The worldwide recession put a dent in shipments to the $27-billion global medical implants market. But with demographics skewed toward an aging population and the persistence of osteoarthritis, rheumatoid arthritis and many other degenerative diseases, the prognosis is never far from positive.
The medical industry is usually a source of steady demand growth for titanium, even when some more cyclical end-use markets are in a tailspin. But that isn't true right now. While the underlying demand for implants has actually held up relatively well even in this severe economic downturn, titanium mill shipments to medical component manufacturers have not fared quite as well.
"Companies will not purchase titanium unless they absolutely need to," said Thomas U. Zuccarini, market manager, medical and consumer, for titanium producer Dynamet Inc., Washington, Pa. "Right now we are in a period of oversupply and declining prices, so therefore medical companies are carrying less inventory because it makes good business sense."
Because of this-and to a lesser degree because of some market share gains by competitive materials-year-to-date titanium shipments to the medical market have been flat to up by only low-single-digit percentages while, according to Millennium Research Group (MRG), demand for orthopedic implants continues to grow at mid-single-digit rates annually, only slightly below its high-single-percent rate of growth prior to the onset of the recession
The downturn in the economy has not had a severe dampening effect on demand for most medical implant procedures, according to Kevin Flewwelling, manager of Toronto-based MRG's orthopedics division, because a majority of procedures aren't elective.
"When you need spinal fusion surgery, you are in too much pain to wait. You need to have the procedure regardless of economics. The same thing goes for procedures made necessary by a traumatic accident," he said. "However, certain other procedures, such as hip or knee replacements, are more elective types of surgery. People who have these done have been suffering with joint pain for years, so they could potentially postpone it another six months to a year until they are more financially stable."
"There has definitely been a change of mindset regarding having elective procedures in this kind of economy," Zuccarini said. "Some of the dynamics affecting elective procedural volume is loss of health care insurance due to loss of job, as well as the affordability of co-payments and deductibles in this economic climate."
Zuccarini said that due to the combination of such delays and destocking at component manufacturers, demand for the rest of this year into early 2010 will be lighter than suppliers would like, but it should start picking up by the second half of next year and will gradually return to its pre-recession growth rates or even higher, assuming that the overall demand for titanium across all markets, not just medical, continues to strengthen along with the economy.
"Long-term demand for titanium for medical implants is alive and healthy and not going through the same dislocation as in the aerospace, automotive and oil and gas industries," said Howard Freese, manager of business development, biomedical, at ATI Allvac, Monroe, N.C. He said that not only are the demographics-both in the United States and worldwide-right for implant demand to continue to strengthen, "but titanium is also very well positioned to take advantage of this large and growing market."
According to Zimmer Holdings Inc., a major international medical components company headquartered in Warsaw, Ind., implant sales are around $27 billion worldwide, including $6.8 billion for spine implants, $6.4 billion for knees, $5.7 billion for hips, $4.1 billion for implants made necessary because of traumatic injuries, $3.2 billion for dental work and $800 million for extremities.
Titanium has long been used for a variety of different kinds of implants, but especially those associated with hip, knee, spine, shoulder and elbow procedures, Flewwelling said. "Historically, demand has been very high for these kinds of implants because they are heavily related to diseases related to aging, including osteoarthritis, rheumatoid arthritis and many other degenerative illnesses" that the aging baby-boomer population is increasingly suffering from.
It is this aging of the U.S. and world population (traditionally, the vast majority of implant procedures are done in the United States and Europe, but that is changing with increased gross domestic product growth in developing nations) that has been seen as the primary factor pushing implant demand.
However, it is not just older people that undergo implant procedures. Freese said there is a growing number of active young people receiving implants following traumatic accidents. "Also, Americans have been getting osteoarthritis at much younger ages, and with the increase of corpulent or obese patients there is an increased need for joint replacements."
Flewwelling said that while certain other materials-most notably polyetheretherketone (PEEK)-have gained some market share in the implant market in recent years, demand for titanium in these procedures will remain strong in the long term, especially for hip and knee replacement applications. "Titanium has been around for a while and most surgeons are comfortable with it and are pleased with its results."
"It has been proven to be a very safe material with a high level of efficacy," Freese said. "It is truly remarkable how many hips and knees implanted as many as 20 years ago are still functioning well." According to the publication Orthoworld, an investigation by Rush University Medical Center of 124 hip implants showed that 96 percent of the cementless metal components, most of which were composed of titanium or titanium alloys, were securely in place 20 years after the surgery.
Freese said that titanium has many favorable qualities, including its strength and the fact that it is very compatible with both bone and body fluids and, therefore, is not likely to be rejected by the body. "It also has osseointegrative properties, which means that when titanium is placed inside bone, over time the titanium becomes an integral part of the bone."
PEEK, however, has made some gains for spine implants and interbody devices, Flewwelling said, because it tends to have a more favorable reaction to X-rays and its modulus of elasticity tends to be closer to bone.
Despite this, and the recent introduction of bioresorbable materials (materials that are eventually absorbed into the body), he doesn't think titanium producers have a lot to fear. "I don't see titanium going away. There is no need to change materials unless it is demonstrated that the new materials are safer than titanium or provide something that titanium can't."
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