fixation/trauma, orthobiologics

Artelon® CMC SpacerA Conservative, Tissue Preserving

Option for the Treatment of

Early Stage CMC Joint Arthritis

A Single Source of Products, Technology

& Education

The Advent of OrthobiologicsSBi extends the Artelon® family of bioabsorbable spacers

to treat OA in the fingers, hand & wrist domain.

ProductNews

May/June 2008

OrthopaedicUSA May/June 27/5/08 4:21 pm

USA May/June 27/5/08 3:27 pm

Enquiry No 2


Enquiry No 3


May/June 2008 • Orthopaedic Product News 5

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FROM THE EDITORDear Doctor

SURGEON AS ENTREPRENEURPatent Prosecution: Understanding the Process

STRATEGIC MARKETINGThe Functions of Effective Marketing

PRODUCT NEWS

PRACTICE MANAGEMENT SOLUTIONSStages in the Career of an Orthopaedic Surgeon

FUTURETECHEmerging Orthopaedic Technologies & Treatments

ORTHOINVESTOR UPDATEIncluding Ticker Track & Company Financials

ARTICLEDoes U.S. Recession Mean Ortho Regression?

EXECUTIVE INTERVIEWAnthony Viscogliosi, Chairman & CEO, Small BoneInnovations, Inc

PRODUCT FEATURESOrthobiologics

FUTURETECHA New Orthopaedic Imaging System: EOS, Ultra LowDose 2D/3D

THE TOP LINEWill Industry Ever Look the Same Again?

PRODUCT FEATURESFixation & Trauma

ARTICLEBiologic Joint Replacement or Why Airplanes Fly

DOJ UPDATETestimony of Gregory E. Demske, Assistant InspectorGeneral for Legal Affairs

FISCAL FITNESSBone Graft Materials in Orthopaedics: 50+ CompaniesVie for a Piece of the $1.9BB Pie

CALENDAR OF EVENTSA Comprehensive Guide To Meetings And Events

CLINICAL REVIEWFive Year Follow-Up on Intradiscal Ozone Injection forDisc Herniation

May/June 2008

In The Next IssueJuly/August 2008

Foot & Hand Surgery and Sports Injuries

The Artelon® family of bioabsorbablespacers, marketed by Small BoneInnovations, Inc., was developed forpatients with osteoarthritis (OA) in thebase of the thumb. The Artelon® CMCSpacer is a T-shaped, woven construc-tion made of fibrous material consistingof a degradable polyurethane-ureabiomaterial shown to act as a supportingscaffold to stabilize the joint and aidtissue re-growth.

The Artelon CMC implant wasintroduced in the U.S. in 2005 to treatearly- to mid-stage OA in the thumb.This is one the most common forms ofOA in the upper extremity. Since then, more than 900 surgeons havebeen trained worldwide in the use of Artelon.

The Artelon implant is designed to achieve both resurfacing andstabilization of the osteoarthritic trapezio-metacarpal joint (also knownas the carpo-metacarpal joint). The purpose of the vertical portion is toseparate the surfaces of the arthritic joint and to act as a spacer betweenthe trapezium and the first metacarpal. The horizontal portion acts tostabilize the joint. Another spacer, the Artelon® STT, is available to treatthe adjacent scapho-trapezio-trapezoidal joint.

By using the Artelon CMC Spacer the trapezial bone will bepreserved, thus keeping the original anatomy of the hand virtuallyintact. This avoids shortening of the thumb and provides significantlybetter pinch strength compared to other therapies. Surgery is normallyperformed under regional anesthesia.

SBi has an exclusive worldwide licensing agreement (excepting theNordic countries) with Artimplant AB of Sweden, the developer ofArtelon technology. It covers the four versions of spacer technologynow available to surgeons in the U.S., as well as all future resurfacingand interposition applications in the fingers, hand and wrist domain.

Small Bone Innovations, Inc.1380 South Pennsylvania Avenue

Morrisville, PA 19067Main: 215-428-1791

Customer Service: 800-778-8837www.totalsmallbone.com

Enquiry No 1

Small Bone Innovations, Inc.

Published in the U.S. by: Knowledge Enterprises, Inc.Address: 8401 Chagrin Road, Suite 18,

Chagrin Falls, Ohio 44023 USATel: 440-543-2101 Fax: 440-543-2122

Web Site: www.orthoworld.com

Editor in Chief: John Engelhardt - [email protected] Editor: Julie Vetalice - [email protected] Editorial Consultant: Ann Monk - [email protected] Coordinator: Amy Beth Stagl - [email protected]: Teresa Patrick - [email protected]

Every effort is made to ensure that information given in this magazine is accurate but no legal responsibility is accepted by the Editor or Publisher for errors or omissions in that information. Readers are advised to contact manufacturers directly. Views expressed by contributors are not necessarily shared by OPN.

Copyright © 2008 Pelican Magazines Ltd and Knowledge Enterprises, Inc.

Upcoming IssuesSeptember/October 2008

Spinal Surgery & Cement SystemsSubmissions or enquiries to any future issues of OPN can be emailed to:

[email protected].


6 Orthopaedic Product News • May/June 2008

Dear Doctor,In 2007, you and your colleagues performed 16 millionorthopaedic procedures. In the overwhelming number ofcases, the result for the patient was dramatic.

I used to look forward to discussions with surgeonfriends. We’d spend quality time enumerating clinicalchallenges and speculating on the technology solutions.I always left these talks in a state of elation. While therewere still concerns and challenges, the system had theresources and fine minds to address them. Now it seemsthat the main subject on everyone’s mind is theDepartment of Justice.

Some write it off as political parrying before the national election. Others pontificate that it is a longoverdue overhaul of an archaic and corrupt system. Most everyone in the know agrees that it is farfrom over, and most are in agreement that regardless of what restrictions are placed on the system, wecannot forego the surgeons input into product design and technology development. For those of usinvolved in the art, science and industry if orthopaedic care, this states the obvious. I would, however,feel more comfortable if those proposing legislation felt a little more strongly about it. Apropos to this,we feature inside this issue a summary of DOJ activity in orthopaedics and spine along with themotivations of the lawmakers pursuing change. This comes in the form of testimony by Greg Demskeof the Office of Inspector General. Some would feel better if he were an orthopaedic surgeon, or atleast knew one to talk to.

This whole debacle threatens to drive a wedge between industry, surgeons and the patient. The furtherthe wedge goes, the deeper the rift between patient needs and the system’s ability to address them. Noone wins.

On the pages herein, critics of the system see expensive and wasteful results of medical payola. Theinformed realist cannot help but feel excited and fulfilled by the plethora of technologies developed indirect response to the sometimes urgent needs of the millions of patients that you treat each year. Wesincerely hope that the latter perspective is what will guide those who decide the fate of you and yourpatients in the form of healthcare reform legislation.

John A. EngelhardtEditor in Chief

FFRROOMM TTHHEE EEDDIITTOORR


Enquiry No 4



Before addressing the topic of this article, I am pleased to provide anupdate to my previous article entitled “The Rules of the Road AreChanging For Patents” (November/December 2007). As I reported in anearlier addendum to that topic (January/February 2008), the U.S. DistrictCourt, Eastern Division of Virginia on October 31, 2007 issued aPreliminary Injunction enjoining the U.S. Patent and Trademark Office(USPTO) from implementing the changes in the Claims andContinuations Final Rule. Some of my concerns to the proposed changesto the rules of practice in the Claims and Continuations Final Rules werebriefly discussed in my previous article to which your attention is invit-ed. The rule changes were originally scheduled to go into effect onNovember 1, 2007. As mentioned above, that implementation date wastemporarily enjoined the day before the scheduled implementation of theFinal Rules. Following extensive arguments, the District court found thatthe USPTO was not empowered by law to make substantive rule changesand further determined that the Final Rules proposed by the Patent Officeare neither procedural rules nor rules relating to application processingthat have substantive collateral consequences, but rather are substantiverules that change existing law and alter the rights of patent applicantsunder the Patent Act. The District court determined that the Final Rulesconstituted a drastic departure from the terms of the Patent Act and indoing so, effect changes in the existing rights and obligations of patentapplicants. As discussed in my previous article, the proposed Final Ruleswould have effectively shifted much of the prior art search and analysisburden to the applicant and thus increased the patent applicant’s expens-es for legal fees. This court decision is very good news for the patentapplicant. While it is very likely that the USPTO will appeal the decision,it is not considered likely that the court’s decision will be reversed. Wewill continue to follow this matter and report its progress.

Now turning to the topic at hand, patent prosecution, let us first con-sider who is involved and what role they play. Patent prosecution is theprocess of exchange between the patent applicant with his patent attor-ney and the U.S. patent examiner. The process would ideally beginimmediately after the patent application is filed with the USPTO. Ratherthan “immediately,” the time line between the patent application filingdate and the date that the patent examiner first begins his reading andexamination of the application would better be described as “directly.”Patent applicants should understand from the beginning that patent pros-ecution is not a quick process.

