Sunday, July 24, 2011

Sunday Funnies

Picture a man or a woman going on a journey beyond sight and sound, they have entered TSB zone.  Good day Spine World, you know what the late James Brown sang, "I feel good." It's time to rock it out from Baghdad to Berkeley.  It's 0800 and TSB is ready to rock, the "0" stands for OH My God, have any of you read the most recent marketing reports for the spine world? You know the reports that tell you what you already know.  Let's see, these reports have been uplinked and downloaded, inputted and outsourced, upsized and downsized, downsided and upgraded, they have been interfaced with a database, and their datebase is from cyberspace, they are interactive and hyperactive and from time to time they are radioactive.  With that said the market has been inspected, detected, injected, but not perfected.

So what are the sages of the industry telling us?  Well before you consider spending any of those fast depreciating good old U.S. dollars on another insane marketing report that tell you where you are (we know that), where you came from (we know that), let's take a look at what their crystal balls (no pun intended, not) are telling us where they see us going.  By the way, if their predications for the future are wrong, do we get a refund with interest?  The last few years in spine have been a rude awakening, mercenary to say the least.  We have gone from a super sized industry to one that is slowly consolidating itself whether by acquisition or failure.  Industry dynamics have been affected by a sagging U.S. economy, leading companies and investors to expand into markets outside the U.S., as well as selectively investing in technologies that are considered innovative.  Only a higher authority knows what will happen to our economy if the U.S. Government defaults on the debt ceiling.  The failure of our elected officials in both parties to resolute the debt could result in an economic downturn that could be the death knell for some spine companies.  So where do we go from here?

TSB would like to share with our bloggers some facts about 2010.  Our total market output was slightly over $7 billion dollars.  Revenues were a slight increase of 2.2 percent over 2009.  Poor growth considering where we came from.  Medtronic continues to lead the pack as the market leader with roughly a 35% marketshare.  Even with the acquisition of Synthes, J&J/DePuy ( a combined 26%) still takes a back seat to the Boys in Blue, followed by Stryker at 8%,  NuVa at 5%,  Globus at 3% and Zimmer at 3%. Before anyone gets their panties in a knot, these are rounded figures.  The rest of the industry is battling for 20% of the pie. The key players in that bracket are Alphatec and Orthofix.  Word on the Street is that this could be the year of Globus, and TSB is not predicting an IPO.  Rumor has it that their XLiF device will give NuVA a run for its money, and if it is as good as some clinicians have said, could this be the beginning of the end for NuVasive as the King of the XLiF.  This could be trouble for the Billion Dollar Baby.

Fusion continues to dominate, as we witness more entrants into the pedicle screw, cervical plate and PEEK interbody markets and biologic markets. One must ask, but why?  A premium is being placed by some companies on simplifying surgical technique with new approaches to old systems.  If you already have a viable and  competitive system that has MIS capabilities, why does the industry need more fusion products?  Simply, because new companies or those in the 20% of the pie, are willing to cut out the middleman and make direct deals with POD's, a new breed of brokers and hospitals. What we are learning in 2011 is that  the key to success has been creative and innovative selling techniques, along with attractive/aggressive commission programs to offset the increase in insurance denials and an outright attack by hospitals on driving ASP's to all time lows.  Companies that have been able to pick off distributors that were collateral damage in the Apatech/ Baxter, and Stryker/Orthovita acquisitions increased their revenues. These were the outliers in the industry. The pending J&J/Synthes integration will also result in a shift in market share, the question is, who will be the lucky company or companies to capitalize on this integration?  It will be impossible to keep everyone in the fold as there will be overlap in the field resulting in more industry related layoffs.

TSB believes that any company that doesn't have some type of motion preservation technology is already behind the eight ball.  There are roughly 30-35 companies with a variety of cervical disc devices and 25 companies with lumbar platforms.  As far as the Dynamic Stabilization market is concerned, remember that old French expression, "Le Roi est mort, Vive Le Roi."  Unfortunately, TSB does not see a successor, resulting in an interregnum for Dynamic Stabilization, along with the fact that the FDA has placed greater scrutiny on this product line.   Companies with ISD's could end up being the big winners in 2012 considering that they are playing in a diminishing landscape.  The advantages of this procedure are a shorter surgical time, involving a minimally invasive approach that is low-risk that results in patients recovering much needed flexibility and mobility.  Products like Axle, Coflex, X-Stop (the grand dame of ISD's), Superion, Flexus, In-Space, Spinos, Gel-Fix, Spinos, ISS, DynaFix, and Primalok are viable treatment modalities when it comes to Grade I spondy's with assoicated spinal stenosis.  The market and surgeons will determine who are the winners and who are the losers, as usual it comes down to simplicity and instrumentation.  The challenge will be to get those devices in IDE's out quickly, so that hospitals welcome them with open arms.  Reimbursement is an invitation to the party.

