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April 30th

The orthopaedics industry is benefiting from advances in technology that allow a patient-specific, just-in-time approach to knee replacement.

 

By combining cross-sectional imaging data and information processing technology, automation software can customize a design.
Total knee replacement is one of the most common surgical procedures in the United States, with more than 540,000 knee-replacement surgeries performed in 2006.1 Refined through three decades of experience, knee replacements initially went through a period of rapid evolution in the first decade after introduction and then settled into a fairly standard procedure for a broad group of patients. Today, older patients with debilitating knee pain will typically be offered a total knee replacement that functions similarly to the one they might have received as far back as 20 years ago.

Yet the traditional, off-the-shelf approach to treating knee osteoarthritis still has clinical drawbacks that leave an equal number of patients, particularly early intervention patients, without an attractive option. In addition, patient satisfaction with total knee replacement has tended to lag behind surgeon satisfaction. Patients are unhappy because of the difficultly in replicating natural knee kinematics using an off-the-shelf prosthesis that is not designed for the individual patient. Moreover, the build-to-stock model results in unnecessary investment that must be borne by both hospitals and manufacturers.

This article explains how advances in technology allows a patient-specific, just-in-time (JIT) approach to knee replacement to take the orthopaedics industry through a new cycle of development. This model, based on personalized knee implants and surgical tools designed using advanced imaging and CAD technology, has the potential to improve outcomes for patients and surgeons and to improve operating efficiencies for hospitals. It also creates opportunities for manufacturers to take advantage of capital-efficient technologies that would not be suitable for the traditional mass-inventory model.

 

CT scans create a digital 3-D image of the knee. A personalized implant, as well as surgical instruments, can be designed using automated software and design rules.

In the existing model, orthopaedics companies produce and hospitals stock hundreds of millions of dollars of variously shaped and sized implants and surgical tools. Surgeons choose an implant from this inventory, working with a limited range of sizes, to best match the implant to the patient. The mismatch between a limited array of implant sizes and the much greater variations found among patients necessitates surgical remodeling of the knee to fit the patient to the implant and also compromises on knee kinematics.

The mass-inventory model uses a large armament of cutting and measurement guides, provided as loaner instrumentation by manufacturers to hospitals at a substantial cost, to perform the surgeries. The necessary removal of sometimes-healthy tissue can slow patients’ recovery and limit their options for future surgery. Furthermore, the extensive metal instruments used for the implant procedure require transport, sterilization, and stocking before and after each surgery, saddling hospitals with the costs associated with managing this inventory. Each of these issues can be addressed to substantial degree by designing, manufacturing, and delivering patient-specific implants and disposable surgical tools on demand. One study, for example, found that current commercial tibial designs for unicompartmental knee replacement typically use only 67% of the cortical bone to support the implant due to the limited range of standard shapes.2

 

Technology Enables an Innovation Curve

Through manufacturing redesign, companies can employ rapid prototyping technologies, such as fused deposition modeling or laser sintering, that are ideally suited for cost-effective small-run production of implants and instruments.

Recent advances in information and manufacturing technology have made this custom, JIT approach feasible for orthopaedics. ConforMIS, for example, was founded in 2004 to develop such a model. The process starts by using a magnetic resonance imaging or computer tomography scan to create a digital 3-D image of the individual patient’s knee. Using software automation and design rules created by a scientific advisory board, a personalized knee implant as well as surgical instruments are designed and manufactured. The system is delivered in a small, one-way package. Every component of the system is either implanted in the patient or discarded.

Because all components of the system are made for one-time use, this patient-specific approach to orthopaedics creates many opportunities for business model innovation. Three examples of reconstructing the business model include rethinking design, rethinking manufacturing, and rethinking the customer supply chain.

Rethinking Design

Traditional orthopedic implants use measurements or scans from a sampling of patients or cadavers to guide the design process. Although the sample size varies, the principle approach uses sample averages to set the parameters of the design objectives, often neglecting potential variations and dispersion from the average.3 Some attempts to fine-tune the approach have incorporated race and gender as variables, but these designs still rely on averages.4,5

By combining cross-sectional imaging data and information processing technology, a new approach uses automation software to dedicate a design to an individual patient rather than to an average of patient sizes. Proprietary software, loaded with proven design algorithms, now processes full implant designs within a matter of seconds, eliminating the design time and cost disadvantage of custom implants. In fact, the use of electronic design files creates opportunities for efficiency throughout the entire manufacturing process.

Rethinking Manufacturing

When it comes to manufacturing, the traditional method has been to invest in production runs scaled to create medium to large stock inventories of both implant components and their associated surgical tools. A large manufacturer, for example, typically invests more than $150 million each year to create instruments with an average depreciation period of three to five years, depending on the life cycle of the implant system. The traditional manufacturing model focuses on process standardization for longer production runs.

