By Payam Moghimi-Bidhendi and Kamran Zamanian, Ph.D, iData Research Inc
The U.S. orthopedic biomaterials market has become an attractive alternative for patients looking to avoid surgical implantation of permanent devices or hardware. Orthopedic surgeries are generally complicated, multi-stage procedures that result in longer recovery times and increased blood loss. Biomaterials that are currently offered in the U.S. market aim to treat orthopedic conditions or complications through regeneration as opposed to surgery. In particular, bone marrow concentrates, cellular allografts and synthetics are promising agents for the treatment of orthopedic disorders. Hence, the treatments that are experiencing the fastest growth in the U.S. orthopedic biomaterials market coincide with these three segments. Furthermore, within other moderate growth areas of the market, such as the hyaluronic acid (HA) segment, consumer preference for single-injection treatments is growing, mainly due to convenience of one injection in comparison to the traditional five-injection treatments. Market demand in the U.S. is driven by convenience and product efficacy rather than price.
A particular trend in the U.S. orthopedic biomaterials market is the shift in competitive strategy in order to penetrate high growth segments which may include cellular allografts, cell therapy, synthetic bone graft substitutes and the single-injection hyaluronic acid market. Competitors in low or decreasing growth segments are looking outside their traditional space by using existing products from other countries. For instance, Bioventus is the leader in the five-injection hyaluronic acid market but it has shifted towards the fast growing single and triple-injection treatments. Bioventus is achieving this through securing exclusive U.S. distribution rights for Swiss IBSA’s three-injection Gelsyn-3™, as well as trying to get their own single injection product, Durolane®, pre-market approved for the U.S. market.
The cellular allograft market is currently the fastest growing segment in the U.S. orthopedic biomaterials market with a compound annual growth rate (CAGR) of 17%. Cellular allografts are currently limited to spine indications. The high average selling price (ASP) of cellular allografts, provides incentives for new players to enter the market. The synergies between the traditional bone graft substitute materials such as demineralized bone matrix (DBM) and allografts provide a platform for companies that operate within those markets to pursue growth by expanding into the cellular allograft market to complement their product portfolio. As new competitors enter the market, prices should decline, which will aid in greater adoption, and in turn, fuel the number of procedures using cellular allografts.
Shifting Hyaluronic Acid Market
The hyaluronic acid market is the largest segment of the U.S. orthopedic biomaterials market. Hyaluronic acid treatments involve one, two, three or five-injection treatments of varying volumes and concentrations into the knee to replace the synovial fluid of osteoarthritis patients. Osteoarthritis, which is a condition marked by the degeneration of bone joints and cartilage, affected approximately 40 million people in the United States in 2016. Patients who suffer from osteoarthritis experience acute joint pain, tenderness, stiffness, creaking, locking of the joints and inflammation. Hyaluronic acid treatment can delay knee replacement up to a year. Sometimes, consecutive cycles of hyaluronic acid treatment can provide even longer relief. If relief can be provided with fewer injections, then fewer visits to a doctor are needed. Five injection products were the first on the market but have lost share to three injection treatments. More recently, three injection products have been losing share to single injection treatments. However, there can be difficulties involved in using single injection products such as inflammation or stiffness in the knee. Also, some patients simply do not gain relief from single injection products. For these reasons, it is unlikely that single injection treatments will become the sole hyaluronic acid treatment method.
One of the drivers for the viscosupplementation market is the reimbursement structure. Most products are covered under Medicare for patients meeting certain criteria, particularly patients who suffer from osteoarthritis of the knee but have failed to respond to non-pharmacologic therapies and simple analgesics. The growth of single-injection products has been the most significant trend in the market. For instance, Anika Therapeutic’s single-injection product, Monovisc®, was mentioned in a recent press release for Q3 2016, where it cited Monovisc® as the company’s main driver of the total revenue growth in the reported period. Anika Therapeutics, significant growth in the single-injection segment largely led by Genzyme’s Synvisc-One, is an indication to other competitors that lower injection treatments have to be part of their product portfolio for the U.S. market.
Resurgence in Orthopedic Growth Factor
Orthopedic growth factors are a group of small, soluble proteins that bind onto cell surface receptors, triggering a series of signals that regulate the body’s ability to grow, renew and heal. Due to the regenerative properties of growth factors, they have been exploited for bone healing in orthopedic applications. Since September 1, 2015, there have been two main products offered in the U.S. growth factor market: INFUSE® by Medtronic and AUGMENT® by Wright Medical. Stryker’s OP-1™ which had been sold to Olympus Biotech is no longer available as Olympus Biotech ceased sales on May 31, 2014.
The orthopedic growth factor market was the second fastest growing segment of the U.S. orthopedic biomaterials market in 2016, largely due to Medtronic’s INFUSE® rebound and the success of Wright Medical’s AUGMENT®. For approved indications in the tibia, spine and dental applications, INFUSE® works very well. It is that core competency that has allowed the strong recovery of INFUSE®, and perhaps it may be seen that INFUSE® has simply increased in market value to its approved indications.
The competitive landscape in the U.S. orthopedic biomaterials market has not significantly changed in terms of rankings, but their strategy has. In particular, the leading competitors have aligned with consumer demand to emphasize convenience over price. For example, the hyaluronic acid market shift towards the more expensive single-injection treatment, to the fast growing cell-based treatments that include stem cells and bone marrow concentrates make this point. Those treatments that speed up recovery are central to the future of the orthopedic biomaterials market. However, the high costs to develop these products provide a barrier for competitors, but the resulting market penetration for developing these products are the key for future growth in the next several years.
- U.S. Market Report Suite for Orthopedic Biomaterials 2017 – MedSuite, iData Research
Payam Moghimi-Bidhendi is a market research analyst at iData Research and is the lead researcher for the U.S. orthopedic biomaterials report. His current work includes the European orthopedic biomaterials market report.
Kamran Zamanian, Ph.D., is president, CEO and a founding partner of iData Research. He has spent over 20 years working in the market research industry.
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