Within a few weeks, the newly filed patent application will beassigned to the Office of Initial Patent Examination. This office is tasked

with examining the newly filed patent application only for the purposesof determining if the application is formally complete; that is, it meets allof the requirements specified for a complete and correctly filed applica-tion. Any necessary supplemental papers that must be filed, such as aninventor’s declaration, will be requested by the Office of Initial PatentExamination, and the patent applicant and his attorney will respondaccordingly. This initial exchange between the patent applicant and thePatent Office is generally handled very quickly and efficiently.

At this point, efficiency takes a back seat to the frustration of a growing queue of backlogged patent applications awaiting examinationin the Patent Office. Upon completion of the initial examination for compliance with formalities, the patent application will be assigned toone of eight distinct Technology Centers. They are: Technology Center1600, Biotechnology & Organic Chemistry; Technology Center 1700,Chemical and Materials Engineering; Technology Center 2100,Computer Architecture, Software & Information Security; TechnologyCenter 2600, Communications; Technology Center 2800,Semiconductors, Electrical and Optical Systems and Components;Technology Center 2900, Designs; Technology Center 3600Transportation, Construction, Electronic Commerce, Agriculture,National Security, and License & Review; and Technology Center 3700,Mechanical Engineering, Manufacturing and Products & Design.

It is in Technology Center 3700 where inventions in the surgical artswill be examined. Occasionally an invention will spill over into morethan one area of technology, for instance, in a device such as a trocar orcannula (Tech Center 3700) that also includes a laser or optical device(Tech Center 2800) or mechanical surgical implants (Tech Center 3700)that might include chemical coatings (Tech Center 2100) or inclusions ofgenetically engineered tissues (Tech Center 1600). Such hybrid inven-tions in the surgical arts are assigned to the surgical art unit within themechanical technology center.

Common to each of the Technology Centers is a prolonged delay inbringing a patent application to the initial examination on the merits bya patent examiner. It is not uncommon now for a patent application towait as long as two years before it is first examined and an initial OfficeAction on the merits sent to the patent applicant. The disappointment ofsuch a prolonged waiting period can be frustrating for the patent appli-cant who, from the time of his conception of the invention, has workedexpeditiously to obtain patent protection and develop the invention com-mercially. This time of patent pendency need not be unproductive.

SSUURRGGEEOONN AASS EENNTTRREEPPRREENNEEUURR

continued on page 10

Author: Perry E. Van Over, Esquire

Patent Prosecution: Understanding the Process


Enquiry No 5



continued from page 8

Frequently, during this early waiting period, much of the work is done todevelop manufacturing, development and marketing alliances throughcontracts, licenses, or assignment of the patent pending invention.

The patent prosecution phase begins with the patent examiner’s initialexamination of the patent application on the merits. The examiner willinitially search the prior art in an attempt to identify any publicly known(published) art that discloses the elements of the patent applicant’s inven-tion, as defined by the claims. While the examiner may discover a singu-lar prior art document that discloses the claimed invention in its entirety,it is more often the case that the examiner will find two or more prior artdisclosures that when combined will render the applicant’s inventionobvious to one of ordinary skill in the art. Through this process the exam-iner will in this initial examination endeavor to reject the claimed inven-tion as not novel, or as obvious over the prior art of record. The examin-er will communicate by letter his Official Action to the patent applicantthrough the patent attorney and will set a date three months from the dateof mailing by which a response to the rejection must be filed with thePatent Office. This due date is extendable to a maximum period of sixmonths.

Upon receipt of the examiner’s Official Action, the patent attorneywill consult with the patent applicant to determine if the examiner isaccurate in his assessment of the claimed invention in light of the priorart found. Every detail of the claim can be important in making apatentable distinction between the prior art and the claimed invention.Careful consideration is the governing rule of this exercise in preparinga response. At times, the response to the examiner can be entirely in theform of argument which overcomes the initial conclusions of theexaminer in his rejection of the claims. At other times, the claims mayrequire an amendment to add or modify an element of the claims so as todistinguish the applicant’s invention from that disclosed in the prior art.Upon submission of the response to the Patent Office, the applicant and his attorney again will patiently await the progress of thiscommunication through the ever-lengthening queue of the examiner’sdocket.

Ideally, the examiner will once again consider the patent applicationwith the recently received applicant’s response/amendment within threeto four months from the time of response submission. This delay can beshorter or longer, but more and more often it is becoming longer. Thebacklog of communications awaiting the examiner’s consideration con-tinues to grow each year. However, this prolonged time of waiting can beput to good use. Often, in license or assignment negotiations, prospectivelicensees/assignees will want to discuss the status of the pending appli-cation. If the examiner’s initial rejections of the claims were weak or eas-ily overcome by the applicant’s response, the prospectivelicensee/assignee will be encouraged to strike a deal with the patentapplicant while the patent is still pending and available. In this way, thefrustrating prolonged periods of patent pendency can be put to produc-tive use.

Upon receiving the applicant’s response, the patent examiner maydetermine that the earlier rejections of the claims have indeed been fullyovercome and he will then issue a statement of allowability and anallowance of the claims of the patent. Such a communication from theexaminer is welcome, as it brings the journey to obtaining patent protec-tion to an early and successful conclusion. More often, however, thepatent examiner will return to his efforts to locate additional prior art ref-erences upon which he can base new rejections of the claims and again

begin the cycle of rejection and response between the examiner and thepatent applicant. Often such a second rejection will be determined to bea Final Rejection of the claims.

Responsive to a Final Rejection, the applicant and his attorney canprovide a response, which can include an “after final amendment” to theclaims. The after final amendment should be crafted to bring the claimsinto condition for allowance. In drafting this response and possibleamendment, great care should be given to preserving the full breadth ofthe claims to which the applicant believes he is entitled in view of theprior art. It can be tempting to give the examiner too much of what hewants in order to elicit an allowance from his next Official Action. Apatent examiner acts on the belief that it is his duty to avoid giving anapplicant an exclusive right over an invention that already should be con-sidered the property of others or in the public domain. Acting on thatsense of duty, the examiner will often seek to unduly narrow the breadthof the applicant’s claims to the invention. A good examiner will workwith the patent applicant and his attorney to avoid overreaching andunnecessarily limiting the patent applicant’s rightful claims to his inven-tion. Often, this fairness in obtaining an allowance of claims to which theapplicant should be entitled is only obtained after considerable argument.After Final interviews with the patent examiner can also be required soas to allow for a greater dialog between the examiner and the applicantthan is available simply through exchanged correspondence. In everycase, it is important that the applicant use every avenue to assist theexaminer in coming to an understanding of the patentability of theclaimed invention over the cited prior art. Unfortunately, even during theAfter Final phase of the patent prosecution, this goal is not alwaysachieved.

Should the examiner disagree with the patent applicant’s After Finalarguments and amendments and persist in his rejection of the claims, hewill mail an Advisory Action to the applicant that briefly states his posi-tion of maintaining the rejection of the claims. While it is not required,some patent examiners, who sincerely appreciate their role in bringingnew technology to the public and for the public good, will at this pointstill entertain an additional communication from the applicant that seeksto place the patent in condition for allowance. Such additional consider-ation is not the rule and cannot normally be expected in the course ofpatent prosecution. At this point, the patent applicant can exercise differ-ent options.

If in fact the patent applicant and his attorney believe that the exam-iner was right in his assessment of the claims of the application andindeed they are not allowable over the prior art of record, the patentapplication can be allowed to go abandoned. Alternatively, if the patentexaminer is believed to be correct in his rejections, the patent applicationcan be re-filed as a Continuation-in-Part (CIP) application that wouldthen contain additional disclosure materials, additional elements,improvements or data that was lacking in the initial/parent application.Such additions to the CIP application may be necessary to overcome theprior art upon which the claims of the parent application were rejected.A CIP application is an entirely new application that has its basis in thedisclosure of the original and claims priority for that information to theoriginal filing date.

If the patent applicant persists in his belief that the examiner wasincorrect in his rejections of the claims of the original application, he canappeal the examiner’s decision to the Board of Patent Appeals andInterferences. It is not uncommon for the board to reverse a decision of






Enquiry No 23


an examiner and determine that some or all of the rejected claims areallowable. This avenue can lead to a good or a bad conclusion for thepatent applicant. If the decision of the board is negative, the patent appli-cant can then choose to appeal the decision to the Court of Appeals forthe Federal Circuit. This Federal appeals court specializes in hearingappeals in patent cases. The Federal Circuit has often reversed decisionsby the Patent Office Board of Patent Appeals and Interferences. Often,errors by the patent examiner or the board are discovered and the case isreturned to the Patent Office to reconsider in light of the Federal Circuitdecision. However, this pathway also leads in two opposing directionsand the patent applicant may expend a large amount of time andresources without obtaining an allowed patent.

The pathway to patent protection can be long and arduous, and cer-tainly can become expensive to follow in some cases. The prolongeddelays now experienced by patent applicants in their quest to obtainpatent protection continue to increase each year, adding to the frustrationof a patent prosecution process that can easily require two, three or moreyears to complete. The inventor/entrepreneur embarking on that journeymust know at the outset that obtaining patent protection is not quick,

simple or inexpensive—and with that also understand that no one canguarantee the final outcome of the patent prosecution process.