 
Personalized knee implants and disposable surgical tools are cleaned and sterilized before arriving at the hospital to reduce time and money spent by the hospital before and after surgery.
By moving to a patient-specific approach, a host of technologies can be introduced that have been developed in the direct digital manufacturing area over the last decade. Through manufacturing redesign, rapid prototyping technologies such as fused deposition modeling, laser sintering, or direct metal laser sintering are employed. These techniques are ideally suited for cost-effective small-run production of implants and instruments.

Technologies completely unsuitable for orthopaedics using traditional approaches become suitable and cost-competitive in a patient-specific approach. For example, rather than amortizing the cost of a $15,000–$20,000 metal instrument set, direct digital manufacturing uses inexpensive engineered materials to enable single-use instrument sets at a radically reduced cost per surgery. Indeed, lower inventory carrying costs and the opportunity to introduce rapid product iterations without replacing field inventory helps turn JIT production into a competitive advantage.

 

Rethinking the Customer Supply Chain

 Hospitals typically do not have a full accounting of the costs they incur in their relationships with orthopedic manufacturers. It is likely that a full and complete activity-based cost analysis would demonstrate that hundreds of dollars in central supply costs are incurred for every knee replacement. And substantial opportunities for reengineering the work flow would exist if a critical mass of consigned or loaner inventory were no longer available.

A fully patient-specific approach encompassing both the implant and instrumentation allows for radically simplified logistics and work flow. The full system is shipped to the hospital in a one-way tray. At the hospital, transport and setup involve unpacking the single tray in one small area, and then disposing of all components after surgery. Tear down and disposal consumes far less time, sterilizer usage, and central supply personnel. For the manufacturer, the entire set of activities required for inventory tracking and management at the customer site is completely eliminated.

Patient-specific approaches have allowed a move to a new business model. This model presents an innovation curve in orthopaedics with expansive possibilities. This revolution will quickly have the entire industry talking about patient-specific systems as the next key developments in the industry. 

References

1. Executive Summary, “The Burden of Musculoskeletal Diseases in the United States” (Rosemont, IL: United States Bone and Joint Decade, 2008).

2. C Fitzpatrick et al., “Statistical Design of Unicompartmental Tibial Implants and Comparison to Current Devices,” Knee 14, no. 2 (2007): 138–144.

3. K Hitt et al., “Anthropometric Measurements of the Human Knee: Correlation to Sizing of Current Knee Arthroplasty Systems,” Journal of Bone Joint Surgery 85 (2003): 115–122.

4. KR Chin et al., “Intraoperative Measurements of Male and Female Distal Femurs during Primary Total Knee Arthroplasty,” Journal of Knee Surgery 15, no. 4 (2002): 213–217.

5. SV Vaidya et al., “Anthropometric Measurements to Design Total Knee Prostheses for the Indian Population, Journal of Arthroplasty 15, no. 1 (2000): 79–85.

Philip Licari is chief operating officer of ConforMIS Inc. (Burlington, MA).

 

Philip Licari, ConforMIS Inc.
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PRECISION RESOURCES

The acquisition of a 30,000-sq-ft facility gives Millstone Medical Outsourcing (Fall River, MA) more space and capacity for advanced inspection and cleanroom services. The company now has two locations in Fall River, along with a site in Memphis that provides loaner kit processing and distribution services. The new facility enables Millstone Medical, an outsourcing partner to orthopedic companies, to scale consumer growth and solve specialized inspection, packaging, and distribution challenges. An advanced mechanical inspection cell will house optical comparators, coordinate measuring machines, vision systems, microhites, and other equipment. The site’s 5000-sq-ft cleanroom incorporates ultrasonic clean lines within environmentally controlled areas. The site can also be remotely monitored for particulate and environmental conditions.


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Although some fallout can be expected, the demand for orthopedic implants and other treatments is likely to pick up speed.

Market Outlook


Photos courtesy of SMALL BONE INNOVATIONS INC.
The worldwide orthopedic device industry has been growing consistently during the past 20 years or so, in concert with growth in overall healthcare expenditures. Historically, it has been recessionproof with positive year-over-year price growth, even during periods of economic decline.


This is not to say that the industry will emerge unscathed from the next year or so, because the depth of the current recession is plainly much greater than those since World War II. However, the drivers of past growth appear undiminished.


