Medtronic plans to divest its orthopedics business after unsuccessful attempts to break into the knee and hip implant arena, according to the Minneapolis / St. Paul Business Journal.
Five things to know:
1. Medtronic acquired Responsive Orthopedics in 2016 and launched a joint replacement unit that aimed to provide low-cost knee and hip implants to hospitals participating in bundled payments.
2. Medtronic spokesperson Brett Cromwell told the Business Journal that the unit was unsuccessful in part because implant pricing became more competitive after federal guidelines shifted. As a result, Medtronic's low-cost options were not as disruptive.
3. The Responsive Orthopedics knee replacement system had a limited release, although Mr. Cromwell said its challenges breaking into the market were not due to quality of care. Medtronic never launched the Responsive Orthopedics hip replacement system.
4. In addition to providing implants, Medtronic's orthopedics business hoped to work with hospitals participating in shared savings programs.
5. Even though Medtronic is leaving the orthopedics business, the Aquamantys business remains active and its spine business is still successful. In the third quarter of the 2019 fiscal year, the company reported flat spine revenue at $655 million.
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