Orthopedic companies are giving up on the US Market. Throwing in the towel.
Orthopedic device companies have found themselves in the center of a storm of converging trends of economic, regulatory, and reimbursement uncertainty with the US market.
In order to deliver earnings and dividends to their shareholders, the big Orthos have no choice to ignore the largest market in the world - America. The resulting dynamics are that the big Orthos are moving their resources, inventories, training, clinical studies and R&D efforts into outside US markets, such as the BRIC countries.
Let's look at the trends that are pushing the Orthopedic companies to outside US markets.
The FDA has become unpredictable, unreliable, and anti-technology. This is well documented.
The investment into new technologies for the US has simply become too punitive. For Class III devices, companies today must invest 8-10 years and $95M before seeing significant revenue. In Europe, new technology investment can be 1/3 as much, and revenue can be appreciated in a few short years. Where would you go first?
Price points are dropping in the US. Well documented.
Reimbursement is becoming more challenging in the ...