Figure 1. (click to enlarge) Orthopedic implant list price growth. Implant pricing has achieved 156% cumulative growth over 15 years. Source: Orthopedic Network News.
The industry’s growth has been sustained by technological innovation and increasing specialization among surgeons. Such innovation has stimulated unit sales increases of hip, knee, and spinal implants, and more recently, treatments for the smaller bones and joints in the extremities. In addition, prices and reimbursement levels for these devices have also defied gravity, registering increases in the 5–10% range during the past three recessions with a cumulative growth of more than 150% since 1990 (see Figure 1).


Figure 2. (click to enlarge) Comparison of the two particulate methods. Light obscuration is the method preferred by USP and should be the default method unless a sample necessitates the microscopic method.
How will the current recession affect this pattern of growth? There will be some fallout in the areas of innovation and integration of new technologies, funded with venture capital, that have helped to transform the industry. However, demand for clinically proven surgical implants and other treatments for musculoskeletal disease and trauma is likely to accelerate rather than slow (see Figure 2).


Simply put, the aging population and the growing insistence to preserve the physical form and functionality is irresistible. People want to work and play longer, but the human body is not built to last as long as people are now living. As a result, virtually everyone who lives into old age will suffer some form of orthopedic injury or disease such as arthritis.


For example, the Centers for Disease Control and Prevention is monitoring the total economic impact of arthritis, estimating its cost at $128 billion annually in 2003. Another disease that is already epidemic is diabetes. When left untreated, the condition results in more than 75,000 lower-limb amputations a year. The technology already exists not only to prevent the need for such radical surgery but also to restore limb functionality and better quality of life for those patients.


The twin threats of constant growth and the global spread of arthritis and diabetes are unlikely to abate, because they share an intrinsic link to economic advances. This is particularly true in the world’s most populous nations—China and India. As people live longer and consume more calories, they are more likely to be affected by these conditions.


This trend is also illustrated by the increasing share of sales by major orthopedic device manufacturers outside the United States. In 2008, the hips and knees sector saw revenue growth of more than 17% outside the United States. According to figures published by the major implant manufacturers, this was more than double the amount of growth within the United States.


The Future Outlook


Having said so much about how bright things look in orthopedic devices, it would be remiss not to mention that stock valuations of the major manufacturers have suffered out of proportion. Depending on which index is read, Viscogliosi Bros estimated that the median drop in orthopedics stocks was around 33% in 2008, making them seem incredibly cheap. Here, cheap is a measure of a stock’s historical price/earnings ratio, and in this case, the poor performance of orthopedic stocks in comparison with past recessions.


However, the firm’s constant monitor of the levels and types of procedures being performed at major orthopedics centers in hospitals and specialty practices showed that nearly all centers achieved record levels of surgeries this past year. For example, one of the top five orthopedic specialty practices in the United States reported record high revenues and earnings in 2008, based on more than 17,000 surgeries. Approximately 13,000 of those were elective surgeries. During October 2008, which was disastrous for most industries, this particular practice had its largest revenue month ever.


The majority of procedures nationwide have been elective surgeries. Perhaps surprisingly, those have remained much more constant in unit-growth terms than nonelective trauma procedures.


Statistically, nonelective procedures have trended lower during economic downturns. The reason is possibly due to reductions in activities such as skiing (which tend to be risky), or fewer road accidents, because people are staying home more often.


The outlook for healthcare revenues generally remains firm despite the compelling need to rein in the rate of growth. This need refers to the continuing growth of healthcare expenses in the United States, measured by the percent of gross national product spent on healthcare versus the underlying cost inflation level. The outlook for orthopedic devices continues to be encouraging because of unabated demand. However, prices are likely to soften as the publicly financed portion of healthcare such as Medicare and Medicaid continues to outpace the private sector.


Tectonic Shift


Related to the underlying trends in financing and innovation, there are structural changes in the industry. Orthopedics manufacturing is beginning to undergo a tectonic shift in structure and complexion. Overall revenues are forecast by the major, publicly traded corporations to grow worldwide by 7–9%, largely through continuing hip, knee, and spine expansion. This sector represents more than 80% of the market and has been yielding profit margins in the $8000–$10,000 range per unit sold.


Orthopedic Physician Practice Numbers

Data show strong numbers from one of the five largest orthopedic specialty physician practices in the United States. The practice performs more than 17,000 orthopedic surgeries annually. It saw record revenues and profits, with October 2008 being its highest revenue month ever.

13,000
Elective surgeries (76%)

7200
Joint replacements (55%)

3500
Sports medicine (27%)

2500
Spine (19%)

The information was taken from Viscogliosi Bros interviews with management of specialty orthopedic practices conducted in December 2008.
However, price increases are expected to slow considerably, perhaps down to a range of 1–2%, while reimbursement will stay even or slightly higher. Midsize companies with established products or those with dominant shares in niche markets are hoping to maintain up to 20% in global growth rates. Some of the smaller players could do even better. However, underneath those headlines, the current economic climate is beginning to ravage many of the hundreds of companies with premarket or clinically immature technologies.


