▪ 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.
