Recently, one of our bloggers posted a comment describing one of those precious moments in spine. While meeting with a California hospital purchasing manager, this particular blogger was informed that there were three distributors selling X-Spine's cervical plate with three different ASP's. If someone attempted to make this up, it wouldn't be possible. But what does it say about an organization, would that even be an appropriate word, and our industry? How many company's are building their business models on this platform, and, is this really a business model? Even Wal Mart and Target has limitations. It's a wonder why some of these company's can't get out of their own way. Does this bode well for any organization? Would anyone really be interested in doing business with, or investing in this type of company? For the record, TSB is not signaling out X-Spine, because the fact remains that many companies in our industry rely on this type of, ahem, disorganization. Historically, companies that succeed have had focus, solid technology, organizational structure, managed its capital CONSERVATIVELY, and most important, had someone at the helm that knew how to lead. And what does it say about the people the run these companies?
Rumors have been swirling that there are a few spine companies ripe for the picking. Why? Because these companies are in a financial quagmire. Five, six, seven years into their venture and they just can't increase their revenue. But why? Because many of these companies have no cohesiveness, nor continuity. It's a game of musical chairs, indicative of the many new hirees and the number of companies that they have bounced around with, not on their own accord. In this industry, ego's are larger than appendages, and many people have ears of stone. These individuals and companies will tell you otherwise. They will tell you that they are victims of a bad economy. If there ever was an industry were hundreds of millions of dollars have been flushed down the tubes, it is spine. Companies like Archus, Applied Spine, Innovative Spine, Inion, Disc Motion, Pegasus, Vertebron, Facet Solutions have squandered hundreds of millions of investors dollars. Some have been sold for pennies. Our industry is a breeding ground for those afflicted with attention deficit disorder, running in ten different directions, hoping something will stick. Keep your eyes and ears open, there are deals to be had. Could it be a Bacterin, a Phygen, a Customs Spine, a Captiva Spine, an Eminent Spine, a Spine 360 (do they even exist), and would some of these companies really be worth anything, outside of some regional or surgeon investor sales? And would those investor surgeons even continue to use the product after they were paid off?
On the financial front, Amedica/U.S. Spine is gearing up to give its best shot at taking their venture public with Creation Capital offering a pre-IPO Convertible Bond to potential investors. Upon completing $30 million which consisted of $15 million in private equity and $15 million in debt financing it looks like investors are seeking to capitalize on this opportunity. But the question must be asked, is silicon nitride really a game changer in spine? TSB is not going to elaborate on the reconstruction market, but when it comes to spine, will this material really improve the fusion rates? And when it comes down to manufacturing, how much does utilizing this material on implants increase the cost of the product? At a time when hospitals are squeezing vendors for every nickel they can get, looks like this might be a great venture to invest in. TSB wants to know what do our bloggers think?
Spinal Elements is known for this. We had mass confusion on whose acf set was whose after multiple sets from different sources had been autoclaved and wrapped. Had to unwrap two to find ours and the extra implants.
ReplyDeleteIt's not rocket science. X-spine does a lot of sales to stock and bill distributors. These distributors are free to price the product as they like for their market. Price variations will naturally occur with this business model.
ReplyDeleteAs 8:34 states, you have too many of these smaller spine companies needing dollars to the bottom line quickly and they "sell to stock" distributors. Its a brutal business model that catches up to you quicker than later. Once again you have management at these tier III or lower companies that get in way over their head and expand too fast, pay themselves too much, or have a pathetic business model to start and need to do "whatever" to keep the lights on.
ReplyDelete@8:34
ReplyDeleteWhy is selling to stock a "brutal business model?" It's a wholesale/retail relationship, which is how the vast majority of goods are brought to market worldwide, including the health care industry. Please elaborate on the brutality.
@10:57am, it basically means those companies selling to stock and bill distributors have inferior products to everyone else because you have to sell it for pennies versus actually demanding more for your product that is better than most on the market. Then again, X-Spine and other smaller companies that do this have a very poor line of products, henceforth, having to sell to stock and bill distributors. Its sad these types of products are being put into patients.