For example, by the author’s estimates, there are at least 200 companies offering some form of spine treatment. These firms remain dependent on the availability of private investment capital to survive and navigate the increasingly high cost of securing FDA clearance. They are also tasked with persuading payers to reimburse the use of their products.


Right now, venture capital firms, as well as entities such as sovereign wealth funds, have less cash available and face the prospect of dwindling sources of supply. That translates to a drive for deeper due diligence, shorter profit horizons, and a reduced appetite for risk.


For most, this means turning attention to existing investments and putting pressure on client companies to accelerate development or find a buyer at currently depressed valuations. The buyer is likely to be one of the major, cash-rich device companies. For example, according to Global Markets Direct’s medical equipment deals database, there were 42 mergers and acquisitions signed in the orthopedics devices market. Joint reconstruction, spine, and orthobiologics companies accounted for 70% of the deal volume. In the past two years, the French orthopedic company Tornier acquired Nexa Orthopedics, BioProfile, DVO Extremity Solutions, and Axya Medical to significantly expand its products in the extremities (small bone and joint) market.


If the past is a prelude, orthopedics could experience a substantial or even precipitous fall in innovation as the industry becomes increasingly risk averse. Given the five- to seven-year premarket development time it generally takes to launch a new product, this suggests a lengthy stretch of inactivity. This is not good news for patients.


Small Bone Innovations hopes to launch its S.T.A.R. Ankle Replacement System this year. It would be the first FDA-cleared three-piece, uncemented ankle replacement.
As an example of the time-to-market lag, the Scandinavian Total Ankle Replacement (S.T.A.R.) prosthesis has been used clinically since 1990 and has been implanted in more than 14,500 patients worldwide. Its U.S. investigational device exemption clinical trials were initiated in 2000, yet nearly a decade later, the product still isn’t available to patients in this country.


The landscape is not completely barren, of course. Patients are benefiting, or will soon benefit, from a series of innovations that have come through the approval process and will fill unmet needs. These products include hip and knee implants designed for gender-specific anatomies, biodegradable implants that support healing in smaller joints, and the above-mentioned total ankle replacement.


Despite the issues illustrated by S.T.A.R., this does indicate a path that others may follow in pursuing the introduction of truly innovative and potentially life-changing technologies in the United States. The costs and years that it takes to obtain FDA approval for a new device is considered worthwhile, because if a company is first to market in the United States, it can have several years of exclusivity before a competitor comes along.


Smaller Options


Until quite recently, there were comparatively few treatment options for repairing or replacing diseased bones and joints. Because of the trend toward specialization among orthopedic surgeons and the corresponding growth in both resources and technological development, patients are benefiting from a wider spectrum of treatment options.


In virtually all anatomies affected by arthritis, orthopedic surgeons can choose a course of treatment using an algorithm that matches the degree of severity with the appropriate treatment. In the past, the surgeon may have had only one or two choices—conservative or radical. A surgeon may now have a choice of half a dozen or more implants, biomaterials, or fixation devices.


The growth of diabetes in the United States has led to more than 70,000 lower limb amputations. Exterior fixation technologies (above) are helping foot and ankle surgeons salvage affected limbs.

This variety is especially prevalent in the small bone and joint market. Although it represents a fraction of the $38 billion orthopedic device market, it is the fastest growing sector at a gain of 15% in estimated revenues during 2008 versus 2007, according to analyst estimates.


During 2009, there will be about 60 million visits to the doctor or surgeon by Americans with complaints relating to their small bones and joints. Those can be defined as being located from the tips of the finger to the shoulder, and from below the knee to the toes.


Conclusion


The outlook for orthopedic devices will continue to be encouraging despite the current economic slowdown. Partially because our affluent society is going global, well-established procedures in hip, knee, and spine will be joined by newer products to fix upper and lower limb problems. Everyone wants to live longer, stay active, and remain pain free.



Full disclosure: Viscogliosi Bros has a significant interest in the S.T.A.R. prosthesis through its investment in Small Bone Innovations Inc. (New York City).


Anthony G. Viscogliosi is a principal at Viscogliosi Bros LLC (New York City).


Anthony G. Viscogliosi, Viscogliosi Bros LLC
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Advanced CNC software can help shave time off prototyping for complex medical device components.

