This article is a portion of a book titled "Challenges, Risks and Opportunities in Today's Spine World " edited by Stephen Hochschuler, MD, Frank Phillips, MD, and Richard Fessler, MD. You can find links to the previous chapters at the end of this article.
Industry Trends
Medical device companies continue to introduce innovative and disruptive technologies to the US Spine Market despite decline in price and increase in competition. This chapter will highlight emerging technologies and the headwinds facing the spinal implant industry.
The spinal implant market has experienced single digit growth over the past 10 years and is expected to maintain this growth for the foreseeable future. With more than 200 spine product manufactures, the market is predominantly dominated by Medtronic, Depuy Synthes, Stryker, Nuvasive and Globus Medical. The large tier companies have introduced some new technologies via internal research and development, but the bulk of these new technologies have been acquired from smaller companies. The best example of this trend is seen in the spinal robotic space.
The robotic industry was pioneered by Intuitive Surgical in the early 2000’s with its da Vinci System and has been widely adopted by general, bariatric, cardiac and OBGYN surgeon populations worldwide. In the spine industry, this space is dominated by Medtronic (acquisition of Mazor Robotics in 2018), Globus Medical (acquisition of Excelsis Surgical in 2014) and Zimmer Biomet (acquisition of Rosa Robot in 2016). Globus and Zimmer Biomet acquired the technology in the earlier stages choosing to refine spinal applications inhouse while Medtronic worked separately with Mazor for development before acquisition. This technology is an expensive platform for hospitals to purchase, with the premise of increased accuracy and safety to the patient while reducing operative time and potential complications. These companies, in some instances, have reduced the financial burden to hospitals by providing bundling opportunities and reasonable financing terms. Robotics in spine surgery offer hospitals and surgeons the ability to highlight this “exciting new technology” with marketing efforts. However, in its current state this technology will need more development to truly offer revolutionary breakthroughs in patient treatment.
3D printed spinal implants is another technology that has undergone rapid market development. This market has seen substantial growth as surgeons migrated from PEEK (polyetheretherketone) implant materials back to Titanium. This technology has proliferated as access to 3D printing machines has become more readily available due to continued advancements of the technology and cheaper costs. Manufactures are now able to create more complex designs to better match patient anatomy at a relatively reasonable cost compared to traditional manufacturing methods. Yet, there are still several hurdles and challenges facing this technology. “Patient specific” implants can provide surgeons with a truly “one of a kind” device to treat complex pathology for tumor, trauma and deformity surgeries. The Food and Drug Administration has increased guidance for “patient specific” implants, which has limited universal adoption. Likewise, this just-in-time manufacturing process is extremely costly and subject to 3D machine printing availability, further limiting adoption. Currently, there are only a handful of 3rd party companies who design and manufacture medical grade printers. This is a complex technology requiring experienced engineers and expensive machinery that can total in the millions. Spinal medical device companies are constrained by the limited numbers of these machines and are typically not privy to certain proprietary aspects of the manufacturing process. Spinal implant companies can expect in the future to experience manufacturing delays. Many of these devices are not produced in house and the demand will exceed the supply that can be manufactured efficiently and safely in a timely manner. The available published literature in improved patient outcomes thus far has been subject to low-quality studies that contain inherent biases in this technology.
Market Challenges
Technological innovation in the spinal implant industry must overcome increases in competition from new device manufactures, FDA Guidance and difficulties in seeking product approval in new hospital systems and Group Purchasing Organizations.
With over 200 spine product manufactures in the marketplace, it has become more challenging to create revenue to fund technological innovation. Device companies use different models to create sales channels including a mixture of direct and contract sales representatives and direct to hospital purchase. These challenges make it more difficult for manufactures to find educated and experienced sales representatives to promote their devices. With a growing number of spinal implant companies and hospitals limiting contracted vendors, this will continue to stifle technological innovation advancements. This trend is evident as larger medical device companies continue to acquire technologies at an increasing rate. Device company executives have chosen this route as it is the most efficient way to introduce new, differentiating technologies to their sales forces. Financial constraints have slowed research and development efforts to produce these technologies inhouse. Therefore, the acquisition model has become more attractive to increase revenue to satisfy investors.
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the authors. Any additional information can be directed to the authors at brad@rummer.com
Previous chapters:
Challenges, risks and opportunities in today's spine world
Spine care - Balancing cost with innovation
What are big data and predictive analytics
Predictive Analytics and Machine Learning
The HSS Spine Care Model, Part 1
The HSS Spine Care Model, Part 2
The History of Texas Back Institute
Private practice vs. hospital employee: Where we are today and why
Episodes of care and bundled payments
Episodes of care and bundled payments, a sustainable approach
Dr. Scott Blumenthal on specialty hospitals