ReplyDeleteAs I am about to have an X-Spine product put in me next week, could you please say more?? Why are their products of poor quality?
Delete@11:55
ReplyDeleteSo stock and bill distributors only sell poor quality products? That's ridiculous. Stocking distributors have to invest their hard earned money into their products. If the product is lousy, then they eat it. They have to be more vigilant than a consignment distributor who pays nothing for a product and can switch anytime. Just because a product is less expensive doesn't mean it's lower quality. The fat margins of the big guys are wasted on comp and fluff. It doesn't go into the product I assure you. Stock and bill is the future. It's the only way to make a decent margin in this era of declining ASPs.
Wow--where did you study economics 11:55?
ReplyDeleteSelling a product at a lower price has nothing with it being "inferior"--they do this in order for the stock and bill distributor to make an adequate margin such that they will be interested in moving their product. Are you telling me that the $1600 screw MDT sells is better than the smaller companies'? How so? All screws and cages for that matter, have to undergo the same ASTM battery of tests to be cleared for market--
What is sad is that patients continue to see increases in their insurance premiums because the market leaders have no shame when it comes to their pricing policy. Just yesterday, a surgeon related to me of having come back from an MDT course on lateral access and agreeing to perform a surgery with their system -- a 1 level IBF -- total hardware cost to hospital $16000.00!and is the patient better served with this product? No--its just a way for MDT to extort the hospital by labeling it "new technology" -- the same procedure could have been performed for hardware costs for half that and everybody would have made money.
You must work for one of the big boys or are a paid surgeon/consultant (read "shill").
@12:22 and 12:24, so your telling me if you put a MDT/Stryker/Synthes/Depuy plate up against an X-Spine plate you couldnt tell a difference, give me a break. I guess if you keep telling yourself its better then eventually you will think that. It does help the big boys out, trust me, because we get to come in and clean up the revisions the smaller companies made a mess of.
ReplyDeleteNo, not that you couldn't tell the difference--there are always features that distinguish one product from another--but they all are "equivalent" in their performance characteristics because they all have to go through the same testing to get on the market. And messes are the result of any number of things, including poor technique, improper patient selection, infection, ...
ReplyDelete12:47
ReplyDeleteThe X-spine Spider plate is a bulletproof system. In fact two of the four big companies you mentioned have asked to license or acquire it! If it got into your bag you would be poetically extolling it's virtues. Won't happen though.
DLK
Who are the two of the four big companies? We would all be curious to hear that crock fo BS. Danek, don't need you, Synthes has its own compliment of plates, DePuy has its own plating system and Stryker and Nuvasive have their own. LOL
ReplyDeleteIts a cervical plate, let me extol its virtues
ReplyDelete1127
ReplyDeleteOf course they already have their own plates. But do they all have good zero step locking plates? No.
Now that's really going to make a difference especially when OR time is a fixed cost , and oh by the way it's improving fusion rates give us a break
ReplyDeleteyes, spine 360 really does exist, why haven't you seen their sets in your hospitals, they seem to be everywhere I go
ReplyDeleteAre there any companies that TSB actually likes? You seem to be calling out a lot of folks here. Since it's so easy and everyone else is doing it wrong, why don't you start your own company and school us on how it should be done?
ReplyDeleteOvercapacity equals less profits, overcapacity means unrealistic revenue expectations, and by the way 2:39 I really don't know what you are reading, or how you process intelligence but explain where in this blog is TSB providing you with their own opinion.
ReplyDelete...."because we get to come in and clean up the revisions the smaller companies made a mess of".
ReplyDeletePerfect example of why the "Big Boy" market share
continues to shrink. Not only does your attitude suck, but you are arguing your case over the revision of a cervical plate...quite possibly the most basic fusion procedure. Wait around for the my revisions you douche.
Cmon 249. Did you read the blog? "it's a wonder why some of these companies can't get out of their own way" " many of these companies have no cohesiveness or continuity." Etc etc.