Prototyping

Swiss style is a type of machine programming. Software such as ESPRIT provides factory-certified programming options for Swiss-style machines from leading machine builders.
Medical device manufacturers that need to test their designs require a quick turnaround. Advanced computer numerical control (CNC) programming software can help medical prototype manufacturers produce components with more-complex geometries in less time. The software makes it possible for such manufacturers to take on jobs that would be too time-consuming otherwise (i.e., if they had to program by hand). For example, advanced CNC programming software makes it possible to write programs for four-axis lathes in about an hour. Programs for wire electrical-discharge machining (EDM) can be written in 10–
15 minutes. Such program-writing times are considerably faster than what can be accomplished with conventional CNC programming software or by using manual programming methods. Advanced CNC programming software is particularly powerful when it is used to support advanced manufacturing technologies such as direct metal laser sintering (DMLS); the software can quickly write programs for DMLS parts that need subsequent machining.
 
CNC machining is used to produce a wide range of medical equipment due to its ability to produce components with complex geometry while holding high levels of accuracy. Examples of typical components produced by CNC machining include spinal implants, orthopedic devices, surgical instruments, surgical simulator systems, collimators for CT scanner systems, and PET scanner components. Programming is akin to cutting out the first piece by hand. Once it is completed, other pieces can be produced without the attention of a person except for loading raw materials and unloading finished pieces on the machine (although operators should occasionally check to ensure that the tool hasn’t worn out or broken). Powerful cutting-edge software such as that discussed in this article makes it possible to program even the most complicated parts in a surprisingly short amount of time.

DMLS is an additive technology that builds parts by sintering very fine layers of metal powders layer by layer from the bottom up, until the part is complete. With DMLS, 20-μm-diam metal powder is completely melted by the scanning of a high-power laser beam—free of a binder or fluxing agent—to build the part with properties of the original material. Eliminating the polymer binder avoids the burnoff and infiltration steps, and it produces a 95% dense steel part compared with roughly 70% density with selective laser sintering (SLS). DMLS is used primarily for small, complex parts (typically smaller than 10 × 10 × 10 in.) that would be time-consuming and expensive to make using traditional methodologies.

CNC software provides many options for manufacturing orthopaedic instruments.

Applications for DMLS are wide-ranging and include inserts for plastic injection molding and die casting, as well as direct parts for a variety of applications. Typical DMLS medical applications include cranio-maxillofacial implants,
orthopedic instruments and saw guides, arthroscopy and key hole instruments, and custom devices. With the emergence of advanced materials such as the super-alloy cobalt chromium and 17-4 PH stainless steel, coupled with the design freedoms this technology offers, new applications are constantly being discovered. But many medical components require higher levels of accuracy than can be achieved with DMLS alone. In such cases, DMLS is used to produce a part that is larger than the net shape. Then machining is used to produce the part to its final dimensions.

 Advent of Multifunction Machines

 The latest multifunction systems machine with two live spindles, live tooling, and a y-axis for milling off-center. These machines are ideally suited for machining after DMLS. They provide the capability to condense what previously took three or four operations into a single operation, thereby reducing setup and cycle time and improving quality. But multifunction machines also substantially increase the complexity of the programming task. The operations are the same, but performing several of them simultaneously is much harder to choreograph.

Sophisticated CNC software can help manufacturers obtain unique shapes.

A customer’s solid model can be directly imported into advanced CNC software programs and then opened and oriented for manufacturing. Preliminary toolpaths are applied to the geometry to get an idea of how long the job will take. In the case of parts that will be machined on the lathe, a feature is selected that automatically creates a turning profile. The software examines the solid model and adjusts the turning so that it doesn’t violate the square, which can then be milled later. A machine definitions library includes a template that accurately reflects every component in the machine, including the spindle, chuck, and tooling. The library eliminates the need to manually define the machine geometry and also enables the machinist to identify potential interferences on the computer in order to avoid crashes on the shop floor.
 

Integrating the Solid Model

The CNC software is then used to automatically identify the part features of the solid model. In the majority of cases, the CNC software recognizes every feature in the part. When it misses a feature, an operator can go in manually and define the feature. This capability saves a considerable amount of time. The software also attempts to organize the features into a logical order for machining and usually performs this task well. To change the order of a feature, the user can drag and drop the feature into a different position in the sequence. The simple change options make it easy to reorganize machine operations to reduce cycle time, primarily by reducing the amount of time that the tool is cutting air.

The next step is applying machining operations to each feature. Advanced CNC software enables users to create a knowledge base of preoptimized machining operations that include a particular tool, cutting speed, feed rate, depth of cut, etc. The knowledge base can be used to define carefully optimized machine operations for features that are common to a company’s products. Then the software automatically applies these operations when it encounters similar features. This ensures that the program takes full advantage of the capabilities of the machine and cutting tools. It also saves programming time and cycle time for future parts that utilize a similar feature. The use of standardized operations optimizes productivity and reduces machining time.

