Concern and caution: How 6 spine, orthopedic surgeons view medtech mergers

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The spine and orthopedic medtech space has been abuzz with major company mergers in recent years. The news is major for stockholders, and physicians who use the technologies are keeping an eye on the deals.

Six spine and orthopedic surgeons told Becker's how they're feeling about the shifting medtech landscape.

Note: Responses were lightly edited for clarity.

Question: Several medtech companies are planning mergers in the near future. Does this excite you or make you concerned?

James Chappuis, MD. Spine Center Atlanta: Future medtech company mergers have the opportunity to either disappoint or improve healthcare. The outcome is solely based on the heart of the companies. If the coalescence of these companies leads to the prevention of attainable healthcare and devices as well as commodifying patients, then it will be at the detriment to the medtech consumers first and ultimately the mergers long term. However, if the mergers improve the accessibility and quality of patient care, these plans could be exciting.

Jesse Even, MD. TMI Sports Medicine and Orthopedic Surgery (Arlington, Texas): I think the market needs some consolidation, but at this point, if we continue to consolidate I think innovation will suffer. I think there was a great deal of waste in the market with regards to duplicate products, but historically the smaller companies have been the innovators in the market and we still need them to continue to push the advancement of the spinal implant industry. If we end up with just two to three large companies providing all the implants, I am sure innovation will suffer. 

Rafid Kasir, MD. San Diego Orthopaedic Associates Medical Group: We have seen at least two large mergers this past year in medtech companies related to spine surgery. On the one hand, mergers could potentially result in the development of more advanced and integrated technologies, offering enhanced tools for effective surgeries. However, there is also a concern that consolidation might limit competition and innovation, potentially impacting patient access to a diverse range of cutting-edge solutions. I am overall cautious of any mergers that limit diversity in the market. In the long term, this diminished competition can lead to less innovation, higher prices, and fewer choices for medical devices and technologies. In a diverse market, multiple companies bring their unique approaches to problem-solving and product development, fostering a richer ecosystem of options. Mergers, if not carefully managed, could stifle this diversity and hinder the advancement of groundbreaking solutions for patient care.

Roland Kent, MD. Axis Spine Center (Post Falls, Idaho): Both. The largest companies in the spine space have little pressure to innovate, as they already control a large market share. It is my hope that the merger of smaller companies that when combined could rival the market share of the larger companies stimulates competition which in turn leads to increased innovation at that level. 

Unfortunately, often during the merger process itself, innovation is pushed to the side while managing the marriage of the entities. This can lead to a loss of company identity and can negatively affect the development of new technology in the short term. 

I believe there will always be an allowance for smaller companies to develop new technology and having an increased number of larger companies looking for competitive advantages will increase the value of small company innovation when acquired. 

Brian Larkin, MD. Orthopedic Centers of Colorado (Denver): I have approached medical technology mergers with cautious optimism. There are critical cost pressures in the medical technology and device world, and an increase in the number of mergers is likely a result of this.  This consolidation in the market promises the opportunity to support novel technology and bring it to market quicker. With increased size comes the potential to disrupt the market and demand higher prices. Medical reimbursement is not going to move upward and as the economics of healthcare delivery are challenged, how the industry looks at potentially costly new technology will be interesting to follow. Will these costs be passed on to insurers, patients, facilities or larger healthcare systems? How can all involved entities help modulate the persistent increase in healthcare spending? In order for these mergers to be successful, they will have to play an active role in the larger conversation about healthcare economics.

Frank Phillips, MD. Midwest Orthopaedics at Rush (Chicago): I think mergers of medtech companies is a trend that will continue. Many small companies that have a suite of "me-too" products with a cohort of surgeons using their generic devices add little value to spine care or to improving patient outcomes. As capital markets become increasingly challenging, it will become more difficult for these smaller non-differentiated independent companies to thrive. In addition, as expensive enabling technologies with relatively long development times become ubiquitous, mergers centered around access to these technologies will continue. Mergers have been claimed to limit choices and increase pricing; however, in reality with the high number of spinal companies and the pricing pressure hospitals are able to exert on device manufacturers, it is exceedingly unlikely these mergers will result in higher pricing.

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