ReplyDeleteNow there's an intelligent response between two heavy weights LOL
ReplyDeleteA couple of hospitals I go to have 3-5 distributors carrying Alphatec. Why would anyone sell their products if another distributor in the area carries it as well? On top of that they are selling to several POD's in the same area. I would refuse to sell any products unless I had a defined exclusive geography. Can anyone explain this business model?
ReplyDeleteX-Spine Spider plate a "bulletproof system". This blog is better than comedy central. Kirschman, you can drone on all you want, but that product is a piece of crap and you are bold facing lying that some of the big companies wanted to license it.
ReplyDelete3:07, I too have seen this in my area. It is bad enough to see another distributor with your product and the confusion and lack of professionalism it carries, but then to have the PODs pop up. I like K2M, they will not deal with PODs and I will show allegiance in the same way
ReplyDelete308
ReplyDeleteJust because you lost business to the Spider, which has been used in over 20,000 procedures worldwide, doesn't mean you should go on some anonymous rant. In fact we already have two licensing agreements in place for the Spider locking technology and get inquiries on a regular basis from many companies. Several big company distributors handle the spider in addition to their main lines because they prefer it. Enough said. Internet arguments are like the special olympics - you might win but you're still retarded.
3:07 & 3:10
ReplyDeleteBetter yet, have a couple direct reps in the geography, a couple single person distributors, and a regional manager that "knows the market." The directs are trying to position themselves as the future and the eventual replacement for the distributors. The distributors are selling to their relationships and will move on to the next company with their relationships if forced to. What is the goal at the end? Short term is easy, company is making money. What's the long term? And as we all know, long term in this business means 12 months. Eventually it comes to a head.....what's the plan when it does? If that's your model, what's the plan? If you don't have one, suck the company for all they'll give you and prepare to get in line with the other's looking for their next RM/VP job.
I heard the funny 30,60,90 day speech the other day. Must have said it 3 times during the course of a meeting. Thought I was going to break out laughing at him. This phrase repeated by the same guy who has had a new job every 2 years for the past 8. He must have only that short sited nature about him. He should "check himself before he wrecks himself" and try to make his own 365 day plan to insure at day 730 he's actually built something. Or maintain the facade, get terminated, and live to tell the next company you interview with how great his career has been and it was them (previous company), not him. Are you listening douche bag? Yes you.....you know who you are!
I have seen and heard on how pathetic the spider plate is and for anyone to say its a good plate is obviously from that company. And if anyone is licensing that pos of a plate then it is obviously some douche company that has no clue about the spinal market. Anyhow, the spider plate does allow for other companies to come in and revise those pieces of ####.
ReplyDeleteSpine 360? How does a company that claims that they are everywhere have a website when you click on the product icon nothing comes up? Must be their stealth product portfolio. Small and flexible management team, yeah must be the contortionist that I saw at the Aladin Hotel in Vegas TBC
ReplyDeleteDid not know you little whiners (or weiners) had no sense of humor! Since all you do is bitch!
ReplyDeleteI have to disagree TSB. What about the confusion created by a rep carrying 15 different identical product lines? Often they focus on one. Its really hypocritical. Few reps sell product anymore, unless it is a cure for ED, baldness, or cancer. Instead many expect companies to generate the interest in products while they collect 30% to service the sale. Many take months to submit p.o. #s. There is no plan for increasing sales. No new business.
ReplyDeleteUnfortunately, the days of the land barons have ended. The market is too fragmented by disorganized reps that control a few relationship to grant large territory. No admin function or internal logistics. Sadly,few reps sell, most service. Sorry guys...
7:07 That is lame. Why can't the managers do their jobs and find the organizations that have the right team and infrastructure. This is a result of sub par RMs and impatient VPs taking the easy way out. It is destroying our industry. Now PODs are even easier so they will be popping up everywhere.
