Industry News

Operating on Trust

Orthopedic surgeons certainly have a loyal following. Results of a survey have found that patients undergoing a spinal fusion or joint replacement procedure trust their surgeons to choose the best implant for them. These patients also believe that surgeons’ ties to orthopedic device firms are appropriate and beneficial.

“The relationship between surgeons and the orthopedic industry is essential,” said James D. Capozzi, M.D., chairman of the Ethics Committee for the American Academy of Orthopaedic Surgeons (AAOS). “There always has been and always will be enormous patient benefit when these stakeholders come together. However, when these relationships are not apparent, this can cause patients to question the motivations of an individual or the specialty…”

Lately, federal prosecutors have been the ones questioning the motivations of the orthopedic specialty. Many of those questions have led to the filing of criminal charges against device companies and admissions of wrongdoing from surgeons.

One of the most recent admissions of wrongdoing came from Shekhar Desai of Indialantic, Fla. The 52-year-old admitted last month in U.S. District Court in Newark, N.J., that he submitted fake invoices to DePuy Orthopaedics Inc., a subsidiary of New Brunswick, N.J.-based Johnson & Johnson, for services he never performed in 2004 and 2005. The work included training sessions and operating room services, authorities said.

Desai pleaded guilty to conspiracy to commit wire fraud and faces a maximum five-year prison term and $250,000 fine when he is sentenced June 21. He remains free on $100,000 bail.

The guilty plea stems from a $311 million settlement federal prosecutors reached in 2007 with four orthopedic device manufacturers to resolve allegations they secretly paid off orthopedic surgeons to endorse and use their products. Upon settling the case, U.S. Attorney Chris Christie (who is now New Jersey’s governor) said: “This industry routinely violated the anti-kickback statute by paying physicians for the purpose of exclusively using their products. Prior to our investigation, many orthopedic surgeons in this country made decisions predicated on how much money they could make, choosing which device to implant by going to the highest bidder.”

Patients, however, clearly don’t agree with Christie. Eighty-five percent of patients who participated in a survey presented at last month’s AAOS meeting in New Orleans, La., said they believe their doctor chooses implants based on either familiarity and personal preference or medical research. In addition, three out of four patients disagreed that a surgeon’s choice of implant is based on personal financial gain.

The survey, “Patient Perceptions of Surgeon-Industry Relations,” was presented at the AAOS meeting by Scott C. McGovern, M.D., a specialist in surgical and non-surgical treatment of the spine. “The vast majority of patients in this survey indicate that physician relationships with industry are acceptable and improve health care,” he told the daily edition of AAOS Now, the group’s monthly publication. “They trust their doctors to steer their medical decisions appropriately.”

And that trust is overwhelming. More than eight out of 10 patients in the survey said their doctor truly cares for them as a person and is considerate of their needs.

Though only 40 percent of patients believe that doctors should be paid for an advisory role, more than double that number—82 percent—have no objections to physicians being paid for designing implants. A small number of respondents (10 percent) believe that surgeons should receive an additional payment for each implant that is used, according to the survey.

McGovern and several of his colleagues surveyed 1,000 patients matched by demographics, diagnosis and either spinal fusion or joint implant procedures. The respondents had a median age of 66 years, and 51 percent were men. Spine patients comprised 42 percent of the group, with the remainder receiving hip and knee implants.

SpineGuard Achieves Milestone in its First Year

It didn’t take long for SpineGuard S.A. to reach its first milestone.

Within just 12 months, the company’s signature product—a disposable, wireless surgical instrument called PediGuard—has been used in 10,000 spinal procedures worldwide. The handheld device, which received U.S. Food and Drug Administration approval in 2005, enables surgeons to accurately place pedicle screws during spinal procedures.

PediGuard prevents pedicle screw misplacements by analyzing the electrical conductivity of surrounding tissues in real time through audio and visual signals. The device detects changes in tissue type and alerts surgeons to the change during preparation of the screw site.

“With 10,000 spine procedures performed, PediGuard is becoming a solution to the well-documented clinical need for safer pedicle screw placement in spine surgery,” said Pierre Jérôme, SpineGuard CEO.

The market for pedicle screw-based stabilization devices has been growing in recent years due to the prevalence of spine instabilities and deformities as well as the increasing number of surgeons being trained in pedicle screw-based technologies.

The criticality of pedicle screw placement has been highlighted by published reports showing that high rates of misplacements can lead to such serious complications as quadriplegia.

Headquartered in Paris, France, SpineGuard was founded last year by Jérôme and Stéphane Bette, former executives of Medtronic Sanofer-Danek. The company received $15 million in venture capital funding through July 2009 from four private equity and investment firms.

Coating Company Leasing Facility in Memphis Suburb

Surface Dynamics is heading south. Lured by the promise of a five-year tax break, the coating company has decided to establish a manufacturing facility on the outskirts of Memphis, Tenn.

