5. Metal Screws, Pins, Plates, and Rods (Traumatic Fracture Repair)
> Number of procedures: 453,000
> Total annual expenditure: $4.5 billion
> Average cost per procedure: $2,000-$20,000
> Major manufacturer: Synthes (50%)
Bone fractures are one of the most common injuries, occurring in all age groups for a multitude of reasons. Of over one million fractures that are admitted to the hospital every year, roughly half require surgical intervention to realign and stabilize the bone, a procedure called open reduction and internal fixation. This procedure occurs on almost every bone in the body, from tiny carpals in the wrist secured with plates no more than half an inch long, to femurs (the largest bone in the body) requiring foot-long rods, screws and pins to hold the bone together. In 2007, the last reporting year, there were 453,000 procedures performed, an increase of 6.8% from 2003. While the techniques and implants needed to perform these surgeries on the different sites of the body vary widely, the provider of those implant materials usually does not. Synthes has been the dominant force in the market since the merger of Stratec Medical and Synthes USA in 1999. It brought in approximately $1.4 billion in U.S. sales of traumatic-repair devices in 2010.
4. Artificial Knees
> Number of procedures: 543,000
> Total annual expenditure: $12 billion
> Average cost per procedure: $22,000
> Major manufacturer: Zimmer (24%), Depuy/J&J, Stryker, Biomet, Smith & Nephew
As the other major, replaceable weight bearing joints in the leg, knees frequently wear down faster and in a more disabling fashion than other joints. The constant friction and shifting of weight in the joint leads to a breakdown of cartilage and bone, making knees the most frequently replaced joint in the body. Over 90% of total knee replacements lead to a reduction or elimination of pain and an increase in mobility. Over the long-term, there is a 10% failure rate (need for re-replacement) after 10 years, and a 20% failure rate after 20 years. While DePuy of Johnson & Johnson had a minor recall of its knee products in 2008 without effecting implanted patients, there has not been a major recall since Smith & Nephew’s “loose joint” failure in 2003. Due to the relative stability of the knee market, the five major manufacturers hold between 11% and 24% shares. In 2010, Stryker reported approximately $750 million in U.S. sales of their knee replacement products, a 10% increase from 2009.
3. Coronary Stents
> Number of procedures: 560,000
> Total annual expenditure: $7.5 billion
> Average cost per procedure: $13,000
> Major manufacturer: Boston Scientific (46%), Abbott Laboratories
Coronary stents are small tubes, usually coated with a drug (drug-eluting stents), that are placed into the arteries that supply blood to the heart. Stents are regularly implanted into patients with unstable angina (unpredictable chest pain) and recent heart attack patients whose coronary arteries have been partially blocked by atherosclerotic lesions (cholesterol). In 2007, the last reporting year, 560,000 stent procedures were performed, a decrease of 2.4% from 2003. Complications from stents include stent thrombosis (clots), stent fracture, and re-occlusion (blood-vessel blockage). However, the risks of these complications are hard to quantify when overall decrease in death and disability is taken into account. One of the three major manufacturers, Johnson & Johnson recently decided to withdraw from the market. Meanwhile, Boston Scientific, the owner of a 46% market share as of 2010, has recently disclosed a new recall of 100,000 unimplanted stents due to failure to deploy (those already implanted are not at an increased risk of failure). These two events pose a great opportunity for Abbott Laboratories, whose worldwide sales of stent products increased 18.6% to $3.2 billion in 2010 compared to 2009.
2. Ear Tubes (Tympanostomy Tubes)
> Number of procedures: 715,000
> Total annual expenditure: $1 billion-$2 billion
> Average cost per procedure: $1,000-$4,500
> Major manufacturer: N/A
Otitis Media, or middle ear infection, is one of the most frequently diagnosed childhood diseases with at least 80% of pre-school aged children affected. Billions of dollars are spent every year on doctor visits, medicines, and, in chronic cases, surgery. In 2006, the last reporting year, there were 715,000 procedures performed, an increase of 40% over 10 years. In contrast to the rise in numbers, multiple long-term studies have concluded that as many as a third of these procedures are unnecessary. The surgery itself, known as myringotomy and tube placement, is the most commonly performed pediatric operation. It’s very safe, very quick, and has very low complication rates. Due to the incredibly low cost of the tubes, and the fact that they have been evolving for well over 50 years, no one manufacturer appears to dominate the market.
1. Artificial Eye Lenses (Psuedophakos)
> No. of procedures: 2.582 million
> Total annual expenditure: $8 billion – $10 billion
> Average cost per eye: $3,200-$4,500, depending on lens type
> Major manufacturers: Alcon Laboratories/Novartis, Abbott Laboratories, Bausch & Lomb
Cataracts are a problem faced by millions of elderly Americans yearly, many of whom will require surgical replacement of their own lens with an artificial one, known as a psuedophakos or intra-ocular lens. These lenses come in many configurations, such as single-focus (like glasses for distance vision), multi-focal lenses (like bifocal glasses), and hi-tech variable-focus lenses (like real eyes). In 2006, the last reporting year, there were over 2.5 million procedures performed — an increase of 43% over 10 years. While the vast majority of cataract surgery is safe and effective, there is a 1%-2% chance of retinal detachment over the rest of the patient’s lifetime. If this occurs and is not treated promptly, patients can completely lose their vision in the effected eye. While researchers are examining non-surgical treatments for cataracts, surgery is currently the only real treatment or cure. The market leader in intra-ocular lenses, Alcon Laboratories, had sales of $1.2 billion in 2010. Alcon recently merged with Novartis.
Baxter Allen, MD