Trauma Market Focuses on New Solutions, Shifts in Care Delivery

Posted in Research to Reality | Nov 2015

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Tags: medical device developmentfracturemedical device innovationambulatory surgery centersdesign & developmentbundled paymentepisode of care

Trends in the trauma market, the third largest segment in the orthopaedic industry, center on new technologies and treatment methods such as minimally invasive techniques and the use of orthobiologics. Advancements in product offerings aside, shifts in the healthcare delivery system, characterized by changes in decision-making power at healthcare facilities and the growing popularity of outpatient care, also affect this segment.

To take a closer look at these trends, ORTHOPRENEUR consulted several device manufacturers.

Participants included:
Manny Avila, President & CEO, IlluminOss
Eric J. Dickson, Global Director of Business Development, Extremities, Tyber Medical
EJ Duffy, Founder & CEO, Impact Medical
Amir Matityahu, M.D., Founder & CEO, Epix Orthopaedic

ORTHOPRENEUR: What trends do you see in the trauma/fracture repair market?

Manny Avila-web

Avila:
What I hear from surgeons and what we’re trying to fulfill is the need to be more minimally invasive with procedures for patients, and find a way to minimize the additional time that patients are spending in the hospital after surgery. They [surgeons] talk about wanting new materials and innovation to support that. They’re always looking at decreasing the cost of technology and improving patient outcomes.




Dickson:
We continue to see advancement in anatomical implants (3D manufacturing) that can really -- in high-energy trauma – put the patient back to their exact anatomical figure for alignment. I see several companies coming out with more radiolucent and expanding implants, and distal targeting systems for nails – everybody’s trying to perfect that, to advance in the ease of use and care for the patient and the surgeon. I don’t believe I’ve seen robotics as of yet, but I think that will be coming in the future, like nailing systems.

EJ Duffy_Headshot-webDuffy: One of the biggest trends right now is that insurance companies are moving to bundled reimbursements. This changing marketplace is helping to assist doctors/hospitals and surgery centers to hold their vendors and suppliers more economically accountable, ultimately benefiting the patients and their co-pays. This supersedes all the other reimbursement trends that we are seeing at this time.

Another large trend that we are witnessing is the number of surgeries performed at ASCs. Doctors are moving away from hospitals because of the reduction in annual patient reimbursement. Doctors have to perform more surgeries at an ASC to keep existing profit margins. Ten years ago, you would never have heard of having a total joint replacement or spinal procedure at a surgery center.


Matityahu-Head-shot-webMatityahu: The trends we’re seeing in hardware are implants that are giving doctors more options to do their jobs better. Some people are playing with material changes, like carbon fiber versus titanium, and different kinds of configurations of screws.

One of the biggest issues is that, some of the big companies are not innovating. They’re just making incremental changes and the risk is upon the smaller companies and start-ups to create innovative changes. If it pans out, the bigger companies are either investing in or buying them.

The major unmet needs are actually helping the doctor do his job, in straightening the fracture before insertion of implants. What companies do is they give you an implant and some reduction tools, but they’re not addressing the hardest part of the surgery, which is, How do I straighten out the bone so I can put the implant on an anatomically straightened bone? Companies are not focused on that because that doesn’t sell. They’re selling an implant, which helps the bottom line. If they make the reduction tool to straighten out the bone, that’s part of the instrument set, and it costs money.


ORTHOPRENEUR: What recent products have you launched or developed in response to surgeons’ requests?

Avila: Our company is founded on an orthopaedic implant that’s designed to be minimally invasive. It’s a deflated balloon that fits into the intramedullary canal, and then infused with monomer and cured in place. Our solution is one that doesn’t require any additional patient trauma. To treat a fracture, we go in through a small incision and introduce the implant. It’s customized to the patient, then cures and provides immediate stability versus having to dissect soft tissue and muscle. We don’t move nerves and tendons around.

That’s the only product we have right now. We have different versions that fit different bone fracture locations, but it’s the same product. We’re currently in U.S. clinical trials to get approval to sell in the U.S. Our goal is to get through clinical trials and commercialize in the U.S. in 2017.

Dickson: We’re developing our complete line of trauma screws. We are going to come out with some headed and snap off screws with a wide range of sizes, which will be added to our line of headless screws. These products, as well as others will be available in the near future with our surface modification nanotechnology. We believe this technology will prevent infections of biofilm attaching to a foreign body. You’re not going to have another foreign body attaching to a foreign body that’s already implanted – it is difficult to fight an infection that’s already attached to a foreign body that’s already in your body.

Duffy: Our surgeons are requesting high quality implants at a reduced cost. In addition to our standard $15 3.5mm cortex screw, our most requested product is our $90 cannulated screw. Our aggressive pricing allows us to bring our $90 cannulated screw to the marketplace; it has been proven to fundamentally reduce the cost to care providers anywhere from 30 to 80 percent. The result allows the ASC/hospital to keep overhead much lower than their competition while still offering high quality products – a win/win for the patient, surgeon and facility.

