Lifestyle and Aging Population Continue to Drive Asian Orthopedic Device Market

By Ames Gross
June 22, 2017


• Categories: 04-Product Design & Development, Business Analysis, Market Access

The demand for orthopedic devices in Asia is thriving, primarily due to aging populations. The greater number of elderly adults results in a higher prevalence of osteoarthritis and other conditions leading to injuries requiring orthopedic devices. According to the World Health Organization (WHO), the average life expectancy in Japan is 83.7 years and 82.3 years in South Korea, while the average life expectancy in the United States is 79.3 years. Other factors that have increased the demand for orthopedic devices include more injuries and medical tourism. In some Asian countries, there is an increasing number of workplace injuries and injuries resulting in more involvement in sports. Additionally, countries like Thailand, Korea and Singapore have growing medical tourism industries for procedures such as orthopedic surgeries.

Overall, the Asian market share for global orthopedic devices is not as large compared to the United States and Europe, but it is growing at a faster rate. The Asian orthopedic market is expected to grow more than 8% annually compared to the worldwide annual growth rate of 5%. By 2021, the total value of the Asian orthopedic market will exceed $11 billion in a $50 billion industry. The demand for large joint devices (e.g., hips, knees) is higher than that of small bone and joint devices (e.g., hands, wrists, shoulders), but the small bone and joint market is growing at more than 8% annually. Of the large joint devices, the demand for knee replacements is currently growing at the fastest rate, due to increased demand from both older individuals with osteoarthritis and younger individuals who lead active lifestyles.

Japan

Japan has the oldest population in Asia, with more than 20% of the population above the age of 65. Japan has one of the largest medical device markets in the world, and Japan’s large joint device market is nearly $2 billion. Japan’s small bone and joint device market is smaller, but expected to grow to $150 million by 2022. Currently, hand and wrist devices account for more than 70% of the small bone and joint market.

Generally, Japanese consumers and doctors prefer products produced by Japanese companies. However, Western companies have still been able to succeed in Japan by offering a larger product selection and maintaining a strong reputation for quality devices with Japan’s KOLs.

China

China has the world’s largest population as well as the world’s largest elderly population. By 2030, there will be more than 330 million Chinese individuals over the age of 65, compared to 70 million people over 65 in the United States. There are nearly 70 million Chinese people over age 50 suffering from osteoporosis, a number that will increase as the overall population increases. There are approximately 600,000 hip fractures a year, resulting in a high demand for large joint devices. China’s large joint market is expected to surpass $2.2 billion by 2020, while the small bone and joint market will exceed $170 million by 2022.

Furthermore, orthopedic procedures are becoming more affordable and accessible. Government healthcare reforms have led to lower out-of-pocket costs for patients. More individuals are choosing to undergo elective procedures and are becoming aware of knee disorders and related treatments. In addition, China’s increased urbanization has also led to many more car accidents and injuries requiring orthopedic medical devices and treatment.

Research has also indicated that obesity increases one’s risk of developing osteoarthritis later in life. Surprisingly, China has one of the largest overweight populations in the world, and obesity is a major public health concern. More than 90 million obese individuals are at greater risk of developing osteoarthritis and susceptible to injuries requiring orthopedic devices.

Today, foreign firms face some competition from domestic Chinese medical device manufacturers. PW Walkman (China) is a leading Chinese orthopedic implant device manufacturer and has four subsidiary companies that market products at lower price points. However, in the past six years, a number of Chinese medical device orthopedic companies have been purchased by U.S. companies that can now sell a more basic product (less bells and whistles) in China.

India

India, the world’s second most populous country, has an aging population, albeit not as bad as Japan and China, where more than 200 million patients suffer from orthopedics-related conditions. Like in other Asian countries, there is a high demand for large joint devices, and small bone and joint devices. Hand and wrist devices have the highest demand of small bone and joint devices.

India imports more than two-thirds its orthopedic devices from foreign medical device companies. However, these American and European medical device firms face competition from local Indian firms. Indian medical device companies are offering an increasingly large array of orthopedic products that are cheaper, but also lower in quality. For example, Mumbai-based Inor Orthopedics, manufactures joint, trauma and spinal orthopedic devices advertised as reasonably priced products. Additionally, the Indian government launched a “Make in India” initiative in 2014 to promote domestic industries like the medtech sector. Western companies are generally part of the premium market, offering the latest, high-quality products. However, large multinationals like Medtronic and Stryker are now making basic orthopedics products (with less bells and whistles) in China, and they are exported to developing countries like India.

Recently, the high price of orthopedic implants and other medical devices has become an issue. In February 2017, the National Pharmaceutical Pricing Authority (NPPA) established price limits for stents. As a result, Medtronic, Boston Scientific and Abbott have pulled their stents off the Indian market. The NPPA also announced it would begin examining the prices of 14 other medical devices. If the NPPA determines orthopedic implant prices are too high, they may also be subject to price caps.

Korea

Korea has a population of more than 50 million people, and by 2040, half of the Korean population will be above the age of 52. Approximately 5 million South Korean patients require orthopedic treatment annually.

Shoulder disorders are common in South Korea, where hiking is the country’s most popular pastime, especially among middle-aged individuals. Rotator cuff tears and adhesive capsulitis, which is more commonly known as frozen shoulder, are especially common shoulder disorders. There is also a high demand for knee replacements. In South Korea, patients have started to prefer cementless knee replacements, which should benefit companies that produce cementless devices.

Taiwan

Taiwan, like other Asian countries, has a quickly aging population and growing orthopedic device market. Taiwan relies heavily on foreign companies for advanced medical devices and nearly 70% of the medical device market consists of imported products. Taiwanese medical device companies focus on producing medical equipment and home healthcare products, leaving the orthopedic market competitive for foreign companies.

Taiwan is a regional leader in joint replacement procedures. More than 20% of all operations performed in Taiwan are joint replacement surgeries. In 2016, the government launched an arthroplasty registry to assist healthcare professionals in improving procedure success rates.

Western Orthopedic Device Companies in Asia

Orthopedic companies with a strong presence in Asia include DePuy Synthes, Stryker and Zimmer Biomet. In 2015, following the merger between Zimmer and Biomet, Zimmer Biomet became the leading manufacturer of large joint devices in China, Japan and South Korean. Zimmer Biomet’s largest market is Japan and their most popular products are devices used for knee replacements. Stryker currently occupies the largest market share for hip replacements. DePuy Synthes is also a leading producer of hip replacements.

DePuy Synthes, a Johnson & Johnson company, currently leads the small bone and joint markets in China, and Japan and holds more than a third of the market share. Acumed and Stryker’s small bone and joint products are also popular among Asian consumers.

Lifestyle and demographic changes in Asia are driving growth in the orthopedic market. Studies show countries in Asia will continue to experience aging populations, meaning demand for orthopedic devices will remain strong.