Systems vs Pieces and Parts and the Future of Orthopedics

Hips: Worldwide sales of hip implants, these two analyst groups wrote, rose between 2.7% and 3.0% in the June quarter. That compares to sales growth in 2018 and 2017 of 1.6%-1.8%, 1.6%-1.7%, respectively.

Both Wells Fargo and Cantor Fitzgerald report that global hip sales grew faster than U.S. sales for the first half of 2019.

The largest supplier of hip implants and instruments remains Zimmer Biomet with an estimated global market share of about 33%. Second largest supplier is DePuy at approximately 25%, followed by Stryker. Together, Zimmer, DePuy and Stryker account for approximately 81% of all hip implant and instrument sales in the world. Of the top three, Stryker is, again, reporting the fastest sales growth rate and is gaining share on market leader Zimmer Biomet.

Pricing: Both Wells Fargo and Cantor Fitzgerald track knee and hip implant pricing trends and both noted that prices are likely to continue to decline at 2-3% year-over-year rates for the rest of 2019. However, for Stryker and DePuy, pricing pressures improved slightly this year compared to 2018.

Looking Ahead

While the business of providing musculoskeletal implants, instruments, biologics, imaging, diagnostics and services remains the largest sector in medicine—measured by numbers of patients if not also revenues—it is also a slow yet steady growth industry dealing with significant regulatory oversight, expensive R&D and long-term pricing pressures.

How does such an industry meet its paramount objective of advancing the expensive science of treating patients with chronic, multifactorial diseases and the resulting break down of hundreds of millions of musculoskeletal systems?

The answer may well lie more in productivity tools (robotics, navigation and, eventually, predictive Big Data based algorithms) than in revolutionary or disruptive implants or instruments.

These are interesting times, indeed.