The intention of this article is only to provide the reader with a gen-eral understanding of the dialogue between the patent applicant and thepatent examiner that constitutes the framework of patent applicationprosecution. While a telephonic or personal interview between the patentapplicant and his attorney with the patent examiner may occur, theprocess is basically an exchange of carefully crafted correspondenceover a one to three year period, which may or may not result in an issuedpatent protecting the exclusive rights of the patentee to his claimedinvention. As such, this article is not intended as legal advice but is pro-vided only to assist the inventor/entrepreneur in his understanding of thepatent prosecution process.

Perry Van Over is the Founding Member of Perry E. Van Over &Associates, PLLC, an intellectual property law firm specializing inpatent procurement, licensing and litigation in the technical fields of sur-gical instruments, medical devices, molecular biology, pharmaceuticals,biochemistry and polymer chemistry. He can be reached at 703-543-6456 or [email protected].

Enquiry No 6



Having worked with orthopaedic practices for nearly twenty years, it hasbecome readily apparent that practices staff and outsource theirmarketing efforts in various ways. Regardless of size or sophistication,nearly every practice engages in numerous marketing functions. Thefollowing outlines each of the primary functions and its role in servingyour practice.

Business StrategyBusiness strategy is one of the most fundamental elements of good

marketing. Without a clear vision of where the practice is going, fewpractices are truly in a position to maximize the monetary and competi-tive advantages of effective marketing.

In recent years we have witnessed significantly more business sophis-tication on behalf of practices. Primarily at larger practices, administra-tors/CEOs are far savvier and physicians are realizing the importance ofmanaging, running and leading an organization with business fundamen-tals. We are seeing more planning and forecasting than ever before andthis leads inevitably to more efficient and results-oriented marketing.

Marketing StrategyMarketing strategy is primarily charged with aligning the practice’s

vision and tactical business objectives while balancing the needs of themarket and available resources such as time, talent, money and commit-ment. Additionally, an effective marketing strategy requires a method-ology that targets a return on investment or return on objective scenarios.

Marketing CoordinationMarketing coordination is primarily an internal function that acts as a

liaison between an agency or marketing firm and the practice. Thisposition is usually added when a practice reaches a level of activity thatexceeds the administrator’s capacity.

The level of necessary marketing efforts and therefore an effectivebudget for marketing efforts has little to do with the size of your practice.Activity and budget should be influenced more by the competitiveness ofthe market and how aggressive your objectives are. If you are in a marketwith few competitors and minimal objectives, your activity and budgetshould be far more modest than others. If, however, you do have a signif-icant amount of activity, having some level of marketing coordinationmay be required.

Project ManagementProject management coordinates efforts between all functions such as

creative direction, interactive design, copy writing and production alongwith coordinating vendors and suppliers with the internal marketingcoordination. In short, project management is the glue that holds allprojects together and delivers a final project.

Outreach LiaisonExternal relationships make up important and valuable referral

sources to orthopaedic practices. An outreach function can be beneficialwith specific efforts especially for large practices (30+ physicians) inlarge markets. In the last few years we have seen practices both hire andcontract this function for primary care and Workers’ Compensationsegments with variable success. The use of the “right” athletic trainerscan be very effective, but like nearly all liaison efforts, the emphasis ison the “right” personnel.

Copy WritingMarketing is about communicating the right messages. When it

comes to orthopaedic practices, numerous messages need to becommunicated to several different audiences. Regardless of the organi-zation, whether healthcare or any other, copy writing is one of the mostchallenging of functions. First, and most importantly, copy writing isresponsible for communicating a message effectively to those for whomit is intended. Secondly, it has to align with the personality and style ofthe practice.

Creative DirectionWhen it comes to effectively communicating a message, creative

direction leans heavily on research and guiding principles to drive bothverbal and visual messaging. High level creative direction requires asolid understanding of internal and external branding, market mediumsand the special needs of the market and its segments.

Most physician groups err in believing that what they have to say isthe message. Great copywriting and creative direction will leverageresearch and communication fundamentals, and develop messaging thatthe market wants to hear.

The Functions of Effective Marketing

Author: Bill Champion


SSTTRRAATTEEGGIICC MMAARRKKEETTIINNGG



Enquiry No 24

SSTTRRAATTEEGGIICC MMAARRKKEETTIINNGG


Art Direction and Graphic DesignArt direction and design are specialized functions that utilize visual

communications to reinforce key messaging. Good design reinforces themessage through various means such as photography, illustration,typography, color schematics and many other potential visual effects.Just as a copy writer utilizes his/her skill set to effectively communicatethe strategic message, art directors and designers leverage their skill setsto do the same—just visually.

In all our research, the one thing that stands out is how similarcompeting orthopaedic practices are viewed by their market. Rarely isthere a practice that has truly differentiated itself in the eyes of primarycare or prospective patients. This is why good design is so important.

When you consider all the options to truly differentiate your practiceto your market and the corresponding efforts, good design is probably theleast expensive way to do it. Candidly, I am amazed at how well-dressedorthopaedists are in clinic, whether in white coat or not. Yet, they willhave a web site that looks as if it was developed by a local high schoolkid or have materials that have been photocopied so many times that theyare illegible. For some reason, how they present themselves personallyoften doesn’t line up with how they present their practice.

Interactive DesignSince the onset of the internet in the mid ’90s, interactive design has

become mainstream in the marketing communication arena. Workingclosely with creative direction, copy writing and art direction, interactivedesign integrates verbal and visual communication along with motionand more importantly, interactivity.

The skill sets in this area are demanding, including knowledge andproficiency of numerous programming languages along with insight intothe current Internet browsers that display content. Interactive Designgoes beyond web sites to such activities as Web 2.0, blogs, wikis,podcasts, e-communications, search engine optimization, etc.

What challenges most practices is the vast array of interactiveopportunities that are available. It isn’t whether or not interactivecommunications should be part of your plan, but correctly choosingwhich ones will really make a difference based on your market and yourobjectives.

ProductionThis function prepares materials from final art or design and manages

the actual creation of a final advertisement, brochure or other produceditem. The experience set is unique and requires both a broad and specificknowledge of printing and media mechanicals. For example, a simpleprint ad that is placed in a local newspaper and several magazinesrequires detailed sizing and an understanding of the different specifica-tions required by each to insure the ad is both placed and printedcorrectly. When printing a brochure or other collateral pieces, productionmanages the overall quality of printing by planning how the paper willreact to the designated design including cuts, folds, binding and gluing.This function is underrated and misunderstood by most practices becausemost practices never see this function in action.

Media PlanningPlanning media purchases is a series of detailed and complex

decisions that determine the most effective tactics to leverage messaging

to a designated target audience under a specified budget. Like many ofthe other planning functions, this requires expertise, good research andexperience. Media planners look at geographic coverage, demographicsand engagement strengths for each medium and analyze these qualitieswith such cost efficiency measurements as cost-per-thousand and cost-per-point.

Media planning is an unknown function to many practices. Only afew practices engage in mass media like television or radio advertisingand, if they do, will tend to buy packages that are sold by the actualmedia source. In most cases, media packages are designed for thesmallest of businesses because of cost and simplicity, not for effective-ness. Like many efforts practices make, it is rarely the easy ones thatproduce the most value.

Public RelationsThis function is too broad to cover in this article, but in short, public

relations manages and orchestrates the perceptions and attitudes of themarket for the benefit of the practice. This function can focus on anumber of important constituents including the medical community,general community, media, patients and others. Public relations can takethe form of events, newsletters, press releases, press conferences and,equally important, assist strategically in times of crisis.

So, what is the most important?The most important of the above functions is your business strategy.

This trumps all others because it sets the direction, the pace, and theavailable resources. It is inherently a management and physician respon-sibility and should never be outsourced. This doesn’t mean that consult-ants with deep and specific expertise shouldn’t provide advice, but onlyyou know your practice’s ambitions and commitment levels.

When it comes to marketing strategy, again, outside experts arevalued but only if they provide good research, proven expertise and aligntheir efforts with the previously identified business strategy. Physiciansmake good decisions when they have good information.

Creative functions (creative direction, design, copy writing, interac-tive, media planning) are best contracted out to experts. Regardless of thesize of your practice, you should always leverage the expertise of thosetrained, wired and experienced at communications. I understand thatmost practices deem good design and copy writing expensive, yet thecumulative opportunity cost of not doing it right is significantly more.

In closing, the best marketing is what you do in clinic and in surgery.Everything else is leverage. But when it comes to leveraging your effortcorrectly, make sure you have a clear vision and then get the rightresources focused on achieving it.

Bill Champion is the President of Orthopaedic Marketing Group. Since1989, Bill has been writing, consulting and speaking on the topics ofstrategic marketing, business development, practice branding andcompetitive dynamics. Mr. Champion’s work has been seen in numerousindustry publications and through conducting instructional courses atmajor industry conferences. He can be reached at 402-408-2360 [email protected].