ReplyDelete7:07
ReplyDeleteTSB here, I agree that there are many sales reps that carry multiple product lines, unlike most, neither have I ever done that, nor, did I like signing those distributors. But you aren't honest by not asking yourself, why does this exist? A previous blogger said it best, "over capacity." In addition, the dynamics in the marketplace no longer resembles a free market. Look at the industry's history, as more start-ups emerged, we went from a direct sales model to an independent distribution model, and if you don't believe that, you haven't been in business as long as others have. But who was the impetus behind modifying the model? The investors and new management? And why? Because they needed immediate sales, hence your short-term ROI. The advent of surgeon consulting agreements altered the rules of selling, forever. Surgeons no longer were assessing products on an even playing field, and for those that deny it, they are full of BS. How can anyone be objective if they are getting paid by a company to develop (wink, wink) a product. As has been editorialized, yes there are surgeons that actually work on products, but, have we forgotten the Blackstone model where there were 10-20 consultants working on one project? A cervical plate? A pedicle screw? C'mon. "Hey doc, before we can bring you on board and to be a consultant, we want you to use our product." How many surgeons have been granted stock options, get paid royalties, or are paid under the table, whether it is by the company or the distributor? Just look at the most recent NASS booklet. If you think that doesn't affect someone's ability to sell, then you're full of BS. Leadership comes from the top, it doesn't work its way from the bottom up, of course, unless you run your organization that way. Blaming sales people for the current environment is like placing a state's fiscal woes entirely on firemen, policemen, teachers and union workers. The system is gamed by those that are supposed to lead. It's called, deflecting accountability, why do you think AdvaMed was started? But then, our society has become comfortable by placing blame on external forces that supposedly are out of our control. Is the near collapse of our economy a distant memory? It just happened, no one knew it was going on. This is known as the Rudy Giuliani defense.
I know of many of the people mentioned in this blog. Ever speak to anyone of them? "If I hire you, can you bring $3 million in sales in the next 6 months?" Why don't I just hand over my rolodex to you. "Can you help us develop the West Coast?" How quick do some people think you can get product into a hospital in today's environment? Ever hear of something called a Preferred Vendor List. Undoubtedly if you have surgeons in your pocket, sell in some community type hospital, or, are paying off the surgeons you can flip business at will. But BUILDING something takes time and hard work, and many of these companies don't have the time, neither do they believe in hard work.
So in closing, I apologize for my rant, but if you think sales reps are the problem, wait until you have to deal with POD's on a national basis, you'll reflect on the good ole days and wonder, where do we go from here?
TSB, great rant, we have become a grifter society.
ReplyDeleteNot all companies and surgeons operate on the pay for play model. You can still sell out there,particularly on relationships, but few want to. The dirty business is more attractive.
ReplyDeleteWe have been around for decades and have seen the changes in the market. My company does not participate in retainer consultants, stock ownership, PODS etc, yet we are still growing at solid double digits. My management team is skilled and committed to develop business, but when we attempt to do some heavy lifting in an agent's territory, the phone goes dead! Agents and reps are suffering from apathy and an overall malaise. Maybe it is some for of post-traumatic stress disorder.
"Rather fail with honor than succeed by fraud." Sophocles
Sub par RMs? When you are getting the screws put to you by the VP, you take whatever steps necessary to gain business as quickly as possible. Thats why you see multiple distributors selling the same product in the same hospital.
ReplyDeleteCompanies are willing to carve out surgeons based on relationships in order to get the sale.
I think its ridiculous personally, but hey, you gotta do what you gotta do right? Who's gonna be a crusader and do the right thing?
Elias was a crusader and we saw what happened to him.
The funny thing is that USS/Amedica is moving more towards this model. Recently, there was an open casting call in my area to help the multi-state distributor network help "sell". What a joke and a sign of a lazy RM.
ReplyDeleteEver walk in to speak with a doctor about a product only to have him say, "Ron was in here this morning and showed me that, and I'm going to tell you the same thing I told him-I'm not using it." Embarrassing, unprofessional, and an every day occurrence for spine distributors.
Look for Amedica's stock on a pink sheet near you.