Matityahu: Hip fracture is the most common fracture that is surgically treated in the world. The nails to treat this are static Cephalomedullary nails. These nails can fail ten to 20 percent of the time. That is more than 10,000 cases per year. A lag screw goes through a cannulated rod, up into the femoral head, then fixes the fracture. Realigning the bone into an anatomical location out of varus and placing the lag screw that goes up in the femoral head in the right position are the most important things you need to do to have a successful outcome. No implant, to date, has the ability to help the surgeon as an implant and a reduction tool. In 2007, we conceived the idea to solve these two problems. We designed a variable angle nail (VAN) implant that does two things. First, the surgeon can place the screw in the femoral head and dial in exactly where that screw needs to be without the implant constraining him/her. Secondly, the VAN is an implant and a reduction device. The surgeon can insert the implant into the femur and if the bone is not exactly where you want it to be, it takes three seconds to move the bone to the correct position.

It’s FDA cleared, but not on the market yet. It will be on the market in1Q16.

This product is the first of its kind. It is a smarter implant that we think is going to be differentiating because the majority of implants in our space are “me-too” products. They have little bells and whistles that are different from manufacturer to manufacturer, but basically they’re all the same.

               

 


Patrick Sweeney, M.D., Owner and CEO of Flow-FX, weighed in on the emergence of orthobiologics in the fracture repair market. His insight follows.

“I think the future is clearly centered on the increasing sophistication of biologics and their delivery.

“Most fixation concerns have been addressed by many brilliant doctors and engineers over the last 70 years. The bulk of remaining orthopaedic trauma concerns focus on osteoporosis, chronic infections, complex fractures and non-unions. We believe that the delivery of biologics, stem cell products, antibiotics and pain medication through implants is the most efficacious way to address these issues.

“Toward that goal, our first 510(k) cleared products, the Flow-Nail and Flow-Screw, are indicated for delivery of certain bone void fillers in addition to their primary function as fixation devices. In the near future, we plan to fund research regarding intraosseous delivery of antibiotics to chronic infections, as well as growth factor micro infusion to non-unions through our patented implants.”

 


ORTHOPRENEUR: What challenges have you faced in meeting the needs of your surgeon customers?

Avila: Cost pressures from the hospital administration. There’s tremendous pressure to reduce costs to support patients. They’re [surgeons] concerned about the end result and the cost of technology relative to everything else on the market today.

Dickson: We’re a private labeler, so we see a lot of companies requesting a lot of products that we don’t have to fill their product portfolio. Surgeons continue to want more products from the companies they work with, and sometimes that’s just not feasible because of the expense to get something through FDA and have a price point at which a company can be profitable. Surgeons want advanced products, but then we’re getting pricing pressure from the hospitals and insurance companies, so it’s getting harder to have unique products due to the cost to get one approved and then having a price point to be profitable.

Duffy: The biggest challenge with our customers is meeting their needs with additional products. I can’t tell you the amount of times we receive phone calls from existing customers saying, “We enjoy buying these products from you because they’re aggressively priced. When are you going to make a 2.7mm cortex screw? Or a 7.3mm cannulated screw?” Our overall goal is to bring more specialized products to the marketplace. We have proven that our products are reasonably priced; we just need to increase our product line using the same strategy.

Another challenge we face is competing with large, billion-dollar corporations. At the ASC level, it is really not a concern and we rarely get any pushback regarding existing contracts. However, at the hospital, we hear it all the time. ASCs are typically physician-owned, therefore they make the financial decisions. These physicians see what things cost and they’re willing to make that economic decision. The hospitals aren’t there yet and that needs to change. In today’s world, with bundled reimbursement, Obamacare, CCOs and Medicare where cost is an issue, the market is due for a correction, and we are excited about where we are at.

Matityahu: Our hurdle is distribution and getting into hospitals to make this implant available, and build an inventory. All of that takes money and time. For a small company, you’re creating all those systems, so you need the financial backing to do that. Everything is more expensive for a smaller company because they can’t afford to have systems in-house.

The hurdles aren’t the mechanics of the implant and how the implant works, but instead commercialization problems. They’re pushing up against a ceiling, and the ceiling is created by companies that have a huge distribution network. Moreover, in the operating room there is a sales rep who says, ”Why would you use that? You’re good enough that you don’t need to; you should use this.” They’re using sales tactics, which is obviously fair game. A lot of it is relationship based.

There are two long-term trajectories for small companies:

1.  Acquisition at some point.
2.  Build your company around your core product and expand your portfolio either organically or with outside resources.
 

Hannah Corcoran is Editorial & Media Assistant at ORTHOWORLD. She can be reached by This e-mail address is being protected from spambots. You need JavaScript enabled to view it .