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The 2024 edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT® is now available to ORTHOWORLD Members! The report features an all-new design that we love, but the same in-depth analysis and data across 227 pages and 111 exhibits.
If you’re new to the report, you can learn more about it with our quick video tour. To give you a sense of the topics we cover, I’ll highlight below five takeaways from this year’s installment of the annual report:
- Demand could remain elevated versus historical norms.
- Demographic trends and patient behaviors could drive more surgical volume.
- Enabling technology is changing the competitive landscape.
- Technology is a key driver in industry consolidation.
- Early movers in high-growth segments face more competition.
Ongoing Robust Demand
The orthopedic market enjoyed a relatively buoyant 2023. It grew 6.3% to $59 billion worldwide, about three percentage points higher than its historical average. While the market saw strong performance across segments, recovery in joint replacement procedures drove much of the overperformance.
Large joints essentially “lost” two years of growth after the pandemic. Those surgeries started to come back in late 2022 and will provide a tailwind through a portion of 2024.
While that tailwind will eventually subside, we expect ongoing robust demand for orthopedic procedures in the near term. As shown below, we project the orthopedic market will grow to $70 billion in worldwide sales by 2027.
Encouraging Demographic Trends
A rapidly aging population and changing patient behaviors are driving market growth. Another 10,000 people turn 65 years old every day in the U.S. alone. The older population is more active for longer. Younger orthopedic patients are increasingly well-educated about their treatment options as they prioritize a return to normal function.
But it isn’t that there are just more patients in the surgical funnel. Zimmer Biomet leadership identified three early trends that they believe could cause patients to seek orthopedic care when they might not have otherwise:
- Improving digital technology like robotics and navigation increases patient confidence.
- The proliferation of orthopedic ASCs makes the patient’s preferred site of service more accessible.
- Remote work gives patients more flexibility in how they recover from orthopedic surgery.
While these demographic and behavioral trends are just starting to emerge, they could bode well for the orthopedic industry’s overall growth rate.
Competitive Impact of Technology
Orthopedic enabling technologies like robotics are changing the industry’s competitive landscape. Despite relatively low utilization and barriers to adoption, a full-fledged ecosystem is a must in joint replacement and spine.
Stryker experienced both sides of that coin. Its combination of Mako robotics and cementless knees remains hard to beat. However, the company struggled to replicate that success in its spine segment without a robot. Underscoring the importance of tech in spine, Stryker put its shoulder robot on the backburner to get Mako Spine launched more quickly.
Medtronic will soon have to fend off two giants in Stryker and Globus Medical. Medtronic CEO Geoffrey Martha said those competitive dynamics won’t leave much room for smaller players.
“Accounts are making investments in a company now,” he said. “The Medtronic ecosystem, AiBLE, versus some other ecosystem. There’s not many out there. It’s changing the industry structure because building these ecosystems takes a lot of expertise and capital. You don’t have this long tail of tiny spine companies that are preying on docs. Those are going away.”
Technology Spurring Consolidation
Orthopedic M&A activity slowed after the pandemic as companies prioritized commercial-ready assets with a clear path to profitability. However, enabling technology drove some of the most important M&A deals we’ve seen in recent years. Orthopedic players recognize not only the need for technology, but technology at scale.
While Globus Medical may have tremendous enabling technology in spine, it has not been able to cope with Medtronic’s sheer size, which typically places systems at multiples of Globus’ rate.
Globus said part of the NuVasive deal rationale was generating the scale to compete with the largest orthopedic companies, especially regarding technology.
The M&A transaction numbers tell the same story. Spine is the most active orthopedic segment for M&A, accounting for more than a quarter of all transactions since 2016. Transactions for digitally focused products also accelerated since the pandemic.
These dynamics contribute to an extremely top-heavy market. Just seven orthopedic companies have annual sales of over $1 billion, generating 66% of all orthopedic sales. With Enovis slated to hit the $1 billion mark in 2024, the balance will shift even more.
Below, we show the $59 billion orthopedic market split by company size according to annual sales. There are nine companies with sales between $400 million and $900 million, nine companies with sales between $200 million and $399 million and 20 companies with sales between $100 million and $199 million.
Tightening Competition for Early Movers
Current tailwinds notwithstanding, companies remain focused on diversifying out of large joints and spine into higher-growth areas like foot and ankle, shoulders and sports medicine. But technology and consolidation helped the pack gain ground on some early movers.
Stryker faces a more crowded field in joint replacement robotics as its main competitors now all have commercialized systems. Zimmer Biomet also gets to trailblaze a market for shoulder robotics. In spine, Medtronic suddenly has credible competition on multiple fronts. Pure-play foot and ankle companies like Treace Medical also saw a sudden and significant influx of competitive pressure.
“The market environment and competitive landscape are quickly evolving,” said Treace Medical Founder and CEO John Treace. “We’re seeing increased use and surgeon adoption of MIS osteotomy solutions. At the same time, we’re facing even more competition from knockoffs of our Lapiplasty products. Both of these dynamics are creating incremental headwinds to our Lapiplasty growth.”
Learn more about these five dynamics and the many others impacting orthopedics in the 2024 edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT. Our Elite Members also get access to the Orthopedic Companies Sales Matrix, the foundation of the report’s exhibits and a great data-focused companion to the annual report.
The 2024 edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT® is now available to ORTHOWORLD Members! The report features an all-new design that we love, but the same in-depth analysis and data across 227 pages and 111 exhibits.
