Generic Orthopedic Devices Change the Game

Posted by mfontanazza on April 21, 2011

Generic medical devices have been around for several years, but a line of generic orthopedic devices that just entered the market is gaining more attention. Emerge Medical (Denver) launched a line of generic implants and instruments for the $2 billion U.S. orthopaedic trauma market in April as part of a goal of lowering healthcare costs. The company is offering products in trauma and plans to branch out into the rest of the orthopaedics, spine, and sport medicine segments, and from there, take on the entire medical device market.

Cannulated screws manufactured by Emerge Medical.

Emerge Medical’s CEO, John Marotta, calls the concept a game changer and one that the industry needs. “When you’re delivering 510(k) products that have been on the market without intellectual property at a 40–60% savings with manufacturing in the United States, this is healthcare reform,” he says. “When a hospital is on board with us, they signal that they’re ready to commoditize this market.”

Although the response from hospitals has been overwhelmingly positive, industry opinions are another story. “We’re not a popular organization,” says Marotta, a former operator at Synthes. “When you’re marginalizing selling, general, &

Cannulated drill bits manufactured by Emerge Medical.

administrative expenses [SG&A], that means you marginalize the sales reps. It signals where the industry is going, where the market is going, and what’s needed in healthcare.” Since the SG&A in orthopedics is generally higher than in other medical device segments, generic orthopedic devices could be an attractive option for hospitals.

In addition to selling the generic device concept to hospitals by getting rid of the middleman, Emerge Medical is staying competitive by keeping manufacturing in the United States. “We want to keep dollars in our healthcare system and economy,” says Marotta. “We don’t believe that there’s a need to go offshore, because the labor force in U.S. medical device manufacturing is one of the highest and most skilled in the world, so we’re continuing to grow our manufacturing site.” The company is already working with a large network of hospitals and has some big partnership plans in the works. Its next step will be to move into other markets within orthopedics, including possibly total joint replacements.

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