PPRROODDUUCCTT NNEEWWSS

OrthoWrap Bioresorbable Protective Sheet

The OrthoWrap Bioresorbable Protective Sheet is indicated for the man-agement and protection of tendon injuries in which there has been nosubstantial loss of tendon tissue. The bioresorbable protective sheet min-imizes tissue attachments to the device when in contact with other softtissues.

OrthoWrap is made from a synthetic polymer of lactic acid 70:30 Poly(L-lactide-co-D, L-lactide), which also forms naturally in the humanbody. It is well tolerated and elicits no inflammatory response. The filmis easy to handle and allows for surgeons to trim it to meet specificanatomical needs. Virtually weightless, the protective sheet is clear andallows for complete visualization of all anatomy for ease of placement.

The OrthoWrap Bioresorbable Sheet is also indicated for reinforce-ment of soft tissues repaired by suture or suture anchors, during tendonrepair surgery, includ-ing reinforcement of theflexor or extensor ten-dons of the fingers,thumb and wrist, rotatorcuff, patellar, Achilles,biceps, quadriceps, orother tendons.OrthoWrap reinforcessoft tissue and providesa remodelable scaffoldthat is replaced by thepatients own soft tissue.

MAST Biosurgery, Inc.Tel: 866-627-8246www.mastbio.com Enquiry No 28

KINETIC®-SL Internally DynamizingAnterior Cervical Plate System

Life Spine received FDA 510(k) clearance forthe Kinetic®-SL, a new internallydynamizing anterior cervical plate. Thiscervical plate system features an inte-grated lock similar to that of Neo®-SL,which allows bone screws to be secure-ly fixated without any additional lockingcomponents. The self-retaining screwcapture mechanism is designed to preventscrew rotation and backout while still allow-ing screw angulation. Like the original Kinetic,Kinetic-SL features 0-2mm of fully adjustable internal dynamization perlevel. Kinetic-SL also features:

• Ultra slim profile• Narrow plate width (16mm) • Newly designed fast turning (FT) bone screws• Large graft window, similar to the original Kinetic plate, providing

increased intra-operative and post-operative views of the graft site• Self-drilling, self-tapping, fixed and variable angle screws • Pre-lordosed plates in levels 1-5

Life SpineTel: 847-884-6117www.lifespine.comEnquiry No 25

OtisKnee™ Custom Fit Knee™Replacement System

Developed by OtisMed Corp.,OtisKnee™ total knee replacementtechnology allows surgeons to cus-tomize the size and placement of theknee implant to each individualpatient’s anatomy. Unlike “one sizefits all” instrumentation, the patient-specific OtisKnee technology was designed to address the fact that every-one’s knees are different. These differences, which can have a tremendousimpact on the success of a total knee replacement, may be why nearly 14percent of total knee replacement patients have reported being either dis-satisfied or very dissatisfied with their results after surgery.1

The custom-fit OtisKnee approach involves a pre-operative MRI, aproprietary ShapeMatch™ planning process and the production ofpatient-specific cutting guides. These guides enable surgeons to preservemore bone and ligaments, allowing for better implant fit and alignment.

OtisKnee surgeons and patients have reported quicker recovery times,less pain and greater return to function than with traditional and comput-er-assisted total knee replacement techniques. OtisKnee surgeons havealso reported reduced surgical times, simplified surgical set-up as well asquicker patient discharge.

1 Noble, P., et al., “Patient Expectations Affect Satisfaction with Total Knee Arthroplasty,”Clinical Orthopaedics and Related Research, 2006.

OtisMed Corp.Tel: 888-OTISMED (684-7633)www.otismed.comEnquiry No 26

LYNX™ Cross Connector System

Life Spine recently introduced its Lynx CrossConnector as an addition to its lumbar fixationoffering. The innovative design of this sys-tem allows for snap-on rod attachmentand self-alignment capabilities. With itsmultiaxial adjustability in all planes anduser friendly design, Lynx allows surgeonsmore options when presented with a need fora stabilizing cross connector system.

Lynx features a variety of lengths via its fenestrated design, withstraight and arched versions available in an assortment of adjustablelength configurations ranging from 25mm to 100mm. Lockup of the con-struct at both rods and at the cross connector’s medial joint is accom-plished with a single driver tool, which is designed to lock the implant ata predetermined force. The cross connector is designed from surgicalgrade titanium. Lynx has been designed to be extremely easy and intu-itive to use, virtually eliminating the need for bending and requiring onlyminimal instrumentation.

Life SpineTel: 847-884-6117www.lifespine.com Enquiry No 27



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SpF® PLUS-Mini Spinal Fusion Stimulator

Biomet Spine has introduced the SpF® PLUS-Mini Spinal Fusion Stimulator toaddress the demand for a proven option to enhance posterolateral fusion successrates. This is the next generation of implantable SpF devices that have proven to bea safe, cost-effective adjunct for spinal fusions since 1987, backed by over 30 pub-lished scientific and clinical papers showing long-term success.

The direct current technology at the heart of the SpF PLUS-Mini stimulatorinvolves the upregulation of BMPs (Bone Morphogenetic Proteins) and othergrowth factors, including BMP 2, 6 and 7 and the BMP receptor ALK2, which arenormal physiological regulators of various stages of bone healing, including chon-drogenesis and osteogenesis.1 The SpF PLUS-Mini stimulator has shown a 50%increase in success rates over autograft alone.2 In addition, the SpF PLUS-Ministimulator features a 67% smaller generator than the original SpF®-PLUS device with a slimmer, lower-profile design for enhanced patient comfortwhile still providing 60 microamps of direct current stimulation. Because the SpF PLUS-Mini stimulator is implanted, it can offer continuous treat-ment without patient compliance issues, which is especially important during the crucial first six months of treatment.

1Fredericks, D.C., et al. Effects of Direct Current Stimulation on Gene Expression of Osteopromotive Factors in a Posterolateral Spinal Fusion Model. SPINE: January 2007. Volume 32, Number2, pp 174-181.

2PMAP850035. Kane, William J. MD, PhD. Direct Current Electrical Bone Growth Stimulation for Spinal Fusion. SPINE: March 1988. Vol. 13, pp. 363-365.

Biomet SpineTel: 800-526-2579www.biometspine.comEnquiry No 29

VertiGraft VG1® Cervical AllograftBio-implant

The new VertiGraft VG1® Cervical allograft bio-implant is engineeredfor use in anterior cervical fusion (ACF) surgery to address cervicalpathologies. The VG1 Cervical bio-implant’s one-piece cortical con-struction and textured surface area provide the critical strength and sta-bility required by an implant in this application. The VG1 Cervical bio-implant’s chamfered profile, as well as specifically-designed insertioninstrumentation, are intended to ensure easy graft implantation.

The VG1 Cervical bio-implant is freeze-dried, allowing the conven-ience of maintaining this product at room temperature without the hassleof freezer storage. The bio-implant is processed with LifeNet Health’sproprietary and patented Allowash XG® technology. Since 1995, LifeNetHealth has distributed 1.8 million bio-implants with no incidence of dis-ease transmission linked totissue screened and processedusing Allowash XG.

The VG1 Cervical bio-implant is co-developed byLifeNet Health and DePuySpine and is exclusively rep-resented in the U.S. byDePuy Spine.

LifeNet Health, Inc.Tel: 888-847-7831www.AccessLifeNet.org Enquiry No 30

STATURE™ Vertebral BodyReplacement System

The STATURE VBRSystem by Atlas Spineis a radiolucent self dis-tracting spacer designedto meet the most chal-lenging demands of thespine surgeon. The system’s proprietaryinstruments and unique implant geometry providea simple, controlled method for restoring the naturalanatomical height and sagittal balance to severely compromised spaces.

The STATURE system is complemented by the BACK-PAKTM DS,Atlas Spine’s comprehensive disc preparation set. MIS compatible, thesystem is designed to maximize proficiency and provide the optimumweight, balance and feel for the surgeon. The BACK-PAK DS supportsthe philosophy that an efficient and successful surgery is significantlyimpacted by less invasive instrumentation and techniques as well as theimplants themselves.

Manufactured from PEEK Optima®, STATURE implants are availablein lordotic and non-lordotic options ranging in 9 - 17mm heights.

STATURE™ and BACK-PAK™ are trademarks of Atlas Spine, Inc.Optima® is a registered trademark of Invibio.

Atlas Spine, Inc.Tel: 561-741-1108 www.atlasspine.comEnquiry No 31



PPRRAACCTTIICCEE MMAANNAAGGEEMMEENNTT SSOOLLUUTTIIOONNSS

The path to becoming an orthopaedic surgeon is long and arduous. Aftercompletion of medical school and residency, most surgeons look forwardto beginning the “practice” of orthopaedic surgery. In reality, thatpractice is not something that simply begins on the day after completionof residency or even after passage of orthopaedic board examinations.The practice is actually a continuum of learning and skill acquisition thatwill take the young surgeon on a journey for the next 30 or 40 years.During this time, the practice itself will change with respect to demandson resources and organizational support in ways never imagined by theyoung surgeon.