The Chelsea, Mich.-based company is finalizing the lease of a 14,500-square-foot building in a business park in Bartlett, Tenn., a city of 40,543 residents located 12 miles northeast of Memphis. Money magazine ranked the city 95th in its 2007 annual list of the 100 best places to live in America, saying it “still has the feel of a country town.”

That “country town feel” may have helped initially attract Surface Dynamics to Bartlett, but it certainly wasn’t the driving force behind its decision to locate a manufacturing facility there. Managing Director Roy Smith told The Commercial Appeal that company executives chose to open its newest facility in the Memphis area due to the “concentration of medical device companies and its proximity to customers in other geographies.”

Though Shelby County (the province in which Bartlett is located) is perhaps best known for its ties to the country music industry, it has been gaining recognition in recent years for its growing (and thriving) biotechnology industry. Roughly 5,000 people work at 26 different life sciences firms located in the northeastern part of Shelby County, according to Clay Banks, director of economic development at the Bartlett Area Chamber of Commerce. Those life sciences companies, he said, range from medical device manufacturers to pharmaceutical distributors.

“[Surface Dynamics] will be a good, complementary business to the other medical device manufacturers here,” Banks said in an article that appeared in The Commercial Appeal. “We’re excited about the good wages medical device companies bring with them.”

The 41 employees who will work at Surface Dynamics’ new facility in either sales, administration or light manufacturing will be paid a median wage of $51,063 with benefits, according to the company’s PILOT application. In five years, the company hopes to add 15 workers to its payroll for a projected growth rate of 36.5 percent.

Surface Dynamics will make $200,000 worth of improvements to the building before moving into the space. Company executives expect to begin shipping finished products by early June.

Surface Dynamics is owned by Centara Srl, a small group of Italian investors. The group owns four companies, all specializing in coating either medical devices, airplane parts or power generators.

Reduced Cycle Times Help Stryker Increase its Manufacturing Capability

Advanced CNC (computer numerical control) machining is helping Stryker Corp. reduce cycle times in its surgical tool-making process, leading to increased production output and improved results in research and development.

Since incorporating new CNC machines such as the DMG Model DMC 635 V eco, cycle times at

Stryker System 6 surgical power tools require extremely high precision dimensionality, often down to 0.00015 of an inch (0.004 mm). Photo courtesy of Stryker Corp.

Stryker have fallen more than 20 percent. Such a reduction in cycle times has helped the Kalamazoo, Mich.-based company run more jobs per shift, which consequentially boosts its production output.

“We run families of parts most often. We’re typically running dimensional tolerances down to the ten-thousandths, so it’s very precise work,” said Randy Carpenter, senior project engineer for Stryker Instrument’s production group. “Compared to the older machines and controls, we have tracked our cycle times in relation to our target Cpk’s, and we are getting better than 20 percent reductions. System 6 has become a big seller for Stryker, and our ability to ramp up production on the DMG machines with Siemens numerical controls has been a big plus.”

It certainly has. Sales of medical equipment such as the System 6 tool line are a major source of revenue for Stryker (in 2008, medical equipment sales totaled $2.7 billion—more than one-third of the total revenue for the year, according to Stryker’s 2008 annual report). Thus, increasing the production of medical equipment (through reduced cycle times) can potentially improve both sales volume and revenue.

Reduced cycle times, however, is not the only benefit Stryker has reaped from the DMC 635 V eco. The CNC machines also have helped the firm improve the surface finish of parts, particularly those made with 416 and 17-4 stainless steel, company executives said.

Stryker uses a variety of materials to produce its surgical tools, including 300 and 400 series stainless steels, 6061 aluminum and titanium, and specialty substances such as inconel (a family of austenitic nickel-chromium-based superalloys), nitinol and ALG alloys. The company also machines thermoplastics elastomers and thermoplastics such as delrin, ABS (Acrylonitrile Butadiene Styrene ) and Teflon.

The CNC machines that help turn these materials into components for medical equipment are used mostly by Stryker’s Experimental Group, which investigates new technologies, advanced materials and various manufacturing protocols. The group provides components to Stryker R&D engineers for testing and evaluation, including prototypes of surgical tools for field evaluation and feedback from surgeons.

The DMC 635 V eco used by the Experimental Group is a three-axis vertical milling center with an 8000 rpm spindle and a 20-position tool changer. The machines are equipped with Siemens Sinumerik 810D CNC and ShopMill software that incorporate graphic depictions for specific data inputs, thereby reducing the learning curve for the engineers that operate the machines.

Program transfer from the Styrker computer network to the CNC is fast and simple, Mitchell added. Operators write and run multiple programs through each CNC daily, eliminating the need to enter and edit setup data into the machines. As a result, the Experimental Group has significantly improved its turnaround times, Mitchell claimed.

“We currently have four other controls in our milling department so it’s easy to imagine the challenges our guys face daily,” he noted. “The Siemens numerical control has worked well for us…as we expand or replace current milling technology in our production, we will most likely transition to a Siemens 840D with a Renishaw touch probe and tool presetter to expedite setups,” said Rich Mitchell, Experimental Group supervisor.