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Current & Critical

Spine Industry Reaches “Age of Innovation”

By Marc Viscogliosi

Editor’s Note: The spine market is saturated with players producing commoditized and some novel technologies. Thus, the amount of strategic activity—funding, M&A, product announcements, etc.—is more robust than any other segment in orthopedics. To understand today’s activity and how it is shaping the market, we spoke with Marc Viscogliosi, Principal at Viscogliosi Brothers and former CEO of Paradigm Spine, about his take on the spine market, and how key pressures play a role in innovation.

Mr. Viscogliosi’s comments were originally published in ORTHOWORLD’s Annual Report, which can be found here.

Market Health

In general, the spine market is stable from a volume and procedure mix standpoint. Significant company consolidation has been driven by the market’s shift to prioritize evidence-based differentiated products, innovation and specialization of certain areas of the spine industry, e.g. motion preservation devices and artificial discs.

I believe that we are entering a golden age of spine innovation that we haven’t seen in two decades. This statement is based on company and surgeon desires for innovation, the capability of 3D printing and the commitment from FDA to approve more products and procedures for the market. All of these factors bode well for enhancing outcomes and delivering value to the marketplace.

Part of what’s driving innovation is the move toward MIS and outpatient surgery. These procedures are being leveraged with enhanced precision-driven technology such as guided navigation, robotics and augmented reality technology, and enhanced procedural integration with neuromonitoring and implant placement/delivery tools.

Product and Player Trends

Robotics is going to be a 2019 trend—how spine players define and place value on the technology and how the technology impacts spine procedures.

Motion preservation is a growing segment of the market. We’re going to see more integration of 3D-designed implants, as well as more procedural solution-based systems where we’re integrating the delivery of the implant with the biologic material in a minimally invasive fashion in a package.

With the big companies, I would look for product and procedural-driven innovation that integrates navigation, augmented reality and robotics. From the mid- and smaller-tier companies, look for significant investment and innovation from 3D printing, motion preservation and enhanced procedural integration of implant, instruments and neuromonitoring.

We’ll probably continue to see consolidation around innovation, because in order to drive revenue today, you need that novel product. To grow, you need partnerships, you need acquisitions, you need holistic integration as opposed to remaining a single implant or single procedure provider.

Additionally, I expect you’re going to see a lot more procedural and practice-building activity from surgeons, whether they’re adopting motion preservation, minimally invasive technologies or technologies that help deliver better outcomes.

Future Market Forces

Surgeon, hospital and payor pressures are more integrated than they have historically been in spine. The interaction and the interplay of these pressures create a focus on providing multiple solution points throughout the surgical process. You can’t just have a particular implant innovation or a particular navigation technology or a particular instrument improvement or strategy around prices.

Payors are focusing on outcomes per value, and surgeons are starting to see more resistance on covering fusions. I think that’s going to become a long-term macro trend. We’re going to see more utilization of management review companies such as Optum, AIM, EviCore, Magellan Health—these companies rely heavily on prior authorization, appeals and denials.

Finally, the EU MDR will enhance regulations and implementation of regulations internationally and will be an incredible challenge for companies’ international businesses. This may lead to international consolidation, as well as slowdowns in international product innovation and international growth, due to the greater need for safety in the clinical application of product development.

Please send comments on this article to Carolyn LaWell.