 

Programmers can manually define toolpaths for parts with complex geometries.

Advanced CNC software provides a wide range of options for harnessing the special capabilities of multifunction machines. For example, there are eight different options for clearance planes used for entering or exiting the cut. The tool rapidly advances to the clearance plane to avoid wasting time cutting air. The tool can also enter in the z-axis by recognizing the x-axis position of the cut and feeding in from a perpendicular direction. This is also done to avoid wasting time cutting air. The CNC software saves additional time by automatically recognizing where holes start and stop, even if they are on an angle or counter-bored. The tool is automatically rapid traversed to the beginning of the cut without cutting air.

Optimizing Multifunction Machining Operations

A key strength of advanced CNC programming software is the collection of tools that it provides to optimize the operation of a multifunction machine. After the operations have been created, the CNC software makes it easy to assign them to different turrets, change their sequence, and synchronize operations in different turrets. The programmer can then view a simulation that shows the machine, turrets, spindles, tools, and workpiece in real-time operation. The realistic graphical depiction of the machining operation often helps engineers think of ways to improve the CNC program. They might go back and change the order of a few operations or change the sync points and run the simulation again. The comparison function highlights any variation between the part machined by the program and the design intent, such as excess or overremoved material. By a process of continuous improvement, programmers can often use multifunction machines to reduce cycle times for some common components by as much as 80% compared with single-function machines.

Programmers also perform interference checking to fine-tune the program during the simulation. Multitasking machines have more turrets and spindles that move simultaneously, so avoiding crashes such as a tool hitting the machine can be challenging. The ability to visualize the machine, spindle, tooling, fixture, and workpiece makes it possible to do all of the prove-out (checking the program to make sure it works as expected) and debugging at the computer-aided manufacturing station. This station houses PCs used for CNC programming, as opposed to having the PCs on the machine where the parts are produced. Operators can then post directly to the machine tool without any editing.

Wire EDM Programming Process
The programming process is a bit different for wire EDM, although the programmer still imports the customer’s model and orients it for manufacturing. For two-axis wire EDM, the programmer manually applies the chain feature to the part, which identifies what will actually be cut by the wire. The software has an add-in utility that integrates it with the EDM system. The utility works with the EDM system’s technology files to provide the burn settings and offset the toolpath for the overburn of the wire.
 
Shown here is an example of a component created with the aid of the ESPRIT computer-aided manufacturing system.

With four-axis wire EDM, upper and lower heads move independently of each other. In many cases, it takes only a few mouse clicks to begin cutting parts on these machines because the CNC software can recognize the solid model and apply toolpaths automatically. In the more difficult cases, in which the geometry is very complex or there are problems with the solid models, the programmer can manually define the upper and lower toolpaths and link them together.
 

Conclusion

Conventional CNC programming software is designed around the requirements of single-function machines, making it a difficult task to write working programs for multifunction machines and much more difficult to achieve their full potential. Advanced CNC programming software provides a range of tools that make it possible to achieve the full productive potential from multifunction machines. The simulation and postprocessing capabilities make it possible to achieve editless posting, which saves a substantial amount of time spent on these machines.

The result is that medical manufacturers can explore new methods of prototyping, such as four-axis wire EDM and four-axis lathes, to manufacture parts that would be difficult or impossible to manufacture by conventional methods. With the ability to create CNC programs for all but the most exotic shapes in less than an hour, advanced CNC software enables the prototype manufacturer to respond rapidly to its customers’ requests. Use of this new technology might enable the typical medical prototype manufacturer to double its machining throughput.

 

Chuck Mathews is vice president of DP Technology (Camarillo, CA).

 

 

Chuck Mathews
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Precision Resources

Galloway Plastics Inc. (GPI; Lake Bluff, IL) is using a direct metal laser-sintering system from Munich-based Electro Optical Systems GmbH to further expand its core orthopedic device capabilities. The system is a huge step in eliminating the gap between prototyping and production, according to GPI’s president and owner, Scott Galloway. A CAD file defines each layer of a cross-sectioned model, and 20- to 40-µm layers of metal powder are deposited onto a build platform, followed by laser sintering with a focused beam. The system enables mass customization and building of intricate shapes for orthopedic implants. GPI will also use the system to create device tooling, tooling inserts for molds, and short-run or custom metal parts for field use.