If the future calls for an estimated annual growth of 3-5% over the next five, the companies with innovation will win the race, but it will be a marathon rather than a sprint?  Will the top five companies be able to sustain their positions? Will stem cells rule the biologics marketplace? Will someone be displaced by an up and coming company. Will someone like Zimmer attempt to correct its past indiscretions in spine by making a key acquisition, or, will they be displaced by one of those companies in the 20% part of the pie? Whatever the outcome, strap yourselves in for the ride because 2012 will be the year of the dragon, one with vitality and strength.  The only question that remains to be answered is will it be the U.S. market that produces vitality or markets outside the U.S. when it comes to spine?  TSB wants to know what our readers think?

50 comments:

  1. Globus will not be going public this year. David Paul stated this in his address to the company a few months ago.

    As for acquisition, I think that Stryker or Zimmer would be well served to try and buy some market share to secure themselves as #3 on this list. Nuvasive will continue to struggle due to their greed and other companies developing lateral technology.

    That being said I would work for the companies that have the market share and hold on for the ride. The future will be even tougher for the ankle biters.

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  2. I like the taste of ankles. It leaves you nothing to stand on.

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  3. Where is the best place to be for a representative. I believe in a small regional distributor. Even a POD. Even though Medtronic and Depuy/Synthes will be in marketshare place 1 and 2, they will not be ideal places to make big money. As the OIG and Senator Grassley take a closer look at the Mega Distributors for these companies who represent close to 100 million in sales, or more, they will realize where the Implant markup and (ethic breaches?) takes place. Having distributors of that magnitude relinquishes control and compliance beyond the corporate walls. In spite of the policies in place. Medtronic and Depuy will be forced to go direct representation to ensure greater control and compliance over sales representation. Tighter restrictions, direct representation, larger discounts, smaller territories, resulting in spine representatives average earnings in the 125- 150K at most. So while Medtronic and Depuy are securing their future as Orhtopedic Giants they will no longer be the best places to earn big commisions. How many times has Medtronic lowered commissions? Depuy will follow suit post integration. Lower commisions, Direct representation, splitting territories. How many of the top reps for Depuy and Medtronic and Synthes have already made moves? So TSB, to give my opinion, the top companies will survive and thrive, but working for them will suck.

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  4. 12:15pm, why is it that you think NuVasive, as a company, is "greedy"? Just because we're WINNING doesn't mean that we're greedy. It just means that our product is better than your's.

    Let's be honest here...you're just another lazy-ass Stryker distributor hoping and praying for a windfall. Rather than pound the pavement to gain market share, you expect Big-Momma to "buy some market share" for you. Sounds to me like you have your heart set on Globus' exaggerated/unconfirmed piece of the pie judging from your seemingly unrelated comment about it not going public this year.

    Oh and your company (Stryker) has been talking about its "new lateral system" for years now and we have yet to see anything materialize. Please explain to the rest of us what is so revolutionary about this phantom system of your's. For that matter, please explain to us what is so revolutionary about Globus' lateral system. I have seen it. The retractor is decent, but it isn't anywhere near as good as MaXcess IV. That's where the comparison ends. Globus doesn't have a monitoring solution and it has very few implant options. You can hype them up all you want, but at the end of the day, no surgeon is going to use LLIF unless they are being paid. Sorry. The truth is the truth.

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  5. Realty Check: regarding your comments on ISP devices, IDE and "quickly" do not go together. IDEs take a long time and a lot of money and most ISP device companies will never complete an IDE anytime soon, if ever.

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  6. There is little innovation in this market, unless you consider a better retractor system or a new pedicle screw design innovation. We'll see more cervical discs, ISPs and spine stim in the next few years (all currently available), but nothing revolutionary. Why - check clinicaltrials.gov and see what is in clinical study. No clinical study, no big time innovation.

