It's never a shock to hear healthcare is changing. All aspects of the industry continue to advance, grow and develop. Orthopedic and spine device companies are currently contemplating and handling various shifts in the industry.
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Here are 10 key trends in the orthopedic and spine device industry.
1. The shift toward ASCs: Mazor Robotics is among the device companies focused on transitioning physicians and patients from inpatient care settings to outpatient surgery centers and ambulatory surgery centers. In a phone call with shareholders, Mazor Robotics CEO Ori Hadomi, said, "In the U.S., our Renaissance [system] is creating headway into the ambulatory surgery center market and we have initiated a pilot program with a major ASC chain."
2. Building out product portfolios through acquisitions: In the first quarter of 2018 Alphatec diverted from its traditional portfolio of manufacturing widgets and acquired SafeOp Surgical, an automated neuromonitoring technology company. Alphatec now plans to use the new products to enhance its current portfolio, utilizing a porous titanium material.
3. The introduction of biologics: "Our biologics business performed better than expected, down 10 percent versus the hardest comparison quarter we will see this year, and better than the results we had guided to," said NuVasive CEO Gregory Lucier in a conference call to shareholders. Biologics continues to be a pressing issue, with the FDA introducing more regulations and more companies investigating how biologics can boost their implants.
4. 3-D printing is becoming more prevalent and competitive: As more patients expect to receive personalized care, device companies are competing to provide patient, specific 3-D printed implants. K2M CEO Eric Major understands the demand, saying, "3-D printing is one of the hottest areas of spine implant innovation, and K2M was the first leading spine company to market 3-D printed spinal implants."
5. Becoming a standout in robotics and minimally invasive surgery systems: Hospitals are beginning to install more robotic surgery systems to perform various minimally invasive procedures and device companies want to be the dominate provider. However, it's not as simple as going to the hospital and installing systems. Stryker CEO Kevin Lobo understands this challenge. He and his team focus on developing physician champions who can advocate for the robotic system.
6. Trump administration's new tariff on medical devices from China: In April, President Trump imposed a 25 percent tariff on a list of products from China, including orthopedic and fracture appliances as well as artificial joints. The tariff has the potential to affect more than 15 spine and orthopedic device companies who have manufacturing and distribution agreements with China.
7. FDA proposes increasing oversight of artificial joint: To improve medical device government oversight, the FDA considered adding steps in its approval process. The FDA is considering implementing new safety requirements for certain devices and mandating more training for doctors who implant particular high-risk devices. The agency will also explore additional oversight of devices for women, incentives for manufacturers to improve safety and cybersecurity features for electronic devices.
8. Global supply chain changes: As world markets continue to develop and advance, orthopedic and spine device companies are forced to develop strategies about their supply chain models. After Johnson & Johnson saw a 1.1 percent worldwide growth in its orthopedic segment, its CFO Dominic Caruso said, "We plan to implement a series of actions across our global supply chain that are intended to focus our resources and increase investments in critical capabilities, technologies and solutions necessary to manufacture and supply our portfolio. This will enable us to better meet patient and customer needs, make us more agile in a rapidly evolving landscape and drive business growth."
9. Avoiding opioid use after surgery: With the opioid epidemic at the center of conversation, device companies are continuing to develop devices that require minimal opioid use after surgery. Pacira is expanding its nerve block Exparel label, which can reduce opioid use by 72 percent. When used during shoulder surgery, 13 percent of patients opted out of all opioid use.
10. Outcome-based contracts on the rise: Medtronic is among the companies looking to shift its contracts to coincide with healthcare's transition to value-base care. Now, Medtronic is signing outcome-based contracts with customers, adjusting the price of a device on how well it works rather than a fixed price. These risk-based compensation contracts are designed to support transparency and improve outcomes.