ExtremitiesFinancialSports Medicine

Success in Orthopedic Implants- Understand Your Business Model

By Thomas Ferro

Historically, orthopedic implant companies used a Push-Thru business model that essentially had the manufacturer develop product and  then throw the product over the fence into the distributor’s waiting arms.  The distributor would then leverage its surgeon relationships to drive sales.  All was simple and good in orthopedics. Organization resources such as sales, marketing, product development, etc, all worked towards developing the package to be thrown over the fence.  Market dynamics such as healthcare compliance, transition of hospital purchasing decisions from surgeons to administration, need for clinical and economic efficacy validation to realize premium pricing and even acceptance of a product to be used in a hospital, and declining reimbursement levels have all contributed to rocking the orthopedic boat.

Success in today’s market requires a Demand-Pull business model.  Executive leaders in orthopedic implant companies need to understand this model transition, its implications in how they manage, and how to lead and align organizational resources both human and financial, to drive success.  This applies to start-ups as well as established companies.


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