11.17.06
Orthopedic Technology: Growth at the Speed of Business
I
nnovation and new market opportunities take center stage at the first ODT conference and exhibition.
Christopher Delporte
New technology, new methods and new opportunity. Those themes were carried throughout the inaugural Orthopedic Design & Technology Conference and Exhibition. The event kicked off on Monday, Oct. 17 with remarks from Richard Graham, mayor of Fort Wayne, IN, the event’s host city. More than 300 attendees, including representatives from 65 exhibitors, participated in the two-day program.
Graham told attendees that the conference and the orthopedic sector in the area followed in the city’s long tradition of firsts in manufacturing, citing Fort Wayne as the home of the first hand-held calculator, among other inventions.
Indiana Governor Mitch Daniels told a lunchtime gathering: “Indiana embraces this industry and all that it represents. Life sciences is central to the strategy we have set out for ourselves.” |
Tuesday’s keynote address was presented by Robin Young, founder and president of RRY Publications and Robin Young Consulting Group, a firm specializing in evaluating the orthopedic industry.
Young, who has more than two decades of experience as an industry analyst, was bullish about growth prospects, though he cautioned attendees not to expect the 15%-20% expansion experienced in the recent past by the large-joint sector of the industry. Knee and hip replacements have grown at about 7% since the latter half of last year, which is where he expects them to remain for the foreseeable future. He said spine was now the largest market segment and the fastest growing at nearly $6 billion in 2006. Three procedures accounted for 94% of spinal implants, but innovation will increase treatment choices, according to Young.
He said the orthopedics industry sold approximately $25 billion in goods and services in 2005, with seven dominant companies selling more than $1 billion. Roughly 1,500 companies sell some form of product or service to the global orthopedics industry, Young said.
The first ODT Conference and Exhibition brought together more than 300 manufacturers, suppliers, venture capitalists and industry analysts to network, attend educational sessions and discuss the latest trends affecting the orthopedic innovation. |
The trauma market is the “hidden gem” in orthopedics as far as opportunity, Young told the audience. There’s been 14% market growth between 2005 and 2006. “It’s the most dynamic, with the most opportunity. There’s a lot happening in trauma,” he said.
Young also pointed to a “shift” in the locus of regulatory power from the FDA to the Centers for Medicare and Medicaid Services (CMS). The CMS focus on coverage with evidence development and power over physician and hospital reimbursement rates has a direct impact on the orthopedic sector’s bottom line.
“For the first time in history, the regulators have more and better data than manufacturers,” he said.
A Pro-Business Climate
According to members of a panel covering venture capital and its role in the future of orthopedics, the industry is attractive to start-up companies.
“We see a lot of hip and knee companies,” said John McCormick, managing director of Healthpoint Capital, LLC. “But there are a lot of innovators and start-ups in the spine and orthobiologics space.”
David Johnson, president and CEO of BioCrossroads, agreed. “We see more entrepreneurial culture in orthopedics than any other in this state,” he said of sector growth in Indiana. BioCrossroads is an Indiana-based public-private collaboration that supports the region’s biotechnology industry and encourages new business development.
Indiana Governor Mitch Daniels also joined Tuesday’s program with a lunchtime address to attendees. The governor’s business-friendly pitch thanked the orthopedic industry for “calling Indiana home.” He said the state is working hard to create an environment for med-tech growth. The governor, who is a former executive with Indianapolis-based pharmaceutical company Eli Lilly & Co., had been in Warsaw, IN the day before for the announcement of a significant facility expansion by Biomet.
“We’re a low-cost, pro-growth state,” Daniels said. “Indiana embraces this industry and appreciates its support. We’re going to operate at the speed of business, not the speed of government. We’re going to encourage start-up business, and there will be more venture capital in this state.”
The Big Picture
To provide a little end-user perspective to all the talk of manufacturing, a live surgery was performed on Wednesday morning and broadcast live to the conference on a theater-sized screen providing a surgeon’s eye view. The minimally invasive knee surgery was conducted by William Berghoff, MD at the local Orthopaedic Hospital at Parkview North.
Berghoff used a Biomet knee for the procedure, though he said he uses Zimmer and DePuy products just as often. “In this area, you always have a patient who’s got a cousin Bob who works for Zimmer, a relative at Biomet or something like that,” he said. “So they come in asking for replacements by name.”
Berghoff told the audience that he’s watched as orthopedic companies have adapted quickly to incorporate new technology and respond to market and patient needs.
“Now we have eight or nine sizes to choose from, where there used to be only three or four,” he said. “There are also gender-specific implants. That’s good news for the patient.”