Sunday 31 August 2014, (iData Research Inc.By Dr. Kamran Zamanian, Jeff Wong and Ceren Altincekic, Market Research Analyst)–The market for spinal implants, VCF and MIS spinal devices in the Asia-Pacific region is going through a two-tiered growth pattern based on the penetration…
levels in different countries. Developing and rapidly growing countries such as China are experiencing double-digit expansion in both the open surgery spinal implant and the MIS spinal device segments. In contrast, highly developed countries exhibit higher levels of stability in theiropen surgery spinal implant segment, expanding at moderate rates; whereas their MIS segments are growing significantly faster, replacing open surgeries where possible.
China surpassed Japan as the second largest spinal implant market in the world after the U.S.
The Chinese market for spinal implants is the least mature and fastest-growing market in Asia-Pacific region, due to the high number of untreated potential patients. Similar to the other BRIC (Brazil, Russia, India, and China) countries, access to healthcare in rural areas of China is extremely limited. As a result of economic growth and an initiative by the Chinese government to vastly improve healthcare coverage, a large number of previously untreated spine patients in China’s rural population are now undergoing surgery.
In 2013, the Chinese spinal implant market surpassed the USD$500 million mark. Approximately 25% of this revenue is generated by local Chinese companies which enjoy a large distribution network in the country. The remaining 75% of the revenue is captured by international companies such as Medtronic, DePuy Synthes and Stryker. Spinal procedures are shared 50/50 between local and international companies. This discrepancy between market value and units sold stemmed from the large price differential between local and international implants. This price difference will be the main catalyst behind the local segment’s growth whereas the international segment will continue expanding as a result of these products’ outstanding reputation and surgeon preference.
Overall, the Chinese spinal implant market is going through a major transformation in all segments including its MIS spinal device segment, which is still at its infancy. Wider insurance coverage reaching rural areas, increasing wealth and faith in western medicine are revamping the Chinese spinal implant market, turning it into the most exciting place to do spine business in the world.
Reimbursement cuts: the biggest limiter of the spinal implant market in Asia-Pacific
Countries enjoying a mature spinal implant market and an established healthcare system such as Australia and South Korea are facing significant reimbursement cuts. This is largely a function of the influx of cheaper local implants as well as governments’ attempts at reducing the healthcare burden on taxpayers. There is significant pricing pressure in Australia as a result of fierce price competition amongst manufacturers and distributors. Reimbursement policies offered by the government are likely to be reviewed over the forecast period and reductions to reimbursement prices will occur. Cheaper imports from Asian countries such as Korea and China are expected to put further pressure on Australian reimbursement, and therefore prices.
The pricing pressure has also been documented through research conducted by Private Healthcare Australia. The results demonstrated that the Australian government could save up to AUS$2.6 billion by 2020 if a prosthesis pricing reform were to be implemented. If accepted, the price reform can significantly hamper the growth of the spinal implants market.
Similarly, South Korea has an abundance of more affordable local spinal implants whichhas allowed for double-digit reimbursement cuts. These developments made it harder for international companies to compete in a low-priced market. However, no major price cuts are expected until the next round of reimbursement reappraisals, which will allow international competitors to reposition themselves from a price perspective and maintain their market share by servicing more procedures.
MIS: the way of the future
The application of MIS methods in spinal surgeries has revolutionized this field bydiminishing hospital stays, postoperative pain and faster recovery times. The introduction of the lateral access spine surgery by NuVasive, and the subsequent entry of other international companies to this segment expedited the growth of the MIS procedures around the world. In the Asia-Pacific region, the MIS segment varies in its expansion based on the maturity of the spine market in different countries.
The Japanese MIS spinal devices segment is still the second largest in the world after the US. The open surgery spinal implant market is very mature in the country with MISmaking great inroads in the spine segment. Japanese surgeons have great expertise in these techniques and make ample use of MIS techniques whenever they are applicable.However, the growth of the MIS segment in Japan will be slower than in countries such as China due to the maturity of its spinal implant market.
The Chinese MIS segment is has experienced explosive expansion, with growth rates above 20% year after year. Double digit rates will continue through the forecast period,transforming the Chinese MIS spinal devices into the second largest in the world. Several Chinese spine surgeons are getting trained in MIS techniques first and foremost, establishing themselves as MIS surgeons in the field, anticipating the massive wave of demand from back pain patients. MIS is replacing the traditional means of treatment and will pave the way for the future progress of the spine business across the world as well as in the Asia-Pacific region.
Medtronic leads the Asia-Pacific spinal implant market
In 2013, Medtronic was the leading competitor in both the open surgery spine and MIS spine markets in the Asia-Pacific region. The merger between DePuy and Synthes allowed the merged company to catch up, and in some cases even surpass Medtronic’s dominance. However, Medtronic has maintained its large market share in the MIS segment and in countries such as Japan where reimbursement was relatively higher. The company was also strong in South Korea where DePuy Synthes does not have as great of a presence as in other neighboring countries.
The competition will become fiercer through 2020 with NuVasive increasing its market share in the MIS segment, DePuy Synthes capturing more business from Medtronic and local competitors increasing their pressure on international companies by developing highquality products at lower prices.
Additional Information is Available
The information contained in this article is taken from four detailed and comprehensive reports published by iData Research (www.idataresearch.net) entitled “Asia-PacificMarkets for Spinal Implants & VCF”, “Chinese and Taiwanese Markets for Spinal Implants VCF”,“Asia-Pacific Markets for Minimally Invasive Spinal Devices” and “Chinese and Taiwanese Markets for Minimally Invasive Spinal Devices”. These reports cover the product segments for traditional spinal fusion, artificial discs, dynamic stabilization, vertebral compression fractures, minimally invasive thoracolumbar fixation and minimally invasive interbody fusion. For more information and a free synopsis of the above report, please contact iData Research at: marketing@idataresearch.net
iData Research is an international market research and consulting firm focused on providing market intelligence for the medical device, dental and pharmaceutical industries.