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Nick Deeter is no stranger to orthopedics. The founder of OrthoPediatrics got his start with Zimmer 30 years ago, and has also spent time in DePuy’s healthcare compliance administration, founded Case Western University’s tech transfer program, served as president for venture capital firm Medical Ventures Ltd., and founded another company, ViAtro, an infection control device firm. With that level of experience, its no wonder Deeter has been able to prove to FDA and to pediatric surgeons, that developing orthopedic products for children is a worthwhile business model.
June 5, 2013
3 Min Read
Of course, with humility, Deeter told attendees of the Orthotec Conference (June, 5-6, Winona Lake, IN) that the company doesn’t really have much competition. Deeter noted in his keynote presentation that big ortho players have largely stayed away from products for children, and that with few exceptions, before 2007 (when OrthoPediatrics was founded) surgeons were either using archaic leg braces, or bending, sawing, and otherwise adjusting adult-sized implant products to use for children.
And, Deeter said, “Children are not simply small adults.” There are fundamental differences in anatomy that make using adult ortho products undesirable and even unsafe. Further, the surgeons who were manipulating adult products for children were doing so off-label—meaning that FDA couldn’t track or regulate the use of such devices to protect patient safety.
The problem was of growing concern, not just to Deeter, but also to Congress and FDA. In 2007, Deeter, a life-long Midwesterner started sending notes to Connecticut Senator Chris Dodd (D). At the time, Dodd had just introduced S. 830, the Pediatric Medical Device Safety and Improvement Act of 2007.
Then, when he got no response, Deeter happened to run into Dodd in Washington, D.C., and went up to introduce himself, while wearing the OrthoPediatrics company shirt. Dodd recognized him and promised to make some calls to FDA, whom Deeter was meeting with the next day. What Deeter thought was going to be a mid-level meeting turned into a powwow with top FDA reviewers, then CDRH head, Daniel Schultz, and even then FDA commissioner, Andrew von Eschenbach. “No one meets the commissioner,” exclaimed Deeter.
From that point, OrthoPediatrics became a collaborator with FDA on protocol development and approval process for pediatric orthopedic devices. To date, all 15 of OrthoPediatrics devices that have been submitted to CDRH have been cleared within 90 days, Deeter told attendees.
Of course, this is a case of right place, right time, Deeter admits. But from a business perspective, it also shows that perseverance and a willingness to champion an underserved market can be a big asset to a company that is looking to be innovative.
The pediatrics market for orthopedic is valued at 2.6 million, with little competiion. The company is family- and friend-funded. And OrthoPediatrics also enjoys some additional perks: because the devices are developed for children, 510(k) submissions are free, and because the products are used primarily in charity hospitals, OrthoPediatrics didn’t have to come up with an in-depth reimbursement plan. What it needed was FDA support, and thanks to Deeter’s determination back in 2007, it has that.
Deeter continues to look for opportunities to help children and make the business successful. OrthoPediatrics has already gone global, in reaction to the device tax. “We figured it would help us expand out margins, since the device tax only applies to devices sold in the U.S.—and the strategy has worked out very well for us.”
As an aside, Deeter said that the device excise tax is really an excuse for companies to do what they were planning to do anyway. However, he noted the real problem is that “taxes don’t really go away, and they always go up.”
Its likely we’ll here more from this innovative firm, as the company continues to develop implants that aim to help children with orthopedic diseases.
—Heather Thompson is editor-in-chief of MD+DI.
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