Is the spinal market changing? Most of us would think that it is not a very intelligent question since the answer is obvious. Of course is changing! Who does not know that! From our point of view it is not changing very much.
One would say that prices are decreasing dramatically.Another would mention that new technologies are evolving with the 3D printer that allows to manufacture custom-made implants.It is also true that some companies are changing their business models as we saw some days ago with the Royal Oak Medical Devices decision to sell implants without any rep involved ( “Royal Oak Medical Devices’ Unique, “Rep-less” Model Saves Healthcare Providers Hundreds of Thousands of Dollars“).At the same time, there have been many mergers as recently with DePuy-Synthes or Zimmer-Biomet and also many vertical integrations as the acquisition of Branch. Medical by Globus Medical some days ago.
With all the previous evidence who dare to say that the Spinal market is not changing very much? I would say that the change is not dramatic at all!
1) The spinal market technology have not changed very much in the last 20 years. What were we selling in 1995? Screws, rods, cervical plates, and titanium cages.
And today? Basically, screws, rods, cervical plates, peek cages ( and changing back to titanium again!) and some new products as interspinous devices or kyphoplasty that were launched almost 10 years ago!
First evidence: Technology is basically the same.
2) The spinal surgery is complex, difficult to indicate and to implement. Spinal surgeons are not many and Companies have to focus on training, service and relationships. How can a company sell spinal products and give the required service without a sales rep able to understand the surgeon and hospital needs?. This is a business where added value is a key issue and cost reductions in service and distribution will probably lead to a sales loss.
Second evidence: How many companies sell through internet or rep-less? If we check the aproximate number of spinal companies in the market, we can count a number close to 300. How many of them have changed their business model to sell without reps?
3) Very often we hear the comment,” In the near future only a few number of Companies will remain in the market” In the last years we have seen some important acquisitions as Depuy-Synthes, or recently Zimmer-Biomet but the total number of mergers have not been very important if we take into account the total number of companies (more than 300. Visit the SpineCatalogue2015 )
Third evidence: The total amount of Companies far from decrease, in the last years have increased in a significant way.
4) Last but not least: Heavy price reductions! Yes, it is true. But,what about the important implants market volume increase in the last decade? If we combine a product technology that have not evolved in the last years making products more or less ” me-too products” and an increase in volume due to the aging population , the result is prices cut off.
Four evidence: Significant price reductions does not mean that the market is changing but an offer and demand market adaptation.
Probably the spinal market change will come soon but not from a quantitative source but qualitative. How will those changes affect our Spinal Industry. Who knows?