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PRECISION RESOURCES

True Tool Innovations (Croydon, NH) is a high-precision grinding manufacturer of standard and special cutting tools and instruments for in-house use and for companies interested in outsourcing. It provides grinding capacity from 0.5 in. diameter down to microsizes in carbide, ceramic, and stainless steels. Tool types range from microend mills to standard industrial tools, along with specialty tools for the orthopedic industry. To meet customer needs, True Tool combines its expertise in cutting tool manufacturing, programming, and applications with tested equipment that has proven precision and reliability. Using a six-axis computer numerical control grinder with advanced filtration systems and chillers, the company can manufacture precise and demanding dimensions at its 5000-sq-ft facility.


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In the new world of product development, more evidence that proves the value of precision manufactured devices will be necessary for product adoption and reimbursement.

Q&A


Stephen Chan
As the squeeze to contain rising healthcare costs becomes tighter and tighter, medical device companies need to prove the value of their technologies now more than ever. This is especially important for manufacturers of complex devices such as orthopedic or cardiovascular implants, as these segments have been facing intense scrutiny.


Demonstrating that a device is safe and effective won’t be enough in the future, according to Stephen Chan, executive director at Boston Healthcare Associates Inc. (Washington, DC). His firm aids companies in identifying the types and levels of evidence needed by providers, hospital administrators, and payers to make decisions about their technologies. It also helps design appropriate study endpoints to assist companies with capturing and demonstrating the true value of their technologies.


Chan has nearly a decade of experience with the healthcare industry and its policies. He currently develops commercialization and reimbursement strategies for manufacturers in the medical device, drug, and biotechnology industries. He recently shared his thoughts about the importance (and necessity) of providing data and evidence for future product development with Med-Tech Precision managing editor Maria Fontanazza.


Q: Can evidence-based medicine or comparative effectiveness help companies recognize the need for data that demonstrate the value of their technologies?


Stephen Chan: There are many data-focused initiatives in healthcare, and they exist in many forms. Medicare has coverage with evidence development. Evidence-based medicine and comparative effectiveness are buzzwords inside the Washington Beltway as policymakers talk about healthcare reform, and several organizations have been doing evidence-based technology assessment for a long time. I’m not going to pretend to know exactly what the end game will look like, but I think that the message is clear—a higher level of evidence will be required for both technology adoption and reimbursement, and this evidence will include clinical data, outcomes data, and economic data.


In the old world, if your technology was proven to be safe and effective, it would be approved, most likely used, and even covered by payers. In the new world, “safe and effective” will not be enough. It will only be the first hurdle—the regulatory hurdle. To overcome the commercial hurdle (used by clinicians and covered by payers), a technology will also need to demonstrate that it is more effective than a therapeutic alternative, whether a device or otherwise; improves patient outcomes; and/or is cost-effective. These criteria have been used in many other parts of the world (most notably in the UK) but largely resisted in the United States. That is about to change, at least to some degree.


The poster child for comparative effectiveness is drug-eluting stents. They have been a topic of debate for many years now. Most recently, at the i2 Summit at the American College of Cardiology meeting at the end of March, the SYNTAX trial data were presented. They indicated that for patients with less-severe triple-vessel or left main disease, drug-eluting stents provide similar clinical outcomes to coronary artery bypass graft (CABG) surgery but demonstrated that drug-eluting stents are more cost-effective. There certainly are caveats to these study results (that we won’t cover here), and this won’t necessarily be the end of this debate, but it really demonstrates that the healthcare community is looking for much more than clinical outcomes when making healthcare decisions.


Q: Can you provide an example of organizations that are looking at comparative effectiveness now? How do some of these reviews affect the readers of Med-Tech Precision?


Chan: The Agency for Healthcare Research and Quality is a government agency that has been tapped by Congress to be a member of the Federal Coordinating Council for Comparative Effectiveness Research. Many think that it will drive any national comparative effectiveness program. Private organizations conducting evidence-based reviews and looking at comparative effectiveness include Hayes [an independent health technology research and consulting company], ECRI Institute, and the Blue Cross Blue Shield (BCBS) Association Technology Evaluation Center (TEC). BCBS TEC uses five criteria to assess whether a technology improves health outcomes such as length of life, quality of life, and functional ability. A quick scan of its Web site reveals eight surgery and surgery-related reviews. Of these, only two meet the TEC criteria. This speaks to the rigor of its review and the level and the quality of evidence that it requires.


Q: What kind of information must companies present in demonstrating the value of their technologies? Is it strictly clinical?


Chan: At the end of the day, clinical data is still king—and it should be. And for those lucky few technologies, which [have] data demonstrating clinical superiority, their path-to-market success will be clearer. But for the vast majority of technologies, they may still be safe and effective and even convey some benefit, but they may have to look beyond clinical data to demonstrate their true value. Outcomes data and economic data are two types that come to mind. If you can effectively put all these pieces together to develop a coherent value argument, your chances of commercial success in the new world are much greater.