The career of an orthopaedic surgeon comprises three main phases.Understanding these phases gives insight into the surgeon’s changingneeds regarding practice support. The first phase, occurring shortly aftergraduation from residency, is that of the acquisition of knowledge.Although most orthopaedic surgeons feel that at the completion of theirchief resident year they are able to handle any orthopaedic problem withease, the reality soon sets in that orthopaedic skill is an acquired one, andtruly develops over time. It takes approximately ten years for anorthopaedic surgeon to develop all of the skill sets to be an accomplishedpracticing surgeon. During that time it is very important that the surgeonsee and participate in as many different case situations as possible.During this early career, the acquisition of knowledge should be thesurgeon’s primary motivating force. During this phase there runs aparallel path of knowledge acquisition in the development of thebusiness of being an orthopaedic surgeon. Surgeons learn very littleabout developing and managing a surgical practice during residency. Thesurgeon will look for outside help in billing, electronic health records,buying into a practice or building one from the ground up. During thistime many surgeons change their practice situation, dealing withcontractual and financial issues as they seek a good fit to establishing apermanent practice.

The second phase, which typically begins ten or so years followingcompletion of residency, is one of practice development. Surgeons todayare faced with a dilemma of joining an established orthopaedic practice,staying on staff with an academic faculty or building their own practices.Each situation has advantages and disadvantages. Most surgeons inprivate practice typically face the challenge of developing a patient andreferral base that will be loyal to and supportive of their practice over theyears. It is during this second phase of professional development that thepractice starts to build for those surgeons who have either gone into theirown practice or joined a small group practice. During this phase, itbecomes clear that the greatest referral source is a successful patient whoacts as the ultimate marketer. Conventional modalities of building

practice volume, including advertising, directed marketing and so on,pale compared to the power of a successful and happy patient who tellsother patients about the surgeon. During this phase, the surgeon willmake business choices including whether to contract with payers or tofocus on a patient-centered approach devoid of contracts. The businessside of the practice development phase is dominated by cost controlstrategies and expansion of business opportunities. During this phase, thesurgeon may decide to develop a surgery center, move to digital radiog-raphy or take in a younger partner to build the practice’s financial base.The surgeon will need access to capital to help fuel this growth. On thecost control side, the surgeon may look to develop a more efficientbilling system, implement a credit card strategy to collect fees, or findless expensive record storage options.

The third phase of professional development for an orthopaedicsurgeon begins approximately 15 to 20 years after graduation from theresidency program, when the surgeon has had a stable and thrivingpractice and is now more concerned more about wealth preservation andproviding for the future. Now the surgeon may look for help on retire-ment planning or potentially embarking upon a professional life beyondthe practice. Most surgeons do not simply turn away from the practice oforthopaedic surgery and retire. The true orthopaedic professionalunderstands that being an orthopaedic surgeon is really much more aboutwho they are and not just what they do. This time can be very rewardingand fulfilling.

The three phases of orthopaedic professional development occur afterresidency and are consistent and inevitable. The business demands of thesurgeon change during this path of professional development and arepredictable. The practice of orthopaedic surgery, although challenging, isincredibly rewarding and allows for a lifetime of knowledge acquisitionand service.

Tom Grogan is a pediatric surgeon from Santa Monica, California and aco-founder of Ortho Practice Solutions (OPS), a financial andeducational services company dedicated to orthopaedic surgeons. OPScan be contacted at 888-678-4694. Dr. Grogan can be reached [email protected].

Please feel free to contact OPS directly by faxing the following contactform.

Author: Thomas Grogan, M.D.

Stages in the Career of an Orthopaedic Surgeon

Enquiry No 32



TranS1 noted that a reimbursement coding committee will propose a separate Category IIItracking code for transacral lumbar fusion. The code would allow TranS1 to collect data in supportof a Category I reimbursement code for the procedure by 2009. If successful, the code couldbecome effective in 2010. (Form 8-K, TranS1 Inc., SEC.gov, 2/19/08)

A third round of results from the Spine Patient Outcomes Research Trial (SPORT) revealed thatsurgical treatment of spinal stenosis yielded more rapid improvement and better physical function,as well as less pain, vs. non-surgical treatment, though patients who declined surgery were likely toimprove over time. Future trial results will address cost-effectiveness and other measures.

(Dartmouth College, 2/20/08)

SonoSite introduced S-MSK™, a handheld ultrasound tool customized for musculoskeletalspecialists. S-MSK technology acquires an optimal image using only two controls, and can beutilized for superficial and deep assessments, guidance of injections and aspirations of the knee,shoulder, elbow, etc. (SonoSite, Inc., 2/22/08)

The World Health Organization is funding a web-based tool called FRAX that calculates thelikelihood of a hip, wrist, shoulder or spine fracture within the next ten years for anyone aged40 or older in nine different countries. (AP Medical, 2/25/08)

Researchers are investigating use of an unusually pliant and strong synthetic hydrogel that mayfunction as a cartilage replacement. The material reportedly won’t break apart even whendeformed over 1,000%. (National Institute of Standards and Technology, 3/10/08)

Study results suggest that patients who underwent arthroscopic surgery to treat 1st-timeshoulder dislocations maintained excellent use of the affected joint at 11+ years and, on average,reported function at 93% of pre-injury levels. (HealthDay News, 3/10/08)

Researchers in New Zealand are investigating biomimetic intervertebral disc replacements foruse as a clinical alternative to spinal fusion. The team is studying polymers and novel solvents incombination with processing methods such as electrospinning to produce nanofibers that mayrecreate disc properties. (The Engineer Online, 3/13/08)

ArthroCare launched a fully operational, five station Mobile Surgical Skills Center for sportsmedicine-related surgical training and physician education in the U.S.

(ArthroCare Corp., 3/13/08)

Results from mechanical testing suggest that Titan Spine’s Titanium Vertebral Body Replacement,ENDOSKELETON® TA, performed “exceptionally well” with respect to pull-out strength. The devicewas compared to a variety of others in materials including PEEK, allograft bone implants andtitanium threaded fusion devices. (Titan Spine, LLC, 3/18/08)

Results from a 5-year follow-up study of 884 osteoporosis patients suggest that vertebroplastyprovides dramatic pain relief and sustained benefit, and that the procedure does not increase therisk of fracture in nearby vertebra. The average pre-treatment pain score on the 11-point VisualAnalog Scale was 7.9 +/- 1.5, and it dropped significantly to an average of 1.3 +/- 1.8 after thevertebroplasty treatment. Abstract 182, “Percutaneous Vertebroplasty in the Osteoporotic Patients:Five Years Prospective Follow-up in 884 Consecutive Patients,” can be found atwww.SIRmeeting.org. (Society of Interventional Radiology, 3/19/08)

LDR completed enrollment for a U.S. 2-level Investigational Device Exemption study of the2nd-generation Mobi-C® cervical disc. The device has been used to treat >5,500 patients worldwide,including 600 patients involved in this study. (LDR, 3/24/08)

Emerging Orthopaedic Technologies & Treatments

ACCIN Patellofemoral Screw System; ACCIN PedicleScrew System (ACCELERATED INNOVATION)

BioFlex Pedicle Screw System (BIOSPINE)

AperFix Interference Screw (CAYENNE MEDICAL)

Oria Natura Spacer (CHOICESPINE)

Extended Articulation Humeral Head (DVO EXTREMITY SOLUTIONS)

Suture Lock Bone Screw Anchor (KFX MEDICAL)

BCP Bone Void Filler (GRAFTYS)

Spinal Sphere System (LIFE SPINE)

Total Hip System Quadra S + C; MectaCer BIOLOXForte Femoral Heads (MEDACTA)

K-Phate Bone Graft Substitute (MERRIES INTERNATIONAL)

Savannah Lumbar Percutaneous Stabilization System (NEUROSPINE INNOVATIONS AND SOLUTIONS)

Modular Foot System (ORTHOHELIX)

Plating System (ORTHOPEDIATRICS)

DC Ulnar Shortening System (ORTHOPRO)

Plexur P and Plexur M Bone Void Fillers (OSTEOTECH)

Buttress Washer System (RELIANCE MEDICAL SYSTEMS)

Nails and Pins (SANATMETAL)

Kimba Mini Vertebral Body Replacement (SIGNUS)

TwinFix PK FP Suture Anchor (SMITH & NEPHEW)

EnsplintRx Bone Fixation System (SONOMA ORTHOPEDIC PRODUCTS)

Indus Anterior Cervical Plate System (SPINEFRONTIER)

Cimplicity Spinal System (SPINESMITH PARTNERS)

Unicompartmental Knee (VALPO ORTHOPEDIC TECHNOLOGY)

FDA 510(k) Releasable Database2/08 and 3/08

Recent FDAClearancesFebruary and March 2008

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Ticker Track (Based on close of business, 3/31/08)

