According to Toronto, Canada-based Millennium Research Group (MRG), a medical technology market research firm, despite the fact that an older average population leads to increased numbers of spine related issues, spinal implant revenues will not reflect comparable growth.
After a poor 2010, when the market saw a decline of approximately three percent from the previous year, the market is not expected to exhibit significant gains over the next five years. Primary causes include cost-cutting measures and downward pressure on reimbursements.
Spinal fusions make up the largest portion of the spinal implant market, contributing nearly 95 percent of total revenues. Procedure growth will be recognized through 2015, but corresponding cuts to the average selling price of implants, due largely to facility restraints on costs, will continue to significantly limit revenue growth. The largest potential for growth, however, will be found in the non-fusion market.
Devices such as interspinous process decompression devices and pedicle screw-based dynamic stabilization systems have experienced revenue declines over the past year due to factors that include doubts about clinical efficacy and regulatory pressures. Although the outlook for pedicle screw-based dynamic stabilization systems will continue to be poor due to the FDA 522 postmarket surveillance study letters issued in 2009, the outlook for interspinous process decompression devices will get a boost from newer entrants into the market over the next several years that feature unique designs and less invasive approaches.
“There is a considerable amount of potential in this market that isn’t being realized currently, particularly in the non-fusion segment,” said Andrew Lee, a Millennium Group analyst. “Even as these technologies become established, the overall market will continue to be dominated by the dynamics within the spinal fusion segment of the market. Because of the high fusion procedure cost, these products are a natural target of cost cutting, particularly given the increasingly cost-conscious environment among facilities in the US. Growing public attention to the revenue generated by spinal implant companies and media scrutiny of the broad utility of some of these procedures has also put the industry in a negative light.”
A bright spot in this market is lumbar and cervical artificial discs, which will continue to grow. Their growth will be driven by positive clinical results and the entry of such companies as Globus Medical, LDR Spine, NuVasive and SpinalMotion, analysts noted.
The Millennium Research Group’s US Markets for Spinal Implants 2011 report includes procedure, unit, average selling price and revenue information for traditional thoracolumbar implants, traditional cervical implants, interbody devices and spinal nonfusion technologies (interspinous process decompression devices, pedicle screw-based dynamic stabilization devices, cervical artificial discs, lumbar artificial discs, facet arthroplasty devices, annulus repair devices and nuclear disc prostheses) in the United States.