What can the independent test labs tell us about the state of innovation within the orthopedics industry? Quite a lot, because these vendors to medical device designers and manufacturers generally only test devices that have not yet come hit the market. I spoke with representatives of six bio-mechanical test labs across the U.S., hoping to tease out trends for what types of medical devices are being tested more as well as the geographic location of these innovators:
- Testing of spinal devices as a proportion of all orthopedics is flat or perhaps slightly down. I’ve talked before about the seemingly dismal prospects for spine, but this field seems to have more legs than I gave it credit for. John McCloy of Accutek Testing predicts that, “Spinal device testing will continue to be healthy for the next 20 years.”
Added Dawn Lissy of Empirical Testing, “As long as there is no real gold standard, the spine industry will continue to see innovation.” Two of the labs specifically mentioned small joints as an area of growth. Other areas mentioned were biologics, partial arthroplasty and sports medicine.
- Most of the labs are seeing explosive growth from non-U.S.-based medical device companies. Countries mentioned by multiple labs include Argentina and Brazil in South America and Europe as a whole.
At first, I thought this might primarily be due to the globalization of the industry or the recognition that U.S. testing labs can provide much faster service than, for example, the European universities, which traditionally did this testing. As Dennis Buchanan from Mar-Test put it, “These devices are spending more time stuck in customs then they do on our test machines.”
European companies are now starting to require the sort of responsiveness that U.S. labs can provide. However, other labs offered different reasons for the increased global flavor of testing, including the weaker dollar and the proposed tax on U.S. medical device manufacturers. An unintended consequence of this proposed legislation might be decreasing the global competitiveness of our medical device manufacturers because of the non-level playing field that it creates.
“I am very worried about innovation shifting out of the U.S.,” said Lisa Ferrara of OrthoKinetic Technologies.
- If medical device companies can be stratified into three sizes (big, medium, and small), the bulk of work is now coming from the middle tier. The credit crunch and drying up of the VC markets seems to be decreasing the number of single product start-ups that need bio-mechanical testing. This situation, coupled with larger companies bringing testing in house or reducing their R&D budgets, seems to be driving the increasing importance of mid-size companies.
- For surgeon-based training, Dave Paller of RIH Orthopaedic Foundation sees fewer “fluff labs, but more with a real focus on education.” Training courses also seem to be more focused on the residents and fellows and less so on the attending.
- The types of bio-mechanical testing projects are changing as well. The labs are seeing better-thought-out protocols (sometimes even before the lab starts!). Pilot labs which can work out some of the bugs in the test protocol are also becoming more popular. As R&D spending becomes tighter and the Food & Drug Administration tightens requirements for regulatory approval, companies are trying to boost the productivity of the testing programs that they do fund.
Time will tell if “testing laboratories are a good leading indicator of the state of innovation within the orthopedic device industry,” as Ryan Siskey of Exponent has it. As of right now, though, this thesis seems to be pretty reasonable, based on this small sampling.