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Forum for Discussion
Experts say the orthopedic industry remains positioned for growth.
ODT Staff Report
We’ve all heard the oft-quoted curse that cautions: “May you live interesting times.” The threat is that “interesting times” mean change, challenge and upheaval rather than peace and tranquility.
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“We’re probably in the most challenging time that we’ve ever seen in our lifetimes,” said Rhonda Fellows, senior vice president of Government Affairs, for Arlington, Tenn.-based Wright Medical Technology.
Fellows told attendees that a mix of variables is contributing to the challenge. A new regulatory mood at the U.S. Food and Drug Administration (FDA), healthcare reform and the medical device tax, reimbursement and payment changes, and a slowdown of the global economy, all have made doing business in the orthopedic
sector more difficult.
“This isn’t news,” she said. “But how we respond to it is noteworthy.”
She said the medical device tax, though not yet in effect, is putting a “tremendous burden” on device firms.
“What I hear from every CEO I talk to is that [the tax] is going to hit research and development, hit our employees. We want to keep our employees. It is going to be difficult for small firms—the true innovators—to pay this tax. We need to get behind them and help the startups.”
A grassroots effort would be needed to help repeal or change the structure of the device tax. Fellows encouraged device manufacturers and their suppliers to get involved by reaching out to their elected officials in Washington, D.C., “to help [lawmakers] understand what’s at stake.”
But it’s not all doom and gloom.
Fellows cited a recent study conducted by the American Society for Quality that outlined a positive growth picture for the orthopedic sector. Though it indicated some patients were putting off implant surgeries such as knee and hip as long as possible due to cost, respondents—made up of the association’s members—also noted that orthopedics was among the top three “hot” global markets in medical device. Those surveyed were asked to identify the hottest medical device opportunities in the next three years, and 31.7 percent believe neurological advancements offer the most opportunity, followed by 30 percent identifying the cardiovascular market, and 25.2 percent said orthopedics. “A lot of opportunity remains. There is hope in these survey results,” she said.
There is no true opportunity, however, without a meticulously implemented manufacturing strategy, particularly when companies are balancing outsourcing and quality control.
Ron Clough, vice president of operations for Integra Spine, headquartered in Akron, Ohio, addressed how his firm manages the quality and contract manufacturing processes. Integra, formerly Theken Spine, manufacturers spinal fusion implants including cervical plates, pedicle screw systems, interbody systems and trauma devices.
“Like many device firms, we not only make some of our own products, but use suppliers,” Clough explained. “An awful lot of our success comes from our suppliers. In that supply chain arena, we spend a lot of time auditing our suppliers and auditing ourselves—quality managers, engineers on site.”
Clough said that companies must continue to grow their quality systems as their operations develop and expand, and that each new facility brings unique obstacles to overcome and variables to consider.
“If you have manufacturing facilities outside the U.S. or in multiple states, when you cross state lines, it becomes more complex,” he noted. “When you go across the ocean, things get more complex. Every time you make a move and you grow it gets more complex. That’s why it’s most important that everybody in the organization is part of the quality team. We’re all quality managers.”
The tricky part is ensuring that everyone in the facility is properly trained to be members of the quality team. Clough offered “10 essential elements” of good manufacturing practices (GMP)—from the GMP Institute—that compliant orthopedic manufacturers should follow.
They include:
1. Written standard operating procedures (SOPs)
2. Following written procedures
3. Controlling processes
4. A clean, organized environment
5. Maintenance of equipment and the environment
6. Employee competence
7. Integrate safety, quality and efficient productivity into the process
8. Validating processes and equipment
9. Documentation for compliance and quality
10. Audit for compliance.
“Our primary goal is patient safety. That’s job one for us and for you,” Clough said. “We need to ensure the efficacy of our products and to be sure they are identical every time. That starts with quality and GMP.”
As a parting bit of advice, Clough urged the audience to continually audit for compliance, noting that internal audits are particularly important.
“Do them as often as you feel are necessary,” he advised. “Everybody will be on the same page.” He also said that external auditors to act as FDA representatives are equally critical—perhaps consultants or others who may understand the business.
Speakers continued to emphasize that partnerships, closely maintained and cultivated are key to success.
“As a young company, you never have the manpower or the expertise that you need internally,” said Greg Odle,vice president and general manager of OrthoPediatrics in Warsaw, Ind. “Good people are hard to find, and they’re expensive. As we’ve evolved, we also have partners in a lot of key areas, including engineering, manufacturing, legal, regulatory, financial/accounting, and sales through independent distributors. You’d look at this list and say it’s got to be really expensive to have all of those outside people. My answer is that we’ve done it the other way and struggled. It’s just not possible to find all the manpower and the expertise needed internally to be successful.”