    So the next year is not about new products (unless your company happens to pick up a cervical disc, ISP or spine stim that gets FDA approval).

    The next three years are about surviving/thriving in a fairly mature commodity market. Tough market. No easy $ anywhere.

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  7. Besides Stryker (probably a half point to a point high) your market share figures are off. Disappointed in you because almost all that info lives in the public domain. You left Biomet off the list and they are bigger than Zimmer Spine. Your Globus and NuVasive figures are at least 2 points low.

    Whoever solidifies the #3 spot in the next 2 years, can make a serious run at #2 by 2020.

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  8. 1:19

    I actually work for Globus and not Stryker. My comment about the greed is the unreasonable expectation on growth that is being placed upon the sales representation. In my area the Nuvasive reps are leaving in droves, and none of them seemed to be that happy with the company. I think Nuvasive growth expectations are unrealistic based on the bag.

    Globus is smart not to have a monitoring option because sales people should not be interepting the data. As for limited implant options, I agree there, but this surgery is more about the approach and retrator options and not the implant. Also, our new stand alone option blows the Nuvasive stand alone out of the water.

    As for your "WINNING" comment, how original of you to take that train wreck Charlie Sheen's quote. I'm sure you were first in line to go see his comedy tour.

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  9. Hey 1:19

    I'll give your company credit for a nice product and a nice job developing the XLIF device and procedure, but where else do you see Nuvasive's products as superior? I'm not showing you guys any love for the Helix plate or the SpherX system. I can't even pronounce Coroent and it clearly has no novelty or superiority.

    Not slamming the company, as most companies products dont shine in these lines (commodities), but do you really think you can "Win" with a single novel product that is no longer novel?

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  10. Zimmer Spine WILL indeed purchase Globus. Heard David D mention it in an address to the company. He and Mr. Paul are very tight.

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  11. Globus will not be going public this year. David Paul stated this in his address to the company a few months ago.............


    Well if ole Honest DP said it than it must be true because we know what a man of superior integrity he is. Get real.

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  12. 2:37, NuVasive's high-expectations for growth is indicative of AMBITION, not GREED.

    Sales reps for NuVa do not interpret neuro-monitoring data. The NV software does that for us. This is the 21st century, compadre. Computers and robots can be programmed to perform complex tasks (i.e. neuro-monitoring), and they can perform these tasks with lightening speed and near perfect accuracy. Do you refuse to drive a car that was not built completely by human hands? Does it bother you that 99% of the welds on your Toyota Prius' frame were performed by robots, not certified welders? Your tired argument that CNIMs can interpret complex data as quickly and as efficiently as NuVa's automated neuro-monitoring software is ridiculous, to say the least.

    You are, however, right about one thing...the approach is probably more important than implant options when it comes to the XLIF procedure. This is precisely why NuVasive blows Globus' LLIF and every other lateral system out of the water. We have the best retractor and the only neuro-monitoring option that allows for safe passage through the psoas...especially at L4-L5. This comment will, no doubt, enrage many of you out there in Spine-Land U.S.A., but that's only because you are jealous or you simply don't understand the procedure. I too thought this claim was mostly BS when I first started with NuVa, but now with hundreds of XLIFs under my belt, I am thoroughly convinced that it is the truth. Need proof? Look around and see how many surgeons are doing LLIF at L4-L5. Then look around and see how many surgeons are doing XLIF at L4-L5. L4-L5 is the most common level fused with XLIF.

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  13. TSB - I don't know of any ISD indicated for a grade 1 spondy. Please enlighten me/us. Thanks.

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  14. 1:19/ 4:44

    YOU are the poster child for the arrogance & ignorance that flows through that organization.

    Newsflash: Nuvasive DOES NOT have the ONLY software,, blah, blah, blah. You are a newbie and have been drinking way, WAY too much purple kool aid.

    First: You don't need Neurovision to navigate through the psoas; Nuvasive has simply done a tremendous job making you believe that,,

    Second: There will be several systems on the market w/ identical aolgorithm software by year end,, Caldwell & Axon to name a few.

    3rd: In addition to Globus' lateral system, K2 has a very nice system as well; in fact, some might say better. I just was in a case last week and it worked just fine.