I guess Sendro learned something valuable while being a shill for Matt Lyons
ReplyDeleteI can't believe so many of you are on here bantering about a cervical plate?? Shows how pathetic this industry has become,,
ReplyDeleteWho cares about the virtues of a plate or a screw? Realtionships are the key in this industry, period. Whether they be at the rep, manager, DP or corporate level, these are ultimatley what determines everything at the end of the day.
Debating the virtues of implants shows me that you clearly don't have any of these and are truly trying to hang your success on trying to "sell" a plate to your customers.
Sad & pathetic.
Amedica is allowing certain accounts to stock and bill. One that I know of and sure they are making more comm. than the other distributor’s carrying the same products.
ReplyDelete3:35, from the degree of compassion that speaks from your not so funny joke about the special olympics it is obvious you are well placed in spinal sales. There is no other area in medicine where it is so little about the patient and so much about divvying up the spoils. Spoils made by cutting open human beings for diagnoses like DDD, which unto this day is ill defined and even worse understood. All this has lead to luminary thought leaders in the field like Vishal James Makker, who will get you better with 7 surgeries in 24 months..... Kaching!!!!
ReplyDelete8:36
ReplyDeleteThank you for your observation about the degree of compassion exhibited by 3:35. Based on the content in that comment it is evident that this individual works at X-Spine. Incredibly when someone stuck the skewer to the VP of Sales on this post, TSB deleted those comments. I guest the thickness of ones skin comes in many shapes and sizes. Peace
So you leave the Sendro slams on, but delete the Joe Ryan slams? That's weird.
ReplyDeleteWhat are you Sendro's rabbi?
ReplyDeleteany thoughts on MIS/Deformity?
ReplyDeleteI know Joe Ryan. Joe Ryan is a friend of mine. Paul Sendro is no Joe Ryan.
ReplyDelete10:19 Must be that angry Housewife of NJ defending Paul. TSB you're a bad boy for not deleting that Sendro comment, considering that what was said about Joe was downright despicable. Lot of Thin skinned people in this industry.
ReplyDeleteSendro's rabbi? No I'm Joe's parole officer. Seriously, I got no dog in the fight, It just seems that TSB takes sides in some of these squabbles.
ReplyDeleteIf someone is offended that TSB did not delete the Sendro comment, they did not see what was said about Joe. Wazz amatta, your nose bent out of joint? Waddaya want? Fogettaboutit.
ReplyDeleteHas anyone heard any concerns of surgeons using PEEK and seeing a 'halo'on MRI as bone doesn't grow on PEEK. Could this be an opportunity for Amedica's silicon nitride? Or is this just BS?
ReplyDeleteStart your own blog and keep and delete whatever you want. After reading Sendro's bio on the Amedica site (dont know the guy)..it is amazing after hearing of his exploits, he would even want (or could) stay in this business
ReplyDeleteFrom Amedica's website,
ReplyDeletePrior to US Spine, Paul served as the President and CEO of Vertebron, where he was brought in to rebuild the organization and increase the company sales and profitability, which he did, before the company was sold to Cardo Medical in 2009.
Before Vertebron, Mr. Sendro spent 6 years at Blackstone Medical where he began as the Vice President of Marketing, and eventually took over as Vice President of Domestic Sales. During his tenure at Blackstone, Paul developed and implemented the company's strategic sales plan for accelerated growth and profitability, and restructured the sales management and distribution organization.
Entertaining to say the least, wasn't Vertebron sold for pennies on the dollar? Brings back the days of doing psilocybin. Yeah, he developed a lot of things on the back of others. Sendro, a legend in his own mind.
PEEK is slick-halos are observed, unconsolidated bone inside the cage has been observed as well with PEEK--that being said there is an awful lot of PEEK cages being implanted with good results.
ReplyDeleteAmazingly funny to see the castoffs on this board taking shots at other people in between tranny porn sessions. You know who you are.
