Market Data
Methodology & segmentation
Survey Methodology
Our methodology is based on direct interviews with decision makers arising from our strong links with CEOs, R&D, Marketing and surgeons. More than 30 years of historical data on the Orthopedics market and competitors enable us to crosscheck and track the markets. A highly detailed segmentation is used for this report.
Three Dimensional operating models for the Orthopedics end-market and for contract manufacturing are used to build and monitor all the following segments:
Segmentation
14 segments & 70 sub-segments are quantified and qualified in this report. The main segments are: Forging, casting, hip machining, knee machining, shoulder machining, spine, trauma, extremities machining, instruments manufacturing, cases & trays, coating, ceramics, Marking Packaging and Sterilization (MPS), Additive Manufacturing, etc.
Worldwide Orthopedic market in 2021
Worldwide Orthopedic & Spine market in 2021 : US$43.5B
The Orthopedics market, including hip, knee, spine, trauma, extremities and orthobiologics accounted for more than US$43.5B in 2021 – an increase of +13.9% Vs 2020.The United States remains the largest market due to historical trends & higher sale prices. In Europe, Germany is by far the biggest market for all segments, followed by the UK, France & Italy.
The main drivers of the Orthopedics market remain demographic & economic parameters. Product innovation, resulting in a better (or higher) Product Mix, is boosting the market. They should remain the major growth contributors in the future. The trend towards reimbursement results in price pressure. This is the main limiter of the Orthopedic market. Price erosion of mature products in Orthopedics has been a constant over the past 20 years. We do not expect a major shift, but some countries will suffer more significant price decreases than others.
Revenues of the major Orthopedic companies in 2021 (BUS$)
Even the 5 major companies, controlling 62% of the worldwide orthopedics market, have continuously lost market share to the challengers. The challengers gained 2% market share (US$2.5B in revenue), achieving US$16.5B in revenue in 2021 (Vs US$14B in 2020). A huge gap remains between the size of the Majors and that of the Challengers. The revenues of the Majors are 10 to 50 times bigger than the Challengers’. However, the Challengers are growing more rapidly, on average by two-digit growth due to their wider range of products and their local high-level services. They are also attracting new sales forces.
The challengers gained market share continuously (2013-2021)
The only way for the Majors to have two-digit growth is by acquiring rivals (Depuy & Synthes, Zimmer & Biomet, Medtronic & Covidien, Stryker & K2M and Wright Medical).
Worldwide competition by product in 2021: Competitor market share in %
Zimmer Biomet is the leader in hips & knees followed by Depuy and Stryker. For the spine segment Medtronic is still n°1 but is losing market share. For spine, Nuvasive (with 13% market share) was n°3 and Globus (with 11%) was n°5 in 2021. For trauma and segment, Depuy Synthes is the leader, followed by Stryker.
The life cycle of Orthopedic products: growth forecast to 2026
Worldwide Orthopedic market - CAGR 2021-2026: +5.3%
In 2000, this market was US$11B. It grew to US$44B in 2021, and it will achieve US$56B in 2026. That represents an average of 5.3% growth in the coming years.
Orthopedic Contract Manufacturing market & trends in 2021
Orthopedic Ecosystem
This is the Orthopedic market and manufacturing value chain. The contract manufacturers supply implants, instruments, cases & trays to the Orthopedic companies who also manufacture some of the products in-house. The Major OEMs have a different outsourcing strategy to the challengers. The challengers’ outsourcing rate is very high.
Some of the coating core business suppliers also offer the OEMs equipment, installation and turn-key services.
Why do the Major OEMs continue to manufacture in-house?
This graph could provide the answer: because they do not have sustainable solutions on the CM side.
The comparison between COGS (Cost of Goods Sold) spending of US$ 8.2 B from 7 Majors and Top 20 CMO revenues of US$ 3.6 B shows a significant imbalance. Majors will require larger players to keep outsourcing confidently. Today the Majors have limited options for their manufacturing strategy: outsourcing more would mean reaching out for smaller CMOs, and they are reluctant to increase the number of suppliers.
Consolidation by acquisition
You can see on the following page the number and the frequency of acquisitions by the 3 Majors: Tecomet, Orchid and Viant. Consolidation by acquisition has never stopped in the contract manufacturing.
The other way for Contract Manufacturers to achieve consolidation is by acquiring an OEM facility. There have been many solid examples of this; e.g. Stryker, J&J & Medtronic disinvested their manufacturing facilities. The contract manufacturing market was boosted in 2019 by the Depuy Synthes–Jabil deal. Depuy disinvestment concerns 14 facilities worldwide including 7 in Switzerland.
Contract Manufacturing market historical revenues & forecasts (MUS$)
We believe Orthopedic Contract Manufacturing growth will accelerate by 2026. The US$7B of today, will be US$10.1B in 2026. Even in-House manufacturing is set to increase. Challengers account for 47% of the market with US$3,300M in 2021. Depuy Synthes spent US$1,315M, Stryker US$920M, Zimmer Biomet US$835M, Smith & Nephew US$520M and Medtronic US$165M. Some products will grow more than others due to their own dynamics and player strategies.
