January 30, 2014
Poverty is still widespread in India and China, and many uninsured people lack the funds to pay for procedures out-of-pocket. Premiums remain expensive and many insurance providers are reluctant to offer coverage because of the risk involved in paying for poorly regulated healthcare
The Brazilian, Indian, and Chinese markets for spinal implants and BGS continues to be a lucrative orthopedic market that is increasingly becoming the focus of large multinational orthopedic device companies, which is significant considering the state of the global economy in recent years. The global bone grafts and substitutes (BGS) market value will increase steadily over the coming years, rising from almost $2.1 billion in 2013 to approximately $2.7 billion by 2020, at a Compound Annual Growth Rate (CAGR) of 3.8%, according to a new report from research and consulting firm GlobalData.
The latest report states that out of the 10 major markets (10MM: Brazil, China, India, US, France, Germany, Italy, Spain, the UK, Japan), the US will continue to hold the largest BGS market share by 2020, with 65.6%. The country can expect to see its own revenue in this field climb from approximately $1.39 billion to $1.78 billion over the forecast period, at a slightly lower CAGR of 3.5%.
Strong driving forces behind the global BGS market include the rising volumes of spinal fusion and joint reconstruction procedures, along with improved accessibility to the latest-generation BGS products in emerging economies and increased public awareness of bone regeneration achieved through biologics. While these markets have a lot of potential, many factors will continue to hinder procedure volumes. Poverty is still widespread, and many uninsured people lack the funds to pay for procedures out-of-pocket. Premiums remain expensive and many insurance providers are reluctant to offer coverage because of the risk involved in paying for poorly regulated healthcare. As a result, penetration of spinal implant and BGS procedures as well as trauma and reconstructive joint implants procedures will remain low compared to the United States and Europe.
Linda Tian, MSc, GlobalData’s Analyst covering Orthopedic Devices, says: “Furthermore, with an ongoing focus on product innovations among companies, BGS represents one of the most promising areas in the orthopedic industry. Indeed, the motivation to incorporate favorable properties of different materials into an effective bone graft product has led to the manipulation and development of various new composite grafts.
Meanwhile, thanks to an increase in corporate and federal funding behind regenerative medicine, a fast-growing, high-margin opportunity is now being offered in the field of stem cell therapies.
Orthobiologics companies operate in a highly regulated environment. While allografts, bone morphogenetic proteins, demineralized bone matrices (DBMs), synthetic bone substitutes and cell-based matrices are all legally marketed alternatives to autografts, each of these products has a distinct regulatory classification. This calls for different regulatory pathways to be taken in gaining approval prior to marketing.
“Additionally, regulations for human tissue-derived bone graft products, such as DBMs, may vary between European countries, adding an extra complication for companies hoping to achieve effective market penetration,” the analyst concludes. (With Global Data Inputs)