If you're new to the report, you can learn more about it with our quick video tour. To give you a sense of...
The 2024 edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT® is now available to ORTHOWORLD Members! The report features an all-new design that we love, but the same in-depth analysis and data across 227 pages and 111 exhibits.
If you’re new to the report, you can learn more about it with our quick video tour. To give you a sense of the topics we cover, I’ll highlight below five takeaways from this year’s installment of the annual report:
- Demand could remain elevated versus historical norms.
- Demographic trends and patient behaviors could drive more surgical volume.
- Enabling technology is changing the competitive landscape.
- Technology is a key driver in industry consolidation.
- Early movers in high-growth segments face more competition.
Ongoing Robust Demand
The orthopedic market enjoyed a relatively buoyant 2023. It grew 6.3% to $59 billion worldwide, about three percentage points higher than its historical average. While the market saw strong performance across segments, recovery in joint replacement procedures drove much of the overperformance.
Large joints essentially “lost” two years of growth after the pandemic. Those surgeries started to come back in late 2022 and will provide a tailwind through a portion of 2024.
While that tailwind will eventually subside, we expect ongoing robust demand for orthopedic procedures in the near term. As shown below, we project the orthopedic market will grow to $70 billion in worldwide sales by 2027.
Encouraging Demographic Trends
A rapidly aging population and changing patient behaviors are driving market growth. Another 10,000 people turn 65 years old every day in the U.S. alone. The older population is more active for longer. Younger orthopedic patients are increasingly well-educated about their treatment options as they prioritize a return to normal function.
But it isn’t that there are just more patients in the surgical funnel. Zimmer Biomet leadership identified three early trends that they believe could cause patients to seek orthopedic care when they might not have otherwise:
- Improving digital technology like robotics and navigation increases patient confidence.
- The proliferation of orthopedic ASCs makes the patient’s preferred site of service more accessible.
- Remote work gives patients more flexibility in how they recover from orthopedic surgery.
While these demographic and behavioral trends are just starting to emerge, they could bode well for the orthopedic industry’s overall growth rate.
Competitive Impact of Technology
Orthopedic enabling technologies like robotics are changing the industry’s competitive landscape. Despite relatively low utilization and barriers to adoption, a full-fledged ecosystem is a must in joint replacement and spine.
Stryker experienced both sides of that coin. Its combination of Mako robotics and cementless knees remains hard to beat. However, the company struggled to replicate that success in its spine segment without a robot. Underscoring the importance of tech in spine, Stryker put its shoulder robot on the backburner to get Mako Spine launched more quickly.
Medtronic will soon have to fend off two giants in Stryker and Globus Medical. Medtronic CEO Geoffrey Martha said those competitive dynamics won’t leave much room for smaller players.
“Accounts are making investments in a company now,” he said. “The Medtronic ecosystem, AiBLE, versus some other ecosystem. There’s not many out there. It’s changing the industry structure because building these ecosystems takes a lot of expertise and capital. You don’t have this long tail of tiny spine companies that are preying on docs. Those are going away.”
Technology Spurring Consolidation
Orthopedic M&A activity slowed after the pandemic as companies prioritized commercial-ready assets with a clear path to profitability. However, enabling technology drove some of the most important M&A deals we’ve seen in recent years. Orthopedic players recognize not only the need for technology, but technology at scale.
While Globus Medical may have tremendous enabling technology in spine, it has not been able to cope with Medtronic’s sheer size, which typically places systems at multiples of Globus’ rate.
Globus said part of the NuVasive deal rationale was generating the scale to compete with the largest orthopedic companies, especially regarding technology.
The M&A transaction numbers tell the same story. Spine is the most active orthopedic segment for M&A, accounting for more than a quarter of all transactions since 2016. Transactions for digitally focused products also accelerated since the pandemic.
These dynamics contribute to an extremely top-heavy market. Just seven orthopedic companies have annual sales of over $1 billion, generating 66% of all orthopedic sales. With Enovis slated to hit the $1 billion mark in 2024, the balance will shift even more.
Below, we show the $59 billion orthopedic market split by company size according to annual sales. There are nine companies with sales between $400 million and $900 million, nine companies with sales between $200 million and $399 million and 20 companies with sales between $100 million and $199 million.
Tightening Competition for Early Movers
Current tailwinds notwithstanding, companies remain focused on diversifying out of large joints and spine into higher-growth areas like foot and ankle, shoulders and sports medicine. But technology and consolidation helped the pack gain ground on some early movers.
Stryker faces a more crowded field in joint replacement robotics as its main competitors now all have commercialized systems. Zimmer Biomet also gets to trailblaze a market for shoulder robotics. In spine, Medtronic suddenly has credible competition on multiple fronts. Pure-play foot and ankle companies like Treace Medical also saw a sudden and significant influx of competitive pressure.
“The market environment and competitive landscape are quickly evolving,” said Treace Medical Founder and CEO John Treace. “We’re seeing increased use and surgeon adoption of MIS osteotomy solutions. At the same time, we’re facing even more competition from knockoffs of our Lapiplasty products. Both of these dynamics are creating incremental headwinds to our Lapiplasty growth.”
Learn more about these five dynamics and the many others impacting orthopedics in the 2024 edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT. Our Elite Members also get access to the Orthopedic Companies Sales Matrix, the foundation of the report’s exhibits and a great data-focused companion to the annual report.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
