The Right Formula

What does it take to bring a safe, effective—not to mention financially successful—orthopedic device to market? This question, directly and indirectly, is explored in every issue of Orthopedic Design & Technology. It’s no easy task to find the winning formula. If it were easy, everyone would do it—right? And as the medical device industry matures, the challenges seem to mount.
   
There’s more competition in areas that used to be dominated by just a few players. Take the spine market, for example. Medtronic is the dominant player in the sector, but companies such as NuVasive, Orthofix and Osteotech are nipping at the big guys’ heels.
   
Tighter controls at the FDA, particularly in a post-heparin manufacturing environment, mean greater compliance and quality processes must be put in place and managed. Orthopedic companies certainly don’t have to be reminded about government scrutiny. As a lengthy DOJ investigation into orthopedic firms’ business relationships with physicians wrapped up last year, the SEC began its own inquiries, and the scrutiny on Capitol Hill continues as lawmakers ponder legislative reforms.
   
With product approvals, some FDA review processes are getting faster, but on the flip side, the agency’s focus on post-market surveillance can mean an added level of complexity. The FDA is even requiring some 510(k) applications—the typical approval course for “me too” medical devices—to have extensive clinical trial data. Clinical trials typically only are required for 10% of 510(k) submissions, according to the agency, but some consumer interest groups have been pushing for more rigorous requirements. All this means good things for patients, of course, but it’s yet one more variable in a very long list of to-dos that must be managed by device makers. Reimbursement also has become a significant barrier to market entry or to continued success with established product lines.
   
International and emerging markets are a blessing and a curse. They represent seas of untapped end users, boosting possible sources for revenue. But beyond selling abroad, there are logistical and supply chain challenges, as well as intellectual property and quality issues that need to be addressed should a company choose to manufacture overseas. That said, many companies—startups in particular—based in the United States have decided to tackle gaining approval and selling abroad before tackling the process in the United States in the hopes that the knowledge gained will make the process easier when they pursue commercialization here at home.
   
What’s the point? Certainly not merely to provide a laundry list of barriers to success, but to put the clinical and commercial successes (and some stumbles) of the firms in this year’s Top Companies report (on page 37) in context. As you read this year’s compilation, you’ll note that all of these firms have dealt with the issues mentioned above and then some. Though it can be difficult to see the successes among news of recalls, lawsuits, investigations, buyouts, etc., ultimately there’s a lot more good than bad to report.

Christopher Delporte
Group Editor