11. Implantable Cardioverter Defibrillators
> Number of procedures: 133,262
> Total annual expenditure: $5.5 billion
> Average cost per procedure: $40,000
> Major manufacturer: Medtronic (40%), St. Jude Medical, and Boston Scientific
Cardiac arrhythmia, or improper electric signaling in the heart, occurs in millions of people a year. While the vast majority are benign, a select few — usually in patients with a history of heart attack or heart failure — can be fatal if not treated promptly. Implantable cardioverter defibrillators (ICDs) are devices that monitor and treat these rhythms when they are detected by sending a large jolt of electricity to the heart, and basically pressing the reset button. Newer models can also function as pacemakers, combining two devices into one. In 2009, according to the World Society of Arrhythmias, 133,262 ICDs were implanted in the U.S., an increase of 12% from 2005. Complications of ICDs are similar to their pacemaker siblings: 1%-2% rates of infection and up to a 4% rate of lead failure. While these devices are major life-saving technology, the U.S. Department of Justice has been investigating the industry since March 2010 due to the widespread practice of implanting the devices too soon after a major cardiac event. One of the major manufacturers, Boston Scientific, acknowledged that the investigation is likely to hurt sales in the short term. St. Jude Medical, which is the second largest manufacturer behind Medtronic, was the only one of the big three manufacturers to post an improvement in sales of ICDs from 2009 to 2010, with total sales increasing 14% to $1.1 billion in the U.S.
10. Artificial Hips
> Number of procedures: 230,000
> Total annual expenditure: $10.5 billion
> Average cost per procedure: $45,000
> Major manufacturers: Zimmer (24%), Stryker, DePuy/J&J, Biomet, Wright Medical
As people age and gain weight the wear and tear on their joints builds up. In particular, more than 20 million Americans suffer from degenerative osteoarthritis, which is the leading cause of chronic disability in the U.S. As one of three major weight bearing joints in the leg (the others being knees and ankles), hips are put under a lot of stress over a lifetime. This stress commonly leads to the wearing down of cartilage and the painful friction of bone rubbing against bone. Hip replacement can lead to a decrease in pain and an increase in mobility in over 90% of recipients. In 2007, the last reporting year, 230,000 procedures were performed, an increase of 4.5% from 2003. Major complications are relatively rare at about 3% for first time procedures and 8% for revisions. But when friction or a faulty manufacturing process wears down the replaced joint at a faster rate than anticipated, replacement of the hip can be necessary earlier than expected. In August 2010, DePuy of Johnson & Johnson recalled a hip replacement system that had already been implanted in 93,000 patients worldwide. The recalled joints failed in one out of eight patients after only five years. These failures, in addition to requiring a new hip replacement, can leave behind fragments that can become focal points for infections, cause nerve and vessel damage, and possibly even lead to death. Major class-action lawsuits have been filed, and it will be years before the complete impact of this recall is known on DePuy and Johnson & Johnson. This is likely good news for market leader Zimmer Holdings, which had approximately $750 million in U.S. sales of hip replacements in 2010.
9. Heart Pacemakers
> Number of procedures: 235,567
> Total annual expenditure: $4.5 billion
> Average cost per procedure: $20,000
> Major manufacturers: Medtronic (40%), St. Jude Medical, Boston Scientific
As with ICDs, pacemakers are used to treat abnormal rhythms in the heart. While ICDs treat otherwise fatal rhythms, pacemakers are used when the heart’s internal clock is not maintaining a fast enough pace. Pacemakers override the aberrant signals in the heart by passing small jolts of electricity to multiple parts of the heart muscle, providing its own rhythm. Modern pacemakers will increase with exercise and decrease with rest to meet the body’s minute to minute needs. In 2009, according to the World Society of Arrhythmias, 235,567 pacemakers were implanted in the U.S., an increase of 5.5% from 2005. Complications of the surgery include a 1%-2% rate of either short- or long-term infection and, more importantly, up to a 4% rate of lead malfunction. In 2005, Medtronic, the industry leader, voluntarily recalled 40,000 pacemakers found to have a 0.17%-0.30% lifetime failure rate, with approximately 100 known device failures found overall. In the 2011 fiscal year, Medtronic posted $1.9 billion in worldwide sales of pacing systems (approximately $1 billion in the U.S.). This was a slight decline from the previous year caused by pricing pressures and a delay in the FDA approval of Medtronic’s newest pacemaker system.