ReplyDeletewhat a bunch of hypocrites! the holy than thou among us that walk on water. this business is about generating sales dollars for commission. it is not about being benevolent. we all make decisions based on the commission and no one does this for free. sometimes bad decisions are made and you look for another opportunity. if you feel different look for something else to do.
ReplyDeleteThere's only one man that walked on water, his name, Jesus. Bad decisions, are working for the previously named parasites. RIP
ReplyDeleteAnd he new exactly where the posts were under the surface, so he cheated.
ReplyDeleteA man only hears what he wants to hear and disregards the rest, la da da, la di di di di di di
ReplyDeleteI like Paul Sendro. I don't understand all the slams. I know Bruce Kahlili. Anyone who knows what happened at Vertebron knows very well that was all Bruce, not Paul, that caused the failure. (not too mention Hosam and Anan)
ReplyDeleteI like Paul too, but if anything he lacks backbone. He sold out to the Lyons Brothers.
ReplyDeleteAnyone know what implants Dr. Makker used? He gave 2 reasons for his high revision rate: 1. He sees a high number of "patients that nobody else wants to see." and 2. He had a problem with implant quality and has since switched vendors. I'm curious as to what vendor he used and who he switched to?
ReplyDeleteThat's the very first time implant quality being used as an excuse.
ReplyDeleteImplant design is another matter. There have been the Dunn anterior instrumentation which lacerated or eroded through the aorta (1980s), the Graf ligaments which did not hold it together (1990s), early generation cervical plates with high incidence of screw back out (1980s), and first generation polymer sandwich discs which delaminated (1990s). And then there was IDET, which was not so much a design issue as a fallacious concept. One wonders what will be next. Dynesys? X-stop?
So, the if implant quality is unlikely, one has to start looking at two more likely factors: poor surgical technique and wrong indications.
At 4:28... during the dates of investigation Makker was using Stryker. I don't think it was an equipment issue. He was just a greedy surgeon. I believe his POD deal was started last summer. From what I understand he switched equipment to ATEC after another distributor blocked access to another companies system from which they had exclusive territory rights.
ReplyDeleteBuilding a book of business is, indeed, very difficult these days. I did it when I started in spine many years ago, but the market has changed dramatically. There are so many companies selling spine, most with little to no market share and doing all they can to generate some sales. Luckily, I got in and built a territory before the deluge of competition. Now, my docs are happy with me and they won't even see other reps because they would have no time to practice medicine. I would hate to get into this market now. I see these poor saps trying to earn a dollar and they fail very consistently, even if they are good. If you do get in to see a doc, nobody has a unique product that is universally appealing. No doc is going to switch to your cervical plate or pedicle screw if they have a rep they are comfy with. If you do generate interest for a specialty product, the you have to gain access to the hospital which can be difficult to impossible. If the new gizmo is not on contract, your company is not on the GPO contract, if the cost is an add on cost to an existing procedure, if there are no billing codes for the doc or the hospital, etc, you are screwed.
ReplyDeleteI think this is why companies now look at territories by surgeon or hospital, versus a geography. Most successful reps cover a relatively small geography because you can't manage too much area or too many surgeons and provide the level of service thats expected these days. So when a rep moves companies, he's only valuable in his familiar territory, he is in the same boat as the saps mentioned earlier if he attempts to grow outside his territory.
As much as people seems to dislike or admonish that territory model, it still makes sense for the smaller companies if they are going to maximize their opportunities. We work in a largely commoditized market where relationships determine product selection. It is really inevitable for companies to move in this direction when you think about it his way.
5:47am.....after 10+ years in this business; I fully agree with you. If its not a royalty stream, an inappropriate Corporate relationship, or nepotism.....then it boils down to who has done the best job building a trust relationship with the physician. It carries the day. The only issue then, is all the "poaching" of people and "complete disregard" for Covenants and Restrictions that individuals and their employers have entered into in good faith. When the Manufacturers voracious appetite for growth and greed supercedes their commitment to the folks they have hired; they set themselves up for the Seller's disregard for their covenants. ......and the beat goes on!!!!
ReplyDelete