“It’s been really an exciting time now, I’d say, especially in the last three years and even as recently as 2022,” a former director at Digital Surgery said. “One pertinent area of focus being Medtronic with the launch and regulatory approval of their Hugo platform.”
Incumbents such as Intuitive Surgical, Johnson & Johnson and Medtronic are increasingly using AI and video tools to support post-surgery debriefing. These capabilities enable surgery annotations and facilitate the understanding of tool utilisation and time spent operating in various phases of a procedure.
A number of upstart companies have disrupted the space, including Karl Storz’s OR1 video solution, quickly becoming a dominant name in operating rooms around the world. “It’s offered a lot of interesting insights, and this is why a lot of these big players have started to acquire these smaller start-ups that offer big innovation, and so what you’re also seeing is the bundling of these solutions with these types of platforms whether they be robotic or traditional laparoscopic instrumentation leaders,” our specialist said.
There has also been a heightened interest in training because, as we heard, “the benefit to the patient is only as good as the operator using those technologies”. Simulators are a budding market and range from experiences that can be deployed on a tablet or phone to VR solutions, such as Osso. The expert emphasised that organisations need a well thought-out training strategy, both for experienced surgeons looking to acquaint themselves with a new technology and those who want to understand more about a given procedure and the associated technology.
Companies such as CAE, 3-DMe and Surgical Science are building a strong presence in the simulator space, while others are rolling out training platforms that replicate robotic stations. Intuitive’s dVSS “backpack”, for example, enables surgeons to practise using instruments on a level that is relevant to their experience. “The problem is you need to have that console available to you,” the expert said. “Unless you have donors with deep pockets who can provide a second console that can be used for training, it’s sometimes hard to gain access to the real console.”
As these technologies continue to gain ground, our expert sees long-term growth in the software simulation market, with new entrants including Simulated Surgical Systems and Mimic. “You’re going to see more players come into the robotic space, and really any of these other areas where hands-on training is key to benefiting from these technologies.”
The joint replacement industry suffered a blow during the COVID-19 pandemic, we were told, as patients that typically fall into the age bracket for these procedures were reluctant to go into hospitals. “With that in mind, the volume of joint replacement during the pandemic plummeted through the floor,” our expert said. This has catalysed several players to rethink their pricing strategy, ultimately resulting in wider adoption. “From all evidence that I have seen, no one is charging the exorbitant amount of fees that you used to see to have a singular piece of equipment placed,” the Smith & Nephew executive said.
Instead, volume-based agreements are becoming the norm. “No one is writing Mako, or Stryker or Zimmer a cheque anymore to buy that technology outright or as a singular purchase.” This shift has turbocharged “fervour” in robotics and robotic setups, the expert added. “It’s a very good strategy in the sense that it’s doing two things. It’s increasing volume from a single hospital institution to a single joint-replacement provider, but it’s also creating a dynamic we like to call sticky.”
“No one is writing Mako, or Stryker or Zimmer a cheque anymore to buy that technology outright or as a singular purchase.” Executive at Smith & Nephew
With reimbursements declining, joint replacement remains a significant revenue centre for hospitals. However, the cost of goods sold – the components for such procedures – has remained constant over the past decade, with hospitals now starting to challenge manufacturers’ charges and thus pivoting towards smaller organisations. “When you think about them going to a single-source or dual-source agreement, there’s a higher likelihood now that those tier 2 companies are going to get on one of those dual-source agreements than there was even 10 years ago, and that is much more related to that reduction in reimbursement that we’re seeing vs clinical benefits,” the expert explained. Tier 2 companies were cited as Corin, Medacta, Exactech and Conformis.
Returning to the broader industry, we were told it is important to remember that robotics are not new to the medical realm, with the Da Vinci robot, used for microsurgery, an example of a technology that has been available for 10-15 years. “I don’t think these technologies are going away, it’ll just be interesting to see what happens in the future as far as how they’re leveraged and how they’re commercialised, as we’ve already seen a major change in the last two years, particularly around the commercial approach,” the specialist said. However, as we have heard, recent developments have “lit a fire” under legacy players such as Intuitive Surgical and Stryker. “They have had increased competition over the last few years… with other companies like Smith & Nephew and their Navio platform, you’ve had others like Rosa and Nuvasive on the spine side and Globus.”
Ultimately, as competition intensifies, technology develops and training becomes more commonplace, overall costs and time spent in the operating room are expected to fall. “I am a true believer that these robotic technologies, these navigational technologies, do allow surgeons the opportunity to do a more precise surgery,” the former director at Digital Surgery said. “The direct outcome of that is a better outcome for the patient, a better experience for the patient, which is why we’re all here.”
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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