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Read more for five noteworthy developments in the budding orthopedic and spine devicemaker industry.

▪ Growth of gender specific implants. Gender-specific devices, or devices designed with the female anatomy in mind, are in-vogue since the first such device, a knee implant designed specifically for the female anatomy, was approved by the FDA in 2006. The demand for gender-specific knee implants in particular is high and expected to increase. Over 400,000 knee replacements are performed in the United States each year and two-thirds of knee replacement patients are women. Although knee replacements are the first foray into gender-specific devices, it is expected that orthopedic devices for hips, shoulders and other parts will continue to be developed and marketed.

▪ Debate over minimally invasive surgery. New approaches to joint replacement are publicized as superior because they are minimally invasive. Minimally invasive, in simple terms, means making an incision that is much smaller than those made in traditional joint replacement surgery, usually measured as one-half the traditional size incision or less. While minimally invasive procedures are generally desirable, this marketing claim raises certain issues.  

The purported core positives to minimally invasive procedures are that they can lead to better cosmetics, less discomfort and less blood loss. On the negative side, such techniques can impair the surgeon’s visual field, provide for limited implant and device choices and lead to certain other challenges. There are also other longer-term uncertainties that are still being explored.

▪ Increase in implant costs. The growth in the number of different implant products available also has increased costs, as noted by Dr. John Barnard of the Orthopedic Center of Central Virginia. Physicians have to sift through an increased volume of information to determine the optimal approach for their patients, and this learning curve takes time. With the competition among the devicemakers and the anticipated growth in demand for implants, this trend is likely to continue.

▪ Surge in devicemaker IPOs. Devicemakers are capitalizing on the demand for joint replacements through an increased number of initial public offerings (IPOs). Last year was a record year for IPOs for healthcare providers, devicemakers and technology companies. From January to November 2007, eleven device companies filed plans for IPOs. MedAssets was the latest example in December 2007.

▪ Concerns over potential Anti-Kickback. Several well-publicized legal cases highlight the risks devicemakers face. Although these manufacturers must necessarily market their products to physicians who decide which devices to use, the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)(1)(B), constrains the manufacturers’ business practices in trying to promote their products.

One recent example of this legal risk is the indictment of Arkansas neurosurgeon Dr. Patrick Chan for violation of the federal Anti-Kickback Statute. The four-count indictment was filed in the United States District Court for the Eastern District of Arkansas in October 2006. The indictment charged that from January 2004 until June 28, 2006, Dr. Chan demanded that distributors for four medical supply companies pay him 50% of their commissions on the sales of any products he used in his neurosurgery practice. The indictment alleges that Dr. Chan received approximately $7,000 to $8,000 per month for two and a half years. On January 3, 2008, Dr. Chan pled guilty to one count of violating the Anti-Kickback statute and is awaiting sentencing.

Note: This article shares just a few of the thoughts and insights from a larger article discussing the events shaping this rapidly growing industry that will appear in the May/June issues of Becker's ASC Review. The longer article also discusses new spine devices, conflict of interest, and the ramifications of the recent Supreme Court ruling in the Riegel v. Medtronic case.