Thursday Morning Op-Ed

Recently, a" self proclaimed thought leader" spoke at an industry related trade show announcing that though 2009 was one of the worst in over fifteen years, there was a glimmer of hope on the horizon. Unfortunately, this hope did not pertain to the spine industry. This week, another web-based platform announced that there was a mega spinal implant fire sale going on. Meaning, pricing has, is, and, will be an integral component in selling product. By now, all of you know that the highly esteemed Captains of Industry on Wall Street, you know, the market-makers and their analysts', have downgraded the guidance forecasting single digit growth for spine. Oh where oh where have those 20-30% days gone?

Ever since TSB launched its website in February of 2009 our contributors and staff have highlighted some of the challenges that this industry was going to face coming off a near collapse of the U.S. economy. By the way, has anyone ever been held accountable for that, or was that an act of God? Some of our readers questioned our analysis of many of the early and mid growth stage companies that were now going to have to compete in a zero-sum market, while those with questionable emerging technologies, needed to realign their financial forecasts and expectations. We even poked fun at some of the clowns to the left of me, jokers to the right, that continue to run some companies within the industry. For many years, spine was the holy grail of the implant industry. How could anyone deny a patient in pain treatment? Not the insurance industry. Hospitals accepted any price for a product because we were partying like it was 1999.

Our industry glutted the market with more knock- offs and versions of pedicle screws, cervical plates, inter-body devices, cervical and lumbar discs, interspinous process devices, biologics that we behaved no different than the Nigerian street merchants one sees in Paris, New York, San Francisco, London, or Rome. At least those people are honorable admitting that they are selling knock-offs. Yet, we continue to strangle the industry by attempting to reinvent the wheel. Have some of these designs really made a difference based on retrospective clinical data? In some instances yes, but in most, not really. For an industry that is run by sales, marketing, and financial experts, it seems many have forgotten what it really takes to build a business. Building a business is quite different than brokering customers, buying consultants, and treating people like a commodity. But let's face it, what can one expect when the industry has commoditized itself? To some degree we are on the verge of euthanizing ourselves if we don't change our behavior. No fellow readers, some companies will not disappear, but what awaits many of the smaller companies is a rude awakening. It's called consolidation. Some of these companies will actually have to develop something truly emerging, or, they will perish, or be left with the alternative of merging with another company. This will not be an acquisition, this will be a survival merger. Yet, TSB does not see this happening because of the size of some egos.

Many of these smaller companies have had a tremendous amount of turnover. Unfortunately, the turnover should have occurred on the CEO level. Our industry is the poster child for greed and insanity. The legal system loves us, witnessed by the many lawsuits that are currently taking place. Today Synthes is suing Spinal Kinetics, NuVasive is suing Orthofix, all for the preservation of market share. Yet, what does it say about your product when one must litigate? So in closing, Machiavelli was correct when he said, " I'm not interested in preserving the status quo, I want to overthrow it." TSB wants to know what our readers think?