Ticker 52-Wk 52-Wk Chg vs. Chg vs. Company Symbol High Low Close Prior Mo. Prior Yr.

aap † AAQ 5.28 3.09 3.59 6.5% 14.0%

Alphatec Holdings ATEC 6.53 3.26 5.02 -13.1% 19.5%

ArthroCare ARTC 65.70 32.54 33.35 -16.9% -7.5%

BioMimetic Therapeutics BMTI 19.51 6.35 8.00 -41.8% -51.6%

co.don AG † CNW 3.30 1.54 1.57 -19.1% -38.4%

ConMed CNMD 32.02 21.14 25.64 -4.9% -12.3%

Corin Group †† CRG.L 13.16 7.82 9.40 -17.3% 22.9%

curasan † CUR 4.40 2.32 2.82 -4.4% -14.5%

Cytori Therapeutics † XMPA 7.70 4.35 4.74 -19.8% -18.0%

Exactech EXAC 27.99 14.11 25.19 -4.0% 58.5%

Hanger Ortho Group HGR 13.30 8.61 10.78 -7.0% -7.6%

Inion †† IIN 0.91 0.23 0.35 2.9% -50.7%

Japan MDM§ 7600 2.93 2.08 2.46 0.8% -4.3%

MAKO Surgical MAKO 11.99 8.36 8.99 -14.5% N/A

NuVasive NUVA 44.96 23.12 34.51 -10.5% 45.3%

Orthofix OFIX 61.66 35.50 39.77 -0.7% -22.1%

OrthoLogic OLGC 1.64 0.79 0.85 -19.0% -45.5%

Orthovita VITA 3.72 2.02 2.58 -10.1% -11.6%

Osiris Therapeutics OSIR 19.05 9.98 12.58 22.5% -32.8%

Osteotech OSTE 8.70 4.12 4.75 8.7% -37.8%

ReGen Biologics RGBI 0.51 0.04 0.15 25.0% -70.0%

RTI Biologics RTIX 11.99 7.02 9.45 9.9% 30.3%

Smith & Nephew SNN 68.48 54.08 65.99 0.9% 4.0%

Stryker SYK 76.89 58.45 65.05 -0.1% -1.9%

Symmetry Medical SMA 19.22 14.14 16.60 -6.7% 1.7%

Synthes ‡ SYST 158.64 124.00 142.47 0.4% 16.5%

TranS1 TSON 26.48 8.61 11.65 -11.9% N/A

Wright Medical Group WMGI 31.80 21.06 24.14 -8.3% 8.3%

Zimmer Holdings ZMH 94.38 63.00 77.86 3.4% -8.8%

†Converted from Euro to USD; 1€ = 1.5715 USD.††Converted from British Pound to USD; 1£ = 1.9919 USD.‡Converted from Swiss Franc to USD, 1CHF = 0.9922 USD.§Converted from Yen to USD, 1¥ = 0.0098 USD.

In order for a company to qualify for inclusion in the OrthoInvestor Update, orthopaedics must represent at least 60% of itsrevenues.

Company Financials†

2007 vs 2006

Company Sales vs.($MM) Prior

Alphatec $80.0 +8%

ArthroCare $234.2 +24%Sports Medicine $189.6 +14%Spine $44.7 +68%

ConMed $413.8 +10%Arthroscopy $264.5 +13%Power Instruments $149.3 +9%

Exactech $124.2 +21%Knee $63.4 +18%Hip $22.6 +26%Shoulder $9.5 +95%Tissue Distribution $16.2 +21%Other $12.5 -2%

NuVasive $154.0 +57%

Orthofix $442.6 +38%Spine $243.2 +68%Orthopaedic $111.9 +17%Sports Medicine $87.5 +11%

Osteotech $104.3 +5%DBM $65.8 +14%Hybrid/synthetic $1.8 +39%Traditional Tissue $17.6 +4%Spinal Allograft $10.7 -22%Client Services $7.6 -17%Other $0.7 +23%

Smith & Nephew $2,590.0 +13%Hips $469.0 +21%Knees $568.0 +9%Fixation $376.0 +10%Clinical Therapies $215.0 +20%Endoscopy $732.0 +10%

Synthes $2,759.7 +13%

TranS1 $16.5 +183%

Wright Medical $386.9 +14%Knees $102.3 +7%Hips $134.3 +8%Biologics $76.0 +15%Extremities $62.3 +37%

†Orthopaedic product sales only. Constant currency

Company news releases, 2/08

OORRTTHHOOIINNVVEESSTTOORR UUPPDDAATTEE



As the U.S. economy seems to be hurtling with ever greater certainty intorecession (if we are not already in the middle of one), our clients have beenasking whether to expect orthopaedics to go down with the rest of the ship.

The reflexive, and maybe most intuitive, answer is “no.” The demand fororthopaedic procedures is not economically driven. An arthritic hip is not socourteous as to wait for the unemployment index to drop below a certainthreshold before requiring treatment. People come in for surgery when thepain of postponing has become too much to bear, which has nothing to dowith what the broader economy is doing.

Of course, there are myriad variables that could throw this intuitiveanswer off. Do hospitals push back harder on price when the economicoutlook seems grim? Does higher unemployment cause a decrease inprocedure volume as patients lose insurance coverage?

A more rigorous analysis of the relationship between growth in theorthopaedic industry and the broader economy may be instructive. For thepurposes of this discussion, we will focus on U.S. hips and knees, the largestmarket in orthopaedics, and the driver of growth at most of the largeorthopaedic companies. We focus on Real GDP as the indicator of activity inthe broader economy, which declines during a recession.

The last recession in the U.S., as determined by the National Bureau ofEconomic Research, lasted from March 2001 through November 2001.Exhibit 1, below, charts total year-on-year growth in U.S. hips and knees incomparison to year-on-year growth in Real GDP.

This chart tells us a few things. First, U.S. hip and knee growth actuallyaccelerated through the last recession in the U.S. In fact, during the 18months from 2Q00 through 4Q01, when GDP steadily decelerated from4.8% to 0.2%, hips and knees steadily accelerated from 7.7% to 22.4%. Inshort, GDP growth and orthopaedic growth showed an inverse correlationduring the last recession.

At other times, changes in GDP growth appear to have had a directrelationship with hip and knee growth. From 1Q03 through 1Q05, GDP andhips and knees followed a relatively similar pattern in changes in growth,though the magnitude of change was very different. Interestingly, during thisperiod, changes in hip and knee growth actually preceded changes in GDPgrowth by a quarter.

After 1Q05, the two diverged again; hips and knees decelerated from2Q05 through 1Q06 while GDP was relatively flat, and then acceleratedfrom 2Q06 through the present, when GDP was flat or decelerating.

For the total period shown, growth in the hip and knee market shows acorrelation with GDP of -0.17; p=0.36, i.e. a weak inverse correlation, notreaching statistical significance.

The takeaway is that despite periods of some apparent correlation,Real GDP and the hip and knee market have not shown a consistentdirect relationship, and have in fact more often than not moved inopposite directions. The implication for the question we posed at thebeginning of this piece is that a decline in GDP (i.e. a recession) cannot

Does U.S. Recession Mean OrthoRegression?

Author: Philip Legendy


AARRTTIICCLLEE

Exhibit 1: U.S. Hip & Knee Growth vs.Real GDP Growth: 2000 to Present

Source: Company reports, Bureau ofEconomic Analysis, Thomas WeiselPartners LLC analysis.



Enquiry No 33

AARRTTIICCLLEE


be shown by historical example to lead to a decline in growth for theorthopaedic industry.

But our analysis cannot be complete without attempting to understand thedrivers of growth. In other words, we need to understand why growth ischanging. Throughout the entire period shown in Exhibit 1, unit volume wasrelatively stable, in the mid-to-high single digits, while total growth swungfrom six percent in 1Q00, to 21% in 1Q04, and then back down to fivepercent by 1Q06.

The swing factor is price. In our analysis of the orthopaedic industry, wefocus on price as the most important driver of market growth, simplybecause it is the largest moving part. If you can predict changes in price, youcan predict changes in total growth for the market.

The price the big companies receive for their products is directly relatedto the global price hospitals receive from payors for hospital services.Hospitals tend to fund less profitable procedures with funds from other areasof the hospital in order to meet volume demands. As prices of orthopaedicdevices rise, and orthopaedic procedures necessarily become less profitable,the hospital’s ability to draw funds from other areas determines whetherprices can continue to rise. For this reason, total pricing in the hospital, anindicator of the financial health of the hospital as a whole, is most importantto orthopaedic pricing. Reimbursement for orthopaedic procedures is(perhaps surprisingly) not much of a driver at all. So long as hospitals areable to pass higher prices on to payors, they will be less sensitive to changesin the price of orthopaedic devices.

We follow hospitals’ ability to pass on price by looking at Hospital CPI(technically, Hospital and Related Services CPI), a government number.Exhibit 2, below, demonstrates the relationship of Hospital CPI, hip and kneeprice, and Real GDP.

