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The United States remains the world’s largest orthopedic market by revenue, but companies are increasingly turning their attention to international opportunities. We estimate that a third of all orthopedic sales occurred outside the U.S. in 2023.
Below, we examine three major topics for international orthopedic markets: the strategic priority of China, the inflection point of robotics outside the U.S. and increasing international competition for companies of all sizes.
Chinese Orthopedic Market Remains a Strategic Priority
According to the World Health Organization, China has one of the fastest-growing aging populations in the world. By 2040, the country will have over 400 million people aged 60 or older, representing about 28% of its population. Put another way, the over-60 cohort in China will be larger than the projected U.S. population in 2040.
Orthopedic companies anticipate China becoming the largest orthopedic market in the world. However, the country’s national volume-based procurement (VBP) policies for medical devices created significant short-term headwinds in recent years. The policies drastically reduced prices for joint replacement, spine, trauma and now sports medicine devices.
A sweeping healthcare anti-corruption campaign in China added more uncertainty to the market. The campaign focuses on payments and perks between companies and hospital administrators or procurement officials.
However, despite the volatile environment, the largest orthopedic players remain committed to the strategically important Chinese market.
“We see VBP as a short-term tailwind,” said Tim Schmid, Executive Vice President of MedTech for Johnson and Johnson. The volume opportunity will far offset the impact we’re seeing on price. The anti-corruption campaign has had an impact on procedural volumes and engagement from healthcare professionals. Any effort on behalf of any government to build integrity and compliance in the health system is a good thing. We remain absolutely committed to China.”
Orthopedic Enabling Technology Opening International Doors
Despite low utilization and barriers to adoption, orthopedic enabling technology is a must-have among the top companies in joint replacement and spine. Sports medicine and foot/ankle applications are likely on the horizon.
Medtronic calls its technology its “winning formula,” while Stryker called technology the “ticket to the dance.” Although the U.S. accounts for three-quarters of all enabling technology revenue, international markets are increasingly important to the segment and could be nearing an inflection point.
Stryker’s performance in 2023 illustrates the momentum of international markets for enabling technology sales. The company’s segment that houses sales of its Mako robotic system saw a low single-digit decline in the U.S., but grew nearly 40% internationally.
“We saw this sort of terrific growth from robotics here in the U.S. starting five or six years ago,” said Stryker CEO Kevin Lobo. “That is now starting to happen in the Asia Pacific and EMEA markets. The hip and knee growth we’re seeing internationally will be a gift that keeps giving for the next few years. We’re hitting our stride and feeling very bullish about the future.”
DePuy Synthes’ international knee replacement sales benefitted greatly from the rapid globalization of the company’s VELYS robot and technology ecosystem. VELYS has entered over 20 markets and acclimated over 70,000 procedures in the two-and-a-half years since its launch.
The system’s international success helped DePuy Synthes turn around its knee franchise, which lagged behind its peers in growth. Over the last four quarters. DePuy Synthes’ international knee sales averaged 15% growth.
Increasing International Competition Among Ortho Players
As global competition increases, orthopedic companies invest more time and resources into international markets. It isn’t just the largest, internationally established players. Both U.S.-heavy and smaller orthopedic companies see international markets as a significant opportunity for growth.
While Stryker is the largest orthopedic company by revenue, it hasn’t had the same international presence as some of its peers. That dynamic is starting to change. The company called Europe a “growth engine” while citing key contributions from Australia. As mentioned, Stryker’s international capital sales saw buoyant growth in 2023.
Enovis used its aggressive M&A strategy to rapidly globalize as it approaches $1 billion in annual reconstructive sales. In recent years, the company purchased European players like Mathys, Novastep and LimaCorporate. Since 2020, Enovis’ international recon sales have increased by a factor of 16, growing from just over $12 million to $204 million by the end of 2023.
Mid-sized and smaller companies are also picking their spots. ATEC returned to international sales with a “narrow and deep” focus in key markets where it can deploy its best technology. The company said that Australia and New Zealand have provided a tailwind to growth.
Foot and ankle player Paragon 28 sees international markets as crucial to its next growth phase. Strong performances in the United Kingdom and Austria are helping the company lay a foundation for sustainable growth.
“Our mission is to improve outcomes for foot and ankle patients and to really put a mark on this market,” said Paragon 28 CEO Albert DaCosta. “You can’t do that as a domestic-only company. You have to be global, and our international reception has been phenomenal.”
As orthopedic growth rates normalize in 2024, companies will seek further upside in underpenetrated or emerging markets. We expect these dynamics to drive further consolidation, which could significantly change the landscape.
The United States remains the world's largest orthopedic market by revenue, but companies are increasingly turning their attention to international opportunities. We estimate that a third of all orthopedic sales occurred outside the U.S. in 2023.