    4th: Globus' expandandable lateral cage is outstanding and if you think it won't impact Nuvasive's sales, simply look at the success that Globus is having w/ the expandable TLIF cage they launched.

    Bottom line, Nuvasive has made a nice run, but its time has come as others truly begin to expose the biggest weakness there which is their sales force; 90% of which only know how to sell XLIF,, nothing more.

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  15. another problem I see is Nuvasive reps still connecting eleltrodes/wires to the patients. I see them crawling under the drapes during surgery to check the connection. How do the hospitals allow this ? are they certified and insured?

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  16. Dont forget Wenzel Spine...26,000 Varilift cages implanted.

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  17. 2:37

    Just read the 510k for your new lateral spacer...Not a stand-alone product. If you are marketing it as such, you may want to check again with your legal department...provided they have time fending off all the lawsuits.

    "These devices are
    intended to be used with supplemental fixation in addition to the integrated screws."

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  18. 4:44 let me quote you my friend . "I too thought this claim was mostly BS when I first started with NuVa, but now with hundreds of XLIFs under my belt, I am thoroughly convinced that it is the truth. Need proof?"

    Now the question is....HOW MANY OF THESE XLIF's have you personally implanted? YOU said you have hundreds under your belt? Are you speaking about the cadver courses you have been too?? Please expand on how many you have done yourself?

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  19. Does anyone know why the MDT distributor (Rummer) retired?

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  20. The only thing that can keep Stryker and Zimmer relevant is NuVasive or Globus. NuVasive will go first.

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  21. 8:08

    Zimmer isn't relevant in Spine. Nice stock. Holding on to their Recon market share position for now, but in 24 months, that will be gone to.

    Zimmer Spine distributors are poorly focused, poorly run (with the exception of one or two), pathetic sales talent, and an absolute disaster at the corporate level. It's been that way for over 6 years under the leadership of Dave Dvorak (either as Group President or CEO).

    No Zimmer will not make a "move". They don't have the $ or the stones. No doubt they were one of the companies left on the sidelines in the OrthoVita discussion. For those that don't pay attention to the reams of shareholder info distributed, there were multiple companies in the running for VITA.

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  22. Rummer did not retire. Medtronic released a statement saying he retired. That was Medtronic's way of cutting down on more bad press and people asking why Brad resigned after 25 plus years with Medtronic.

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  23. 5:15 Lanx Aspen is indicated for a grade 1 spondy

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  24. Have done some XLIF's. They do about as well as ALIF's. Recovery is maybe a day faster, if that, but decompression not as reliable. I don't get it...

    Not sure it's worth the trouble and expense to go through the psoas. My staff has trouble with the equipment. I won't let the rep touch the patient...which is a pain, since the company doesn't train my my people to place the electrodes (who are ones legally allowed to do it). (Do they have a small version of the infuse problem brewing...? How many docs let the rep set up the equipment....how many quad weaknesses are out there as a result?)

    Why do they sell so well? The procedure seems fine, but certainly not revolutionary...

    Am I missing something on the reimbursement?

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  25. 7:37pm, what on earth are you rambling on about? You do know that "XLIF" is a procedure, not an implant, right? Your ignorance about the topic of lateral spine surgery is apparent to even those that know very little about the subject.

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  26. Spinous Process devices are no longer able to be billed as a fusion device per NASS. Bye bye ISD business. Get with it you bums!

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  27. The monitoring company in my area laughs at NuVa. While their watching their screen spike the little box in the corner stays silent.
    Green means "Go" Red means "Stop". Thanks my untrained representative. I am so glad you helped make surgery simple.

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  28. Many surgeons are pushing back on assuming all of the liabilty for "surgeon driven" montioring systems. What is being promoted as an advantage is now looked at as a weakness by the surgeon community. How many surgeons run dual monitoring systems during an xlif and why? Talk about a disconnect with reality.

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  29. Going back to the second poster. I am not sure that POD is a place to be a representative, as far as money is concerned. Most likely, a rep with a POD will be salaried. Although there is security, there is little option for large payouts. Please let me know if I anybody is seeing something else. I was approached by a surgeon to work as his rep for his POD and the pay was extremely lousy....80K with spiff options that could get you to 110K. I also don't think that a small distributorship is a place for payouts either. With many of these changes taking place in spine, I have seen many distributor contracts change hands, geographies change and commissions get decreased. I feel that getting direct with one of the bigger guys is still the best bet for security and money. Just my two cents.

