The pros & cons of orthopedic & spine device company mergers

Spinal Tech

Four spine surgeons weigh on the ongoing mergers and acquisitions in the orthopedic and spine device field.

Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. We invite all spine surgeon and specialist responses.

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Question: What impact will device company M&A have on the industry? Do you see this as a positive or negative trend?

Vladimir Sinkov, MD. Spine Surgeon at New Hampshire Orthopaedic Center (Nashua): Recent M&As have been both positive and negative. If two large device companies merge, it limits the overall competition and drive for innovation for the industry as a whole. This will, in turn, result in more expensive and lower quality products and ultimately does not promote better patient care.

On the other hand, many smaller, more aggressive and very innovative companies are driven to do what they do with the final exit strategy of being acquired by a larger company with more capital for marketing and much larger distribution networks. This type of M&A activity only encourages further improvement in quality and efficiency of patient care.

Christian Zimmerman, MD. Spinal Neurosurgeon at Saint Alphonsus Medical Group and SAHS Neuroscience Institute (Boise, Idaho): Hopefully, one of the implied positives will be cost awareness and containment that ultimately is passed on to hospitals and patients alike. As many institutions scrutinize all orthopedic and neurosurgical instrumentation, constriction of costs within finite margins are annual negotiating tools between materials management, physicians and health systems. The 'positives' derive savings which ultimately lower cost and boost quality, but insurer abstinence from approvals portend the direction of complex spinal care in this country, which ultimately has its ill effects as all of us are acutely aware.

Brian R. Gantwerker, MD. Founder of the Craniospinal Center of Los Angeles: This is never good. One does not have to be an economist to understand larger corporations create less competition and higher prices. Some may laud it, citing the scaling of production and more money toward R&D, but let's be honest, less is never more when it comes to this marketplace.

J. Brian Gill, MD. Spine Surgeon at Nebraska Spine Hospital (Omaha): Mergers and acquisitions are inevitable in the medical industry field. While they can create better efficiencies through competition, the selection of vendors in the respective marketplace can diminish. Innovation needs to continue to happen despite ongoing mergers and acquisitions.

 

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