases where assured bone repair is required, such as with elderly patients undergoing a lumbar or cervical fusion, the best options may indeed be stem cell grafts.
Because development and FDA approval costs are so high, stem cell products feature premium pricing. On average, pricing is over $2,000 more than a demineralized or synthetic graft, and over $3,000 more than a typical mineralized allograft. This pricing will prevent the usage of stem cells for indications necessitating a large amount of graft, such as with trauma, hip or oncology applications.
Currently, stem cell products are only considered to be used for lumbar and cervical spinal procedures. If prices were to fall, the stem cell market may see increasingly rapid growth as the number of feasible indications grows.
The cell therapy market features segments for both platelet-rich plasma and bone marrow concentrate, with the latter projected to experience a rapid 11.6% CAGR in the number of treatments.
The orthopedic cell therapy market grew very slightly in 2014 due to ASP decreases for both the plateletrich plasma and bone marrow concentrate segments. The platelet-rich plasma segment previously experienced rapid ASP declines due to smaller volume products and from competition due to Arthrex's low cost ACP® system. A similar trend is occurring within the bone marrow concentrate segment, where prices will continue to drop as they near the $1,000 price point.
Platelet-rich plasma is mostly utilized as an injection, not for soaking bone graft. Injectable treatments are used in wound repair, sports medicine and a growing number of plastic surgeries. Nearly 60% of bone marrow concentrate is used for spinal indications.
Collectively, the cell therapy market is growing for two reasons. First, INFUSE® use is declining. Second, there is increasing complementary use of cell therapy products in the growing demineralized and synthetic bone graft markets.
As the five injection segment was cannibalized by the three injection segment, now the three injection segment is giving way to the single injection segment. The single injection treatment segment will be the largest in this market by 2020.
The hyaluronic acid viscosupplementation market consists of injections which provide pain relief for osteoarthritis of the knee. The treatments were first developed to involve five injections before three injection treatments came about. Most recently, single injection treatments were developed in 2009.
Each treatment occurs once a week. If pain relief can be achieved with products that require fewer trips to the doctor, then such a product would presumably be preferred. This is largely why three injection, and more recently single injection, treatments have come to dominate the market.
However, some patients do not respond as well to single injection treatments. Side effects such as inflammation or stiffness can occur. Furthermore, some patients do not find pain relief without multiple injections. Despite the market's shift to single injection products, there will be a demand for multi injection products.
The three injection segment will remain larger than the single injection segment up until 2020.
Growth of the cartilage repair market is limited by the efficacy and price of microfracture procedures. Segments for emerging technologies, such as that of microfracture adjunct products, are expected to see double-digit growth.
The use of allograft or cartilage implants only accounted for just over 6% of all cartilage repair procedures in 2014. The efficacy of a cartilage repair technique is always compared to the success of a microfracture procedure, which provides reasonable relief and is cheap to perform. A cartilage repair implant, which is likely to feature a high price to cover development costs, must justify the premium pricing with sufficiently superior results. This price premium is why most cartilage repair segments are growing at a slow rate.
However, one exception is the microfracture adjunct market. Instead of supplanting microfracture, products from this market are to improve results, while only marginally increasing procedural cost. The only such product on the market in the U.S. currently is BioCartilage®. Another option to enhance microfracture is DeNovo®, but this product is six times more expensive than BioCartilage® as it is sourced from juvenile cartilage and is described as having 10x the chondrocyte density of adult tissue. Many cartilage products are in development, but will need to overcome the value that microfracture provides.
The spinal machined bone allograft market has been declining with the rise of minimally invasive and motion preservation options. This market declined to just over $293 million in 2014.
The spinal machined bone allograft market consists of segments for spinal fusion of the lumbar region performed from an anterior, posterior or transforaminal approach, as well as spinal fusion of the cervical region of the spine. Machined bone allografts compete directly with the usage of PEEK and metal interbody devices. However, a declining interest in spinal fusion is putting the market under pressure.
Machined bone allograft segments are experiencing pricing pressures for all techniques, resulting in ASP declines across the board. The indications for spinal fusion have increased from scoliosis and disc degeneration, but now spinal fusion is being seen as a less than favorable option especially when revision rates and complications prevent it from being a complete solution. Less invasive options and physical therapy to stave off spinal fusion are pushing the market down. This trend is a common feature for the orthopedic market in general where joint fusion is often superseded by replacement as technology advances sufficiently.
The niche nature of many segments within the overall orthopedic biomaterials market mean that they are often fairly concentrated, with an average Herfindahl Index of 0.36.
Despite the concentration of some individual markets, the overall orthopedic biomaterials market has a great deal of participating competitors, with only Medtronic and Genzyme holding a double-digit shares of the market. The average number of competitors per market, excluding the bone graft substitute market, is just larger than 5, again indicating the concentrated nature of the biomaterials market.
Medtronic led the overall market because of its performance in bone graft substitutes, machined bone allografts and a monopoly of the growth factor market. Despite the rapid decline of the growth factor market in recent years, its respectable size ensures a strong position for Medtronic.
Genzyme follows Medtronic in market share due to its sole presence in the large hyaluronic acid market, but its share in the growing single injection segment may be at risk from newer entrants, especially the DePuy Synthes marketed Monovisc™ from Anika Therapeutics.
Participants in the stem cell graft market will likely experience an increase in share as that market grows rapidly over the forecast period. In contrast, those in the shrinking machined bone allograft market will see declining shares of the overall orthopedic biomaterials market.