08.05.15
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By now, the orthopedic device industry has had ample time to adjust to its “new normal.” Implant firms have had years, really, to revamp their business models to jumpstart growth, but progress has been tortoise-like—hampered by lingering Affordable Care Act uncertainty, new federal regulations, hospital consolidations, purchasing decision instability, fickle reimbursement rates and demands for values-based solutions. Nevertheless, medtech manufacturers realize that future profits depend on their ability to evolve with the market, and many have begun their metamorphoses, whether it be through acquisition (Medtronic-Covidien, Zimmer-Biomet, Smith & Nephew-ArthroCare), partnerships (Novartis-Google[x]), restructuring or redefining innovation. As one healthcare CEO noted, “Innovation is broader than delivering the next breakthrough product. It is about partnering with physicians, hospitals, payers, patients and our communities to challenge conventional thinking and create medical solutions that save and improve millions of lives worldwide—while reducing healthcare costs for all.”
The key to success, of course, lies in the industry’s ability to buck tradition—which historically, has been a virtual sacrilege among implant manufacturers. But disruptive change is underway. Companies no longer will be able to earn premium margins by simply selling clinical features and new products into established market spaces. Rather, they will need to look at new segments and, particularly, new end-to-end solutions to secure additional revenue and maintain margins, contends an A.T. Kearney report on forces currently shaping the medical device industry.
“While the future contours of the medical device industry remain to be defined, radical change is inevitable, and the companies who embrace it will both shape the industry and profit from it,” said Dave Powell, A.T. Kearney partner and study co-author. “Executives should urgently be evaluating the impact of disruptors and using this information to determine what capabilities and resources they will need to build a distinctive business model that will enable them to compete in the future.”
Time is wasting.
Top 10 Orthopedic Device Companies
Contributors
Editorial Director, Medical Devices: Christopher Delporte
Managing Editor: Michael Barbella
Associate Editor: Ranica Arrowsmith
By now, the orthopedic device industry has had ample time to adjust to its “new normal.” Implant firms have had years, really, to revamp their business models to jumpstart growth, but progress has been tortoise-like—hampered by lingering Affordable Care Act uncertainty, new federal regulations, hospital consolidations, purchasing decision instability, fickle reimbursement rates and demands for values-based solutions. Nevertheless, medtech manufacturers realize that future profits depend on their ability to evolve with the market, and many have begun their metamorphoses, whether it be through acquisition (Medtronic-Covidien, Zimmer-Biomet, Smith & Nephew-ArthroCare), partnerships (Novartis-Google[x]), restructuring or redefining innovation. As one healthcare CEO noted, “Innovation is broader than delivering the next breakthrough product. It is about partnering with physicians, hospitals, payers, patients and our communities to challenge conventional thinking and create medical solutions that save and improve millions of lives worldwide—while reducing healthcare costs for all.”
The key to success, of course, lies in the industry’s ability to buck tradition—which historically, has been a virtual sacrilege among implant manufacturers. But disruptive change is underway. Companies no longer will be able to earn premium margins by simply selling clinical features and new products into established market spaces. Rather, they will need to look at new segments and, particularly, new end-to-end solutions to secure additional revenue and maintain margins, contends an A.T. Kearney report on forces currently shaping the medical device industry.
“While the future contours of the medical device industry remain to be defined, radical change is inevitable, and the companies who embrace it will both shape the industry and profit from it,” said Dave Powell, A.T. Kearney partner and study co-author. “Executives should urgently be evaluating the impact of disruptors and using this information to determine what capabilities and resources they will need to build a distinctive business model that will enable them to compete in the future.”
Time is wasting.
Top 10 Orthopedic Device Companies
1. | DePuy Synthes | $9.67 billion |
1. | Stryker | $9.67 billion |
3. | Zimmer | $4.67 billion |
4. | Smith & Nephew | $4.62 billion |
5. | Biomet | $3.22 billion |
6. | Medtronic Spinal | $3.04 billion |
7. | DJO Global | $1.23 billion |
8. | Integra LifeSciences | $928 million |
9. | NuVasive | $762 million |
10. | Globus Medical | $474 million |
Contributors
Editorial Director, Medical Devices: Christopher Delporte
Managing Editor: Michael Barbella
Associate Editor: Ranica Arrowsmith