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Regulatory

510(k) Q&A: How Many Ex-U.S.-Headquartered Companies Recently Received FDA Clearance?

By Carolyn LaWell

Recent conversations surrounding international interest in the U.S. market led us to consider how many ex-U.S.-headquartered companies have achieved an orthopaedic-related 510(k) clearance in recent years.

To investigate, we pulled orthopaedic FDA 510(k) clearances from FDA’s database for the years 2012 through 2016. The exhibits below were compiled after a little tweaking of the raw data. (For example, Howmedica Osteonics, acquired by Stryker in 1998, was listed 11 times. We moved those clearances under Stryker. Tornier’s clearances were marked under France until the company was acquired by Wright Medical, when the 510(k)s were then moved under Wright and the U.S. We did the same for other acquired companies where appropriate.)

The data in Exhibit 1 shows that the percent of clearances by U.S. companies has stayed consistent at around 74% of 510(k)s, with increases to 78% in 2013 and 80% in 2014. The percent of U.S. companies receiving clearances dropped from 72% in 2012 to 65.9% in 2015, then increased to 67.7% in 2016. Since the percent of clearances remained at 74% for three of the five years, we attribute the drop in companies to merger and acquisition activity. While fewer U.S. companies achieved clearance, those that were successful are larger and, presumably, have more robust resources to push products through the regulatory pathway; therefore, the percent of clearances has remained steady.
 

Exhibit 1: Number of 510(k)s Cleared and Number of Companies that Received Clearance by Country Between 2012 and 2016

 

2012

2013

2014

2015

2016

 

# 510(k)s

# Cos.

# 510(k)s

# Cos.

# 510(k)s

# Cos.

# 510(k)s

# Cos.

# 510(k)s

# Cos.

 Australia

2

2

1

1

1

1

2

2

3

1

 Austria

 

 

2

1

2

1

 

 

 

 

 Brazil

1

1

1

1

4

1

2

1

1

1

 Canada

1

1

1

1

2

2

2

2

4

4

 China

4

4

8

6

14

6

16

8

7

6

 Finland

 

 

2

2

2

2

1

1

 

 

 France

24

10

25

13

24

13

41

15

29

10

 Germany

15

6

17

6

13

8

16

10

16

11

 India

 

 

 

 

 

 

3

3

3

3

 Israel

3

3

6

2

3

3

5

4

3

2

 Italy

12

5

6

5

9

4

9

3

7

5

 Japan

1

1

 

 

1

1

 

 

1

1

 Mexico

 

 

1

1

 

 

 

 

 

 

 Netherlands

 

 

1

1

 

 

1

1

 

 

 South Africa

 

 

1

1

 

 

 

 

 

 

 South Korea

24

9

14

7

9

5

16

6

19

9

 Switzerland

14

4

11

3

18

4

8

4

13

5

 Taiwan

5

3

8

2

4

1

5

3

4

3

 Turkey

 

 

1

1

 

 

 

 

 

 

 U.K.

38

5

19

2

16

6

28

10

18

3

 U.S.

410

140

435

135

483

156

445

141

364

131

Total  

554

194

560

191

604

214

600

214

492

195


Exhibit 2: Number of Unique Companies
to Receive FDA 510(k) Clearance
Between 2012 and 2016

 Country

# Cos. from Country

 Australia

3

 Austria

1

 Brazil

3

 Canada

6

 China

18

 Finland

2

 France

23

 Germany

18

 India

5

 Israel

6

 Italy

10

 Japan

3

 Mexico

1

 Netherlands

2

 South Africa

1

 South Korea

14

 Switzerland

7

 Taiwan

7

 Turkey

1

 U.K.

14

 U.S.

324

Total   

469

 






As can be seen in Exhibit 2, the five countries with the most 510(k)s following the U.S. are France, the U.K., South Korea, Germany and Switzerland. When looking at the top five ex-U.S. countries with the largest number of companies with 510(k)s, China makes the list and Switzerland doesn’t.We expect that the U.S. market will remain attractive to companies with foreign headquarters for several reasons.

The first is economics. Our estimates show that ~61% of orthopaedic sales worldwide took place in the U.S. in 2016. The U.S. vs. ex-U.S. sales number has remained around the 60%/40% mark for years. Also, the U.S. dollar has been stronger than other currencies in recent years, making the market more attractive to importers. Finally, public companies continue to call out emerging markets like China, Brazil and the Middle East as volatile. While it's expected that companies will continue to invest in emerging markets, it's likely they will also seek sales from more stable ones.

The second reason behind the U.S.'s attractiveness may actually be regulatory. We continue to hear from Members and others in the industry that regulations in China and the EU are becoming more stringent, and therefore could drive companies to seek the U.S. FDA pathway first.

Other numbers of note:

  • Overall, 2,811 orthopaedic clearances occurred during this five year period, 76% by U.S. companies
  • The unique company tally is 469, with ex-U.S. companies representing 31% of the total (145 companies)
  • Suppliers, service providers or distributors achieved 50 of the clearances
  • More than a dozen of the companies that received clearance have closed, according to our research.

 
We cover 510(k) information in various publications throughout the year, and maintain our own FDA 510(k) Database at ORTHOWORLD.com (a Membership benefit). But analyzing the data in this way allowed us to better grasp company and market segment activity, at least within the U.S. We expect to leverage that perspective further in the months to come.

We know that this is a high-level view. It was meant to be. What deeper view would you like to see? We welcome your feedback.

Carolyn LaWell is Chief Content Officer for ORTHOWORLD. She can be reached via email.