Exhibit 2, which contains historical data going back all the way to 1988,shows hip and knee price (the red dots) next to Real GDP (the purple dashedline) and Hospital CPI (the blue solid line). The chart shows a positivecorrelation between Hospital CPI and orthopaedic price, with inflections inHospital CPI generally leading inflections in hip and knee price by about ayear. There is no correlation between orthopaedic price and Real GDP, andinterestingly, Hospital CPI and GDP are actually inversely correlated.

Similar to our first exercise, this second analysis shows no consistentrelationship between GDP and orthopaedic pricing, the driver of growth inthe U.S. market. In fact, Hospital CPI, a leading indicator of the true driver

or orthopaedic pricing (and therefore total growth) has historically expandedwhile GDP (and the broader economy) has been in decline.

The conclusion from both of these analyses is that GDP and growth in thecore hip and knee market are not related. In other words, the fact that theeconomy may be headed into a recession should have little bearing on thetrajectory of growth for orthopaedics. In fact, Hospital CPI has been in asustained uptrend since late 2005, which means that orthopaedic growthshould be set for at least another year of expansion if not longer.

What could cause our outlook to be wrong? If the recession we are headedinto turns out to be unusually severe and a large number of people end upunemployed, uninsured and unable to afford surgery, procedure volume wouldlikely drop. Another wildcard is the political cycle. The cost of healthcare is abig issue on the campaign trail, and all three candidates have a plan for how torevamp our system. Increased involvement by the government in the determi-nation of price would undoubtedly have a detrimental impact on the industry.Finally, if in an effort to control ballooning Medicare/Medicaid budgets, stateand/or Federal governments begin to significantly cut payments to hospitals,our pricing thesis would be directly impacted, and the orthopaedic industry(along with the rest of healthcare) would suffer. CMS proposed a three percentpayment update to hospitals for the 2009 fiscal year, so cuts would be unlikelybefore 2010.

These are issues which could affect the industry a year or more fromtoday. Major politically driven changes in particular are unlikely to materi-alize anytime soon. For the near term, and assuming that historical trendshold (of which there is, of course, no guarantee), the hip and knee marketshould continue on track. We expect continued expansion in the space, andhave Overweight ratings on all of the orthopaedic stocks under our coverage.

Philip Legendy covers Medical Devices in the Healthcare group atThomas Weisel Partners. He has been with Thomas Weisel Partnerssince 2006, and has been covering the Medical Device sector, includinglarge-cap orthopaedics, for the past five years. Philip’s current coverageincludes Stryker, Zimmer, Wright Medical Group and NuVasive, amongother names in the Medical Device space. Prior to joining ThomasWeisel Partners, Philip covered the space as a research associate at JMPSecurities and Prudential Equity Group. Philip received a B.A. inPolitical Economy from Princeton University. For more information,contact [email protected].

Exhibit 2: Hospital Pricing,Not GDP, DrivesOrthopaedic Pricing

Source: Bureau of Labor andStatistics, Orthopedic NetworkNews, IMS Health, KnowledgeEnterprises, company reportsand Thomas Weisel PartnersLLC estimates



EEXXEECCUUTTIIVVEE IINNTTEERRVVIIEEWW

U.S. Orthopaedic Product News (OPN): Using Artelon® as the example,where do orthobiologics fit into the SBi business strategy?

Anthony Viscogliosi (AV): If history repeats itself, as it has in hips,knees and spine, by moving from fusion to non-fusion – or what I callradical therapies to conservative ones – treatment of osteoarthritis (OA)in the thumb, fingers and wrist will emphasize conservation rather thanremoval of tissue. This is uniquely reflected in the Artelon program.

OPN: Please elaborate on this.

AV: In the four classic stages of joint treatment - removal, repair, replace-ment and regeneration - orthobiologic materials, such as Artelon, havethe ability to support new tissue growth and can eliminate the need toharvest tissue from elsewhere in the body. This represents a conservativealternative to ligament reconstruction tendon interposition (LRTI) andfusion procedures, which are still widely performed in thumb repair.

OPN: What level of acceptance has the Artelon Spacer experienced todate?

AV: We estimate that there are at least 5,000 patients with Artelonimplants worldwide. The Artelon CMC Spacer was originally cleared byFDA in 2004 to be used as an interpositional spacer between the trapezialand first metacarpal bones – for patients with thumb disabilities causedby OA. Since then, the product line has been augmented to include prod-

ucts for arthroscopic implantation such as the Artelon CMC SpacerArthro and the Artelon Spacer STT for the scapho-trapezio-trapezoidaljoint.

OPN: What has been the typical experience for those with Artelonimplants?

AV: Initial outcomes have been very positive. Clinical studies1 and anec-dotal feedback from surgeons and patients indicate that patients benefitfrom the relief of OA pain and significantly improved pinch strength –which is the ability to oppose your fingers as in holding a key or glass.Patients are obviously happy with a less invasive alternative to the LRTIprocedure that requires resection of the trapezial bone, combined withthe sacrifice of tissue harvested from the forearm.

OPN: Exactly what stage in the progress of OA is suitable for this pro-cedure?

AV: Artelon usually offers patients a less radical surgical alternative inthe early- to mid-stages of disease progression. Artelon tends to workbest for those patients with OA defined as late Eaton Stage I throughearly Stage III. These patients will have failed non-surgical therapy suchas NSAIDs, splinting and corticosteroid injections. Patients who exhibitsigns of pan-trapezial disease (STT joint involvement) tend to benefitless from the Artelon CMC Spacer. This fact led us to develop theArtelon STT Spacer for that joint.

Anthony G. Viscogliosi is the Chairman and Chief Executive Officer of Small Bone Innovations,Inc. (SBi). He was instrumental in the research, development and funding of SBi, along with hisbrothers John and Marc. SBi’s mission is to be the single-source provider of innovation, productsand technology for orthopaedic surgeons treating bones and joints from the fingers to the shoul-der, and from the toes to below the knee.

Founded in 2004, SBi has more than 130 employees in the U.S. and France. It also has accu-mulated more than 60 product systems via acquisitions, licensing and in-house development.

U.S. Orthopaedic Product News recently spoke with Mr. Viscogliosi regarding the company’sorthobiologics portfolio.

Chairman & CEO, Small Bone Innovations, Inc.


Anthony Viscogliosi

1 Nilsson, A, et al. Results from a Degradable TMC Joint Spacer (Artelon) Compared With Tendon Arthroplasty, Journal of Hand Surgery (Am), 2005; 30A: 380-389.


Enquiry No 7



OPN: What is the recommended post-operative recovery protocol forArtelon patients?

AV: The thumb must be immobilized in a cast for five to six weeks andany strenuous activity or lifting heavy weights should be avoided for 12weeks, post-op. Pain, redness and swelling can sometimes appear inpatients who try to return to normal activities too soon.

OPN: If it takes at least six years for the body to resorb degradablematerial, are there fluctuations in pain, swelling or joint dysfunction asthe material degrades?

AV: While there have been occasional reports of soft tissue irritation,possibly due to movement of the implant or fixation devices, mostpatients do not report discomfort or pain. During the degradation period,tissue begins to reform around the Artelon scaffold.

In vitro tests2 have shown that Artelon retains about 50 percent of itsoriginal tensile strength after four years. After six years about 50 percentof the original mass remains at the implant site following degradation,while the rest of the material is resorbed into the host tissue.

Exhibit 1, below, shows a light micrograph from one patient with anArtelon CMC Spacer 12 months after implantation. Artelon (A) isstained turquoise and is surrounded by connective tissue with fibroblasts(Fb). The interface between Artelon and connective tissue (I) shows nosign of foreign-body reaction.

Exhibit 1: Light micrograph of the interposition portion from one patientwith an Artelon CMC Spacer 12 months after implantation showsArtelon (A) is surrounded by connective tissue. (Bar=100µ m.)

OPN: How is this reflected in patient clinical data?

AV: The original control group of patients (in Sweden), discussed in theMarch 2005 Journal of Hand Surgery paper, were evaluated after fiveyears. That data indicates patients continue to be pain free and main-tained the statistically significant increases in pinch strength that werepreviously reported (compared to the control group treated with LRTI).Additionally, all patients were clinically stable with no signs of synovi-tis. Biopsy data, as shown in Exhibit 2, has revealed complete incorpora-tion of the biomaterial into the surrounding bone and connective tissue.

Specifically, in Exhibit 2, biopsies obtained from the wings of thespacer on the trapezial and metacarpal bone revealed integration of theArtelon fibers in the surrounding host bone.

Exhibit 2: Light micrograph, CMC biopsy at 6 months, Toluidine bluestain. Arrows denoting bone/Artelon interface. (Bar = µ20 m.)

Further, in Exhibit 1, biopsies from the vertical interposition part ofthe spacer reveal ingrowth of fibrocartilage in the spacer and a complete-ly irritation free interface between biomaterial and surrounding host tis-sue.

OPN: Are any other studies underway that will provide data on patientoutcomes with Artelon?

AV: In addition to the study I just mentioned, the same patient set con-tinues to be followed and Artimplant, the Swedish developer of Artelon,is planning a more extensive analysis, including x-rays, histology, etc.,when the six-year data becomes available.