Below, we examine three major topics for international orthopedic...
The United States remains the world’s largest orthopedic market by revenue, but companies are increasingly turning their attention to international opportunities. We estimate that a third of all orthopedic sales occurred outside the U.S. in 2023.
Below, we examine three major topics for international orthopedic markets: the strategic priority of China, the inflection point of robotics outside the U.S. and increasing international competition for companies of all sizes.
Chinese Orthopedic Market Remains a Strategic Priority
According to the World Health Organization, China has one of the fastest-growing aging populations in the world. By 2040, the country will have over 400 million people aged 60 or older, representing about 28% of its population. Put another way, the over-60 cohort in China will be larger than the projected U.S. population in 2040.
Orthopedic companies anticipate China becoming the largest orthopedic market in the world. However, the country’s national volume-based procurement (VBP) policies for medical devices created significant short-term headwinds in recent years. The policies drastically reduced prices for joint replacement, spine, trauma and now sports medicine devices.
A sweeping healthcare anti-corruption campaign in China added more uncertainty to the market. The campaign focuses on payments and perks between companies and hospital administrators or procurement officials.
However, despite the volatile environment, the largest orthopedic players remain committed to the strategically important Chinese market.
“We see VBP as a short-term tailwind,” said Tim Schmid, Executive Vice President of MedTech for Johnson and Johnson. The volume opportunity will far offset the impact we’re seeing on price. The anti-corruption campaign has had an impact on procedural volumes and engagement from healthcare professionals. Any effort on behalf of any government to build integrity and compliance in the health system is a good thing. We remain absolutely committed to China.”
Orthopedic Enabling Technology Opening International Doors
Despite low utilization and barriers to adoption, orthopedic enabling technology is a must-have among the top companies in joint replacement and spine. Sports medicine and foot/ankle applications are likely on the horizon.
Medtronic calls its technology its “winning formula,” while Stryker called technology the “ticket to the dance.” Although the U.S. accounts for three-quarters of all enabling technology revenue, international markets are increasingly important to the segment and could be nearing an inflection point.
Stryker’s performance in 2023 illustrates the momentum of international markets for enabling technology sales. The company’s segment that houses sales of its Mako robotic system saw a low single-digit decline in the U.S., but grew nearly 40% internationally.
“We saw this sort of terrific growth from robotics here in the U.S. starting five or six years ago,” said Stryker CEO Kevin Lobo. “That is now starting to happen in the Asia Pacific and EMEA markets. The hip and knee growth we’re seeing internationally will be a gift that keeps giving for the next few years. We’re hitting our stride and feeling very bullish about the future.”
DePuy Synthes’ international knee replacement sales benefitted greatly from the rapid globalization of the company’s VELYS robot and technology ecosystem. VELYS has entered over 20 markets and acclimated over 70,000 procedures in the two-and-a-half years since its launch.
The system’s international success helped DePuy Synthes turn around its knee franchise, which lagged behind its peers in growth. Over the last four quarters. DePuy Synthes’ international knee sales averaged 15% growth.
Increasing International Competition Among Ortho Players
As global competition increases, orthopedic companies invest more time and resources into international markets. It isn’t just the largest, internationally established players. Both U.S.-heavy and smaller orthopedic companies see international markets as a significant opportunity for growth.
While Stryker is the largest orthopedic company by revenue, it hasn’t had the same international presence as some of its peers. That dynamic is starting to change. The company called Europe a “growth engine” while citing key contributions from Australia. As mentioned, Stryker’s international capital sales saw buoyant growth in 2023.
Enovis used its aggressive M&A strategy to rapidly globalize as it approaches $1 billion in annual reconstructive sales. In recent years, the company purchased European players like Mathys, Novastep and LimaCorporate. Since 2020, Enovis’ international recon sales have increased by a factor of 16, growing from just over $12 million to $204 million by the end of 2023.
Mid-sized and smaller companies are also picking their spots. ATEC returned to international sales with a “narrow and deep” focus in key markets where it can deploy its best technology. The company said that Australia and New Zealand have provided a tailwind to growth.
Foot and ankle player Paragon 28 sees international markets as crucial to its next growth phase. Strong performances in the United Kingdom and Austria are helping the company lay a foundation for sustainable growth.
“Our mission is to improve outcomes for foot and ankle patients and to really put a mark on this market,” said Paragon 28 CEO Albert DaCosta. “You can’t do that as a domestic-only company. You have to be global, and our international reception has been phenomenal.”
As orthopedic growth rates normalize in 2024, companies will seek further upside in underpenetrated or emerging markets. We expect these dynamics to drive further consolidation, which could significantly change the landscape.
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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.