Take, for example, the payer decision maker. There is a lot of talk about cost control these days, but payers are not opposed to paying for technologies that bring value. If product X has the same clinical outcomes as what is currently available but costs a bit more, does that mean that the payer will automatically disregard the new technology? Not necessarily. What if product X has the same clinical outcome, but it avoids adverse events? Or gets a patient out of the hospital sooner? Or has some other downstream treatment cost-savings? Each of these items has value, we’ve just traditionally not captured such data.


Gone are the days when you just had to convince the physicians that your product or technology will help their patients. As a developer, you must also consider all the stakeholders along the value chain that may use, cover, or make a purchasing decision about your technology; anyone who is involved in the distribution of your technology; and anyone who may take financial risk for your technology. In the new paradigm, each of these stakeholders represents a key to commercial success, and each of them has a different set of decision drivers. Your development process better understand these stakeholders and decision drivers, and include the collection of data to address these issues.


Q: How can companies stay ahead in this area? Is the solution more funding or industry guidance?


Chan: Unfortunately, I’m not sure that more funding is in the cards these days. In fact, I think we are looking at the opposite scenario where, if anything, company resources are even more restrained. Companies will be asked to provide even more data with fewer resources. What does that mean? Companies will have to be even more efficient in their development processes. Instead of bringing a technology through the development process and then looking at the commercial evidence needs, companies will have to incorporate these needs early in the development process. By doing this, companies reduce the risk of having to go back to collect data (at added costs and time), or even worse, recognizing deep into the development process that a product will not be able to demonstrate the necessary value.


Q: How does the need to demonstrate the value of a technology affect how companies make product development decisions and conduct studies?


Chan: This is a key question for our clients. It’s not enough only to understand the commercial data needs and to incorporate them into development. Companies must use this information, implement a rigorous stage-gate process, and be willing to act on such information. Too often, technologies with moderate or questionable benefit are pushed through the development process only to be withdrawn at a late-stage development, or worse, allowed to fail in the market. Companies must not pursue the development of technologies that do not or cannot meet these higher levels of evidence requirements. And, more importantly, decision makers must not be incentivized to do so.


Maria Fontanazza
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A year and a half after settling with the Department of Justice over payments to physicians, Stryker gets subpoenaed by New Jersey’s attorney general for the same allegation.

FROM THE EDITORS


In 2007, five orthopedics companies settled with the U.S. Department of Justice (DOJ) over allegations that they may have paid kickbacks to surgeons in return for favoring their hip and knee implants. Of those five companies—Biomet, Johnson & Johnson’s DePuy Orthopedics, Smith & Nephew, Stryker, and Zimmer—Stryker cooperated early and thus avoided the hefty fines paid by the other device manufacturers.


But on May 7, Stryker reported to the Securities and Exchange Commission that it had received a subpoena from the attorney general of New Jersey for the same problems. Stryker says the subpoena requests “various documents related to the financial interests and arrangements of physicians participating in certain clinical trials for or on behalf of the company.”


Stryker says that it is evaluating the scope of the subpoena and its response. The company also notes that New Jersey’s attorney general “reportedly issued similar subpoenas to other major medical device manufacturing companies.”


As the practice of physician payments from manufacturers has come to light, the industry has called for more transparency and stricter guidelines. In December 2008, AdvaMed released a new version of its Code of Conduct. Changes in the code emphasize increased restrictions on promotional items and gifts. They also clarify guidelines for conduct for entering into royalty arrangements and introduce parameters for providing products for educative purposes.


The practice of payments to physicians had become so pervasive that it seemed that some firms felt they had to engage in it to remain competitive, particularly in the orthopedics sector. The settlement with the DOJ certainly should have been sufficient incentive for the companies to avoid even the appearance of such activities. It would be a terrible setback for the industry if this subpoena turns up new problems. Or, perhaps this new round of digging by the New Jersey attorney general is unfounded—I, for one, hope so. It’s time to take ethics seriously.


Sherrie Conroy


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BLOG TEASERS

The 18-month federal oversight of four orthopedic device companies has come to an end. In March, the U.S. Attorney’s office in Newark, NJ, dismissed criminal charges that the companies paid thousands of dollars to surgeons who used their devices. The charges were dropped by U.S. Magistrate Judge Madeline Cox Arleo in Newark.


“We are confident that [device companies], which had been engaged in illegal kickback practices to secure market share, have made significant changes in their practices to strengthen compliance programs, increase compliance staffs, and enhance internal compliance and procedures,” said acting U.S. Attorney Ralph Marra in a statement.


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