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Home » Docs doubt ‘repless’ sales model for medical devices

Docs doubt ‘repless’ sales model for medical devices

March 18, 2015 By Brad Perriello

Docs doubt 'repless' sales model for medical devices

A pair of high-volume orthopedists who specialize in hip and knee replacement surgeries are skeptical of generic or "repless" sales models, in which medical device companies offer lower-cost implants without a sales rep on hand to advise during the procedure.

The specialists, 1 on the East Coast and 1 on the West Coast, were queried by Leerink Partners analyst Richard Newitter ahead of the American Academy of Orthopedic Surgeons meeting in Las Vegas next week. The response was mixed when Newitter asked the physicians about Smith & Nephew‘s (NYSE:SNN) repless Syncera program, Newitter wrote yesterday in a note to investors.

"The East Coast doc thinks a ‘rep-less’ model might have a place in outpatient surgical centers that already perform same-day arthroplasty. However, based on his experience (a pilot at his institution), he is less optimistic this model can work in an academic setting, where OR staff experience/training levels can vary greatly depending on the time of day," Newitter wrote.

"The West Coast doc was even less inclined toward going rep-less because he likes the safety net rep support provides, and he indicated that he uses SNN in ~80% of his knee cases, in large part because of the rep service. He also noted his institution is not keen on this model at the moment after a local nearby university attempted to implement something similar and saw increased faculty departures," he wrote.

Repless sales models are aimed at lowering hospitals’ costs. Royal Oak Medical Devices claims it can save its hospital customers more than $100,000 a year on their orthopedic implant spends, using its so-called ‘repless’ generic sales model.

Earlier this year Smith & Nephew CEO Olivier Bohoun touted his company’s Syncera pilot as "disruptive of the commercial model," noting that the British orthopedic maker is seeing profit margins "equivalent with the classic old-style [hip and knee] business."

Syncera is in its pilot phase in limited hospitals in the U.S., with Bohuon saying that hospitals performing 700 procedures a year with the Syncera system will save an average of about $4 million in cash over 3 years.

Wright Medical launched a pilot program in 2013 called WrightDirect that eschewed a traditional sales model for a more collaborative, "turn-key" approach with C-level executives at a select number of U.S hospitals. WrightDirect was sold along with the company’s hip and knee business last year to China’s Microport.

But Stryker CEO Kevin Lobo is skeptical of so-called "repless" generic sales models for orthopedic procedures.

"I look at a generic model very skeptically, regardless of which company is offering it," Lobo said in January. "Until these procedures are de-skilled it’s very hard to imagine [not having] the sales force and the services that we provide in the hospitals. If you don’t have that, the operating rooms just don’t flow effectively and efficiently. I don’t know when they launched their initially but we are not seeing it in any meaningful way in the market."

Filed Under: News Well, Orthopedics Tagged With: Leerink Partners, Royal Oak Medical Devices, Sales, Smith & Nephew, Stryker, wrightmedical

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