For Orthopedic Devices, the Future Is Still Bright

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The worldwide orthopedic device industry has been growing consistently during the past 20 years or so, in concert with growth in overall healthcare expenditures. Historically, it has been recessionproof with positive year-over-year price growth, even during periods of economic decline.

This is not to say that the industry will emerge unscathed from the next year or so, because the depth of the current recession is plainly much greater than those since World War II. However, the drivers of past growth appear undiminished.

The industry’s growth has been sustained by technological innovation and increasing specialization among surgeons. Such innovation has stimulated unit sales increases of hip, knee, and spinal implants, and more recently, treatments for the smaller bones and joints in the extremities. In addition, prices and reimbursement levels for these devices have also defied gravity, registering increases in the 5–10% range during the past three recessions with a cumulative growth of more than 150% since 1990.

How will the current recession affect this pattern of growth? There will be some fallout in the areas of innovation and integration of new technologies, funded with venture capital, that have helped to transform the industry. However, demand for clinically proven surgical implants and other treatments for musculoskeletal disease and trauma is likely to accelerate rather than slow.

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