Global Orthopedic Giants Stall Amid China's Volume-Based Procurement: Combined Revenue Growth Slows to Just 5% in 2024

In the process of continuous reshuffling,The advantages of foreign traditional orthopedic consumables in the Chinese market are gradually fading.The most direct reflection can be found in the annual reports of the Big Four in orthopedic consumables.

In 2024, the four major global orthopedic giants—Johnson & Johnson, Stryker, Zimmer Biomet, and Smith & Nephew—Total annual revenue was $28.2 billion, representing a year-over-year increase of only 5%.Stryker, with the highest growth rate, only reached 8.9%,Failed to achieve double-digit growth, while the impact of China's volume-based procurement of medical consumables was also included in the annual report.

1. Johnson & Johnson Orthopedics Business Revenue

According to Johnson & Johnson's 2024 financial report, the performance of the orthopedics business was relatively average compared to the outstanding performance of the cardiovascular business.Johnson & Johnson's orthopedics revenue in 2024 was $9.158 billion, accounting for 28.7% of total revenue, with a year-on-year increase of 2.4%.

Johnson & Johnson Medical Technology revealed in its annual report,The decline in spine, sports medicine and other businesses was primarily due to competitive pressures and the impact of China's volume-based procurement.

2. Stryker Orthopedics Business Revenue

StrykerOrthopedic Business Sales Reach $9.1 Billion in 2024, Accounting for 40% of Total Revenue, with a Year-on-Year Increase of 8.9%.

Stryker revealed in its annual report,Due to the implementation of the volume-based procurement policy for medical consumables in China, the orthopedic business has been significantly impacted, particularly by price pressures.

3. Zimmer Biomet Orthopedics Business Revenue

Zimmer Biomet 2024Orthopedics achieved sales of $7.678 billion, a year-on-year increase of 3.8%.

Zimmer Biomet revealed in its annual report that the implementation of China's volume-based procurement policy aims to reduce the prices of medical devices and other products., while Zimmer Biomet also faced pressure on its performance due to unsuccessful bids in related tenders.

4. Smith & Nephew Orthopedics Business Revenue

Smith&NephewOrthopedic business sales reached $2.3 billion in 2024, accounting for 40% of total revenue, with a year-on-year increase of 4.1%.

Smith & Nephew revealed in its annual report that its performance was impacted by the volume-based procurement of medical consumables in China.The decrease in end-user demand in the second half of the year led to a significant slowdown in orders from its distribution partners.Although the sports medicine, ENT, and advanced wound management businesses outside of China will continue to experience strong growth, these gains will be offset by the anticipated expansion of China's volume-based procurement policy into sports medicine (expected to create approximately $25 million in revenue headwinds by 2025).

In 2024, China's orthopedic consumables market underwent a profound transformation — the traditional pattern long dominated by foreign enterprises was completely broken, and the wave of domestic substitution is reshaping the industry ecosystem. The continuous deepening of the centralized procurement policy has accelerated this process.

In the field of artificial joints,Market Share of Foreign EnterprisesPlummeted cliff-like from 70% before the centralized procurement to 21%,Instead, there is a collective breakthrough by domestic companies: Zhengtian Medical (16%), Aikang Medical (15%), Wego Orthopedics (9%), and Chunli Medical (8%) form the "first tier" of the domestically produced camp.

Spinal Implants MarketAlso experiencing a dramatic reshuffle,The share of foreign investment plummeted from 59% to 20%,Medtronic, Johnson & Johnson and other giants lost a combined 30% of market share, while Wego Orthopedics leads the domestically produced sector with a 16% share, and companies like Sanyou Medical (7%) and Double Dove Medical are quickly filling the gap.

Trauma Consumables MarketThe transformation was more thorough,The share of foreign-funded enterprises has shrunk from 28% to 9%.Johnson & Johnson, Zimmer Biomet and other multinational enterprises have nearly "zero presence" in the alliance's renewal bidding.

Sports MedicineAs the last area to initiate centralized procurement, after the policy was implemented in May 2024The share of foreign investment dropped from 80% to 50%.Smith & Nephew (19%) and Johnson & Johnson (15%) remain in the top three, but the catch-up momentum of Chinese companies is becoming formidable.

Against the backdrop of accelerating industry reshuffle, 2024 has become a watershed for strategic adjustments by global orthopedic giants —Exiting low-efficiency markets, focusing on high-value sectors, and deploying cutting-edge technologies have become the three core strategies for multinational corporations to address market changes.

Strategic Contraction: From "Scale First" to "Efficiency Reigns Supreme"

Multinational companies are refocusing resources by divesting low-growth businesses. Take Stryker, for example.In 2024, after completing the sale of its U.S. spinal business, it further exited the French market, completely divesting this segment that had long been a drag on profitability.Similarly, Zimmer Biomet went public through a spin-off and secondary sale,Ultimately transform ZimVie into an independent entity focused on the dental track.Johnson & Johnson has launched a two-year restructuring plan for its orthopedics business.Gradually exit low-profit-margin markets and product lines,The goal is a structural improvement in the profitability of the department.

Behind this series of actions lies a shift in the industry's underlying logic: after the end of the traditional "easy-win" model reliant on high-priced consumables, companies must reconstruct their business landscape through precise "additions and subtractions."Exiting the red ocean market is "subtraction," while laying out in high-barrier fields is the key "addition."

Technological Breakthrough: Surgical Robots and the Wave of Intelligence

Facing the major trend of orthopedic surgeries evolving towards outpatient and precision-based procedures, leading companies are increasingly strengthening their technological moats.Johnson & Johnson continues to expand its advantages through the VELYS Orthopedic Robotics Series,Its product line has covered total knee replacement, unicompartmental knee replacement, and spinal fusion surgery, forming a full-process solution from diagnosis to post-operation. Smith & Nephew focuses on empowering through artificial intelligence,Launch the CORI robotic system, which does not rely on image navigation, and the CorioGraph preoperative planning platform.Take surgical precision to new heights.

These technological advancements not only enhance clinical efficiency but also redefine the industry's value distribution rules—shifting from "selling products" to "selling solutions" and upgrading from "hardware suppliers" to "intelligent service providers."

M&A Frenzy: Seizing the Growth Pole for the Next Decade

Global Orthopedic Market in 2025Stryker Acquires Inari Medical for 36 Billion YuanMarking the beginning, symbolizingThe peripheral interventional market, a blue ocean worth tens of billions of dollars, has become a battleground for competitors.Zimmer Biomet Spends $8.7 Billion to Acquire Paragon 28, Entering the Foot and Ankle MarketJohnson & Johnson Perfects Its Robotics Ecosystem Through Serial Mergers and Acquisitions: Capital Operations of Multinational Giants Exhibit Two Key CharacteristicsFirst, target high-potential sectors with an annual compound growth rate exceeding 7%. Second, rapidly build a technology portfolio through "small-scale, high-frequency" acquisitions.

The essence of this strategy is to use mergers and acquisitions as a "buffer" against the impact of centralized procurement and a "catalyst" for future development — mitigating policy risks through business diversification while strengthening competitive barriers with technological synergies.

The transformation path of orthopedic giants reveals the deep-seated rules of change in the medical industry:Driven by the triple forces of policy reshaping, technological revolution, and demand upgrading, the key to corporate survival has shifted from "scale expansion" to "value creation."When Traditional Growth Engines Stall, Only Through Technological Breakthroughs, Ecosystem Restructuring, and Strategic Foresight Can One Seize the Initiative Amid Industry Upheaval. This Transformation is Not Only a Matter of Corporate Survival but Will Also Redefine the Future Landscape of the Global Orthopedic Industry.