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  30. Thanks 2 cents. Way to be aggressive! Apparently no risk is your motto. Guaranteed that WILL get you fired as you try and hide out like the rest of the mediocrity in the big guys. Although you might get a promotion at MDT? There will be a new VP of Sales open soon.

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  31. Synthes v Globus Again!


    http://www.rfcexpress.com/lawsuits/patent-lawsuits/delaware-district-court/78535/synthes-usa-llc-v-globus-medical-inc/summary/

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  32. Does anyone know what the new lawsuit in 9:08am is about?

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  33. The three patents listed in the lawsuit are for an integrated intervertebral implant. The images look like the lumbar version but the patent may also make claims for the cervical since it doesnt specify lumbar in the claims.

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  34. Hello fellow Spine Bloggers. I wanted to reach out and put some feelers out to anyone that may know or have an opening for a seasoned spine rep in the Northern California area (sacramento)???
    Please email me at::
    onespineguy@hotmail.com
    I thank you for your time.

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  35. Re: 9:08

    Synthes “contends Globus’ Independence, Coalition and InterContinental Plate-spacer systems are using … protected technology” covered by three patents, according to the report.

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  36. So what's the real story on Rummer?

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  37. From what I have heard it was truly a retirement. He's made plently of money off industry and finally decided he had enough. All of the sales reps became direct employees besides the Houston market.

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  38. Hey 10:22

    I may be interested in reaching out to you. I'd first like to ask you for an initial of either your first or last name. Sorry, there is one character in particular I prefer to avoid. Gracias:)

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  39. Lifespine is going public

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  40. You mean Deathspine

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  41. No more buying - "Gucci Gucci, Louis Louis, Fendi Fendi, Prada" soon.
    Spine has no swag in this week’s trading.

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  42. 1:25 what are the initials of the character you are referring to? I am looking to fill a spot in Northern Cal myself.

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  43. 4:33 Does anyone have any more information on the Spinous Process devices not getting build for fusion? Is this inner spinous or spinous process plates or both?? This could have a major effect on many companies that are relying on this "new" technology.

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  44. You can bill for fusion with a fusion ISP, like Aspen or Axle. You can't with a nonfusion device like X-stop.

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  45. 8:08, You really need to get over being dumped by Zimmer for being less than effective. The spine division will make a move in the next 12-24 months and the recon division still holds the number one market share world wide. How does that go away in 2 years? Your ignorance is equalled only by your ineptitude.

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  46. Too bad Blackstone sold out to orthofix before they could crank out a knock-off ISP. Consulting fees and commissions would have flowed like water. Prada and Range Rover lost a lot of sales because of that lack of foresight.

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  47. Mr. XLIF, please tell me how you still believe your Neurovision is superior to any other NIM machine currently used in lateral cases by competitive companies across the country? I can think of two that do exactly the same as Neurovision with both visual and audible feedback.

    Glad to see you're also soaking in all the rhetoric from corporate about how your 'new' 4th Gen retractor is still heads and tails best on the market. Tell me this son... when you're doing an XLIF at 4/5, and that retractor is migrating around all over the place and banging the nerves up against transverse process, don't you wish you had a component to anchor your silly 3-blade retractor into the bony anatomy you're working around? I've loved snatching up XLIF business in my territory with this point alone. Simple

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  48. I have used NuVasive, DePuy, and now Globus' XLIF system...Globus wins with it's retractor and the stand-alone fixation is clearly better too. Why all the fuss about spinal cord monitoring? Using the guys from my hospital seems as good if not better than Neurovision. I must say, though that NuVasive has very good instruments for removing interbody cages (that have migrated or become loose)via the XLIF approach. I am surprised by the ignorance of those that say you can't charge for a posterior fusion done with the ISP devices, all you are required to do is include the facet joints by NASS guidelines. By the way, one would have to use the code for removal of non-segmental fixation for taking out a LANX Aspen or Globus SP-Fix. They take a bit of work to remove...

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  49. 8:13 you realize when a surgeon approaches you for a deal it's not going to be in your favor. The successful PODs are run by businessmen, not surgeons. The surgeons are only hired tradesmen with a tradesmens license. Got it? So stay where you are and watch your commissions diminish each year.

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