Ortho Firm Arthrex Nabs $255M Defense Deal

Orthopedic device company Arthrex Inc. has landed a $255 million contract from the U.S. Department of Defense.

The five-year contract authorizes Arthrex to sell "medical devices and accessories" to the Army, Navy, Air Force, Marine Corps, and federal civilian agencies. The government contract notice did not describe the items further.

Arthrex competed against 57 companies for the contract, issued by the Defense Logistics Agency Troop Support unit in Philadelphia. The company will make the products in Florida, with a completion date of August 28, 2019, the notice said. The contract allows for economic price adjustments but has no option for extension.

"The contract awarded to Arthrex is for orthopedic items used in surgery," Stacey Hajdak, spokesperson for the Philadelphia troop support unit, wrote in an email. "The guaranteed minimum is $85,000 and the contract estimate is $17 million per year for five years."

The military services order items from the unit's medical electronic catalog, which will now include 6000 Arthrex products, as well as products from other vendors. The troop support unit is evaluating other bids, according to Hajdak.

This is the first contract DLA Troop Support has awarded to Arthrex. The private, Naples, FL-based company specializes in minimally invasive arthroscopic devices and has developed more than 7500 products and surgical procedures, according to its website.

Arthrex designs and manufactures orthopedic devices, orthobiologics for use with tissue, blood products, and bone, and products for imaging and resection. The company manufactures 94% of its products domestically, and exports to more than 100 countries.

The Arthrex contract is among the latest that DOD has given to a medtech company. In August, Qmed.com reported that the agency awarded a $20 million contract to Abbott Laboratories to improve traumatic brain injury testing for military personnel.

A Pentagon report details that the $19.5 million agreement calls on Abbott Park, IL-based Abbott to assess and verify biomarkers that reveal mild TBI. This would lead to developing tests for brain injury on the Abbott i-Stat, a device already used by the military health system.

The agreement includes $3.9 million in research, development, test and evaluation funds for fiscal 2014. The Pentagon solicited and received bidding for the contract from Abbott alone. Work is estimated to finish August 12, 2016 with manufacturing by plants in Ottawa, Canada; Chicago, Illinois; and Princeton, NJ.

The company received the Medical Design Excellence Award from UBM Canon LLC in 2009 and made the Inc. magazine 5000 list of America's Fastest Growing Private Companies in 2011.

Nancy Crotti is a contributor to Qmed and MPMN.

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