8. Breast Implants
> No. of procedures: 366,000
> Total annual expenditure: $992 million
> Average cost per procedure: $3,351
> Major manufacturers: Allergan, Mentor
Breast augmentation with implants is the most frequently performed plastic surgery procedure in the U.S., beating out nose jobs (252,261), eyelid surgery (208,764), and liposuction (203,106) by a significant margin. Over 296,000 procedures were done in 2010 for purely cosmetic reasons, with an additional 70,000 done for reconstruction after a mastectomy, a rise of 39% and 18%, respectively, since 2000. The American Society of Plastic Surgeons reported $992 million spent on breast augmentation in 2010, but did not give an amount for reconstructive surgeries. In the mid-1990s, Dow Corning Corporation sought and received bankruptcy protection in the face of 19,000 silicone breast-implant sickness lawsuits. Due to the increased public criticism, the FDA has since closely monitored breast implants in the U.S., with implants of only two companies currently approved by the FDA for cosmetic use. Allergan, an independent pharmaceuticals company, which also manufactures Botox, pulled in sales of $319.1 million from breast augmentation. Sales numbers are unavailable for Mentor, a stand-alone business unit of pharmaceutical giant Johnson & Johnson.
7. Spine Screws, Rods, and Artificial Discs (Spinal Fusion Hardware)
> Number of procedures: 413,000
> Total annual expenditure: $10 billion
> Average cost per procedure: $25,000
> Major manufacturer: Medtronic (35%)
Spinal fusion surgeries are performed for a variety of back problems, mainly for pain and weakness. The surgery essentially fuses two or more vertebrae with the help of hardware such as screws and rods. An alternative in a number of these cases and a simpler procedure overall, decompressive surgery removes part of the bone to free a trapped nerve. Despite evidence that fusion is no more successful than the less costly decompressive surgery in many cases, the frequency of fusion surgeries rose 111% from 1998 to 2008. That’s compared to a 1.2% decline in decompressive surgeries over the same period. While some of this increase may be warranted, a report published in The Wall Street Journal in December 2010 revealed a troubling relationship between some surgeons and the leading spinal device manufacturer, Medtronic. The screws used in these surgeries to drill into bone cost less than $100 each to produce, while reimbursement comes out to between $1,000 and $2,000, depending on the model. A manufactured bone-growth protein also used in many of these surgeries sells for roughly $5,000 per pack. A surgery fusing two vertebrae together can cost $15,000 just for the hardware. Patients of these fusion surgeries are most likely to have the least amount of benefit. A clinical trial now underway is comparing fusion and decompression should have data reported in the next couple years. Hopefully, this will resolve the controversy. In the meantime, Medtronic posted spinal hardware sales of $3.4 billion worldwide during the latest fiscal year, $2.5 billion of which from the U.S. market.
6. IUDs (Intra-Uterine Devices)
> No. of procedures: 425,000
> Total annual expenditure: $340 million
> Average cost per procedure: $800
> Major manufacturers: Teva Pharmaceutical Industries and Bayer HealthCare
IUDs are extremely popular worldwide and are the preferred method of contraception for almost 25% of women in the rest of the developed world. In the U.S., however, IUDs fell out of favor after a rash of problems with the Dalkon Shield IUD in the late 70s and early 80s. Only 1%-2% of American women were using the device in 2001. As of 2008, nearly 6% of American women using contraception were using IUDs, and that number is likely to increase. This month, the American College of Obstetrics and Gynecology released a Practice Bulletin recommending IUDs and another implant as the most effective reversible contraception — performing better than the pill, the patch and the ring. The most serious complications associated with the devices today are uterine perforation, which occurs in 0.1% of patients, and pelvic inflammatory disease (PID), which occurs in 0.2% to 0.9% of patients. Two forms of IUDs are available in the U.S., with an approximately even split of market share: Paragard, a generic copper-coated IUD offered by Teva Pharmaceutical Industries Ltd; and Mirena, a progesterone-releasing IUD offered by Bayer HealthCare.