Other studies that are currently underway include a U.S. multi-centerretrospective study with six surgeons and 73 patients.

OPN: What do you believe are the pros and cons of Artelon comparedwith LRTI and arthrodesis or any other thumb joint surgical procedures?

AV: Anecdotally, surgeons have observed the following “pros” ofArtelon, in no particular order of importance – but obviously each ofthese is significant:

Pros:• It is a less invasive, tissue preserving alternative. There is no

trapeziectomy or tendon harvesting, thus preserving the essentialanatomy of the hand and wrist.

• Artelon patients exhibit clinically significant increases in key pinchand tripod pinch strength, while experiencing pain relief and rangeof motion comparable to LRTI.

• Early restoration of form and function. • Long term reduction of pain comparable to LRTI. • Artelon may be suitable for a broader range of patients, especially

those in earlier stages of disease development. It burns no bridgesand leaves open the option to perform an LRTI at a later stage, ifnecessary.

• Artelon is a relatively simple surgical procedure able to be per-formed under regional anesthesia. It can also be implanted arthro-scopically. Patients can resume many routine, non-stressful activi-ties within six weeks and return to unrestricted use, within reason,after about 12 weeks.




2 Artelon Preclinical Data, Results of Animal, Human Safety & Implantation Work, Artimplant AB, Vastra Frolunda, Sweden.



• Artelon can increase the lost joint space while providing additionalstability to the diseased joint.

Cons:• The Artelon CMC Spacer is not appropriate for treating patients with

advanced (later stage) disease or involvement of the STT joint (althoughwe now have a spacer for that condition, the Artelon STT Spacer).

• As with any “new” procedure, patient selection is critically impor-tant, so Artelon is not an “automatic” substitute for LRTI or evennon-surgical procedures.

• Patients who do not carefully follow the post-operative recoveryprotocol recommended in the IFU can develop pain or swelling.

• Prematurely stressful activity could disrupt the healing process sup-ported by the spacer with the surrounding tissue.

• The early relief of pain and a sense of “healing” sometimes resultsin patients ignoring post-operative recovery protocols – with poten-tially harmful consequences.

• The spacers are not designed to provide lateral stability.

OPN: Although Artelon is still in its infancy, so to speak, do you foreseewider adoption by surgeons?

AV: The orthopaedics market as a whole, and the small bone and jointmarket specifically, are being driven by three factors that SBi and themedical profession have recognized that will impact the prospects forArtelon and most other devices that offer comparable benefits:

1. The human physique is not built to last as long as we are living – orwant to live – without becoming disabled.

2. The disproportionate growth in the number of “older people” in theworld population suggests that orthopaedic devices will proliferate,none faster than those for small bones and joint treatment – almosthalf of all orthopaedist OVs involve the extremities.

3. People are working longer and are determined to remain active bydemanding the preservation or restoration of physical function andmotion – as the volume growth in hip and knee replacement, forexample, amply demonstrates.

OPN: Are there sufficient numbers of surgeons able to meet the kind ofdemand this suggests and who will pay for these new treatments?

AV: According to the 2007 AAOS Orthopedic Physician Census, 49 per-cent of all U.S. Fellowships in orthopaedics cover the small bone andjoint anatomies. In addition to the 2,800 or so hand surgeons in the U.S.,a great many other orthopaedists are capable of performing Artelonimplants. Also, this procedure is reimbursed by many private healthinsurers and SBi has submitted an application to receive a pass throughcode from CMS. Because the Artelon Spacer procedure is so much lessinvasive than more radical procedures like LRTI, both patients and insur-ers will benefit if wider reimbursement is approved.

OPN: You mentioned that OA in the thumb is a common complaint. Doyou have any figures on the number of surgical procedures being carriedout, such as LRTI?

AV: We aren’t aware of any official figures, but based on anecdotal evi-dence and estimates from the 900 or so surgeons who are trained in theuse of Artelon, there may be more than 40,000 LRTI and arthrodesis pro-


Enquiry No 34


cedures being performed in the U.S. annually. Obviously, it is importantto note that not all of these patients would be automatic candidates forthe Artelon procedure. But we do expect the number of people present-ing with symptoms of OA in the base of the thumb to increase exponen-tially – due to the factors mentioned earlier.

OPN: Finally, what are your plans for expanding the range of Artelonapplications in the U.S.?

AV: Late last year we signed a new licensing agreement with ArtimplantAB, the developer and patent holder of Artelon, based in VastraFrolunda, Sweden. The agreement addresses potentially all future resur-facing and interposition applications of Artelon technology in the fingers,hand and wrist domain.

This is in addition to the four FDA-cleared applications for arthriticthumb repair we currently offer. The agreement covers the entire globalmarket with the exception of the Nordic countries.

Artelon® is a registered trademark of Artimplant AB.

Exhibits from this article, as well as the Artelon Biodegradation Leaflet,are available at www.totalsmallbone.com. For more information, pleasecontact [email protected].

Enquiry No 8


Enquiry No 9



PPRROODDUUCCTT FFEEAATTUURREESS

geneX® is a synthet-ic, fully resorbablebone graft, con-ferred with a prop-erty unique to bonevoid fillers, ZetaPotential Control(ZPCTM).

Zeta Potential Control (ZPCTM)The importance of a material’s surface properties in achieving optimalbiological activity and bone formation is well documented. geneX’sproprietary process of Zeta Potential Control is designed to carefullycontrol the surface chemistry of the material. This has been shown toharness a number of key proteins that function as regulatory moleculesfor bone regeneration. By harnessing these proteins, bone cell activityis enhanced, resulting in accelerated bone growth.

geneX is also engineered with SmartPores which produce a devel-oping macroporosity, drawing in cells and nutrient fluids as the graft isabsorbed.

Applied as an injectable paste, geneX can be contoured to the surgi-cal site, and sets in situ at body temperature to an exceptional compres-sive strength.

Biocomposites Inc.Tel: 910-350-8015www.biocomposites.comEnquiry No 37

OsseoFit™ Porous Tissue Matrix™

The OsseoFit™ Porous TissueMatrix™ device is a uniqueresorbable bone void fillercomposed of an interconnected,highly porous, osteoconductivescaffold. The Ceramic PolymerRegion is a resorbable, highlyporous ceramic construct composed of 80% ß-TCP (Tricalcium phosphate)suspended within a Polylactic Acid (PLA) lattice. The Collagen region iscomposed of Type I Bovine Collagen (hide derived, closed herd). The highporosity of the OsseoFit Porous Tissue Matrix device allows hydration withbiologically beneficial sterile fluids, such as autologous blood productsincluding bone marrow aspirate and platelet rich plasma. The OsseoFitPorous Tissue Matrix is intended to be gently packed into bony voids or gapsof the extremities or pelvis caused by trauma or surgery that are not intrinsicto the stability of the bony structure.

OsseoFit™ is a trademark of Biomet Sports Medicine, Inc. Porous TissueMatrix™ is a trademark of Kensey Nash Corporation. OsseoFit™ PorousTissue Matrix™ is manufactured by Kensey Nash Corporation and distrib-uted by Biomet Sports Medicine, Inc. This information is intended forBiomet Sports Medicine sales representatives and surgeons only and is notfor patient distribution.

Biomet Sports Medicine, Inc.Tel: 800-348-9500 ext. 1501www.biometsportsmedicine.comEnquiry No 35

SmartPReP® Bone Marrow AspirateConcentrate (BMAC™) System

Harvest manufactures the SmartPReP® BoneMarrow Aspirate Concentrate (BMAC™)System. The SmartPReP BMAC System isthe first technology that rapidly concentratesclinically significant amounts of stem andprecursor cells from a small aspirate of autol-ogous bone marrow at patient point-of-care.

Before SmartPReP, processing and con-centrating a clinically significant dose ofadult stem cells from a patient’s bone mar-row was difficult and time consuming. WithSmartPReP, as little as 60-120 ml of bonemarrow aspirate can be concentrated at point-of-care in just 15 minutes.The SmartPReP BMAC System has been documented to effectively andreproducibly collect mononuclear cells in concentrations up to 7 timesnative levels while maintaining the viability and function of the cellularcomponents. With minimal processing time, concentrated autologousadult stem cells can be available to the clinician as needed at patientpoint-of-care.

Harvest Technologies Corp.Tel: 877-842-7837 or 508-732-7500www.harvesttech.comEnquiry No 36

geneX®

Orthobiologics

Xybrex Anesthetic Matrix ORTHOCON’s lead product,Xybrex Anesthetic Matrix, pro-vides local pain management andbone hemostasis. During mostorthopaedic procedures, surgeonswill cut or drill into bone, causingbleeding and damaging nervesthat reside in and around the bone,a source of severe pain. XybrexMatrix is applied to these sites during the procedure to stop bone bleed-ing. Once implanted, Xybrex Matrix begins to release effective amountsof a local anesthetic over a prescribed period of time, e.g., three days.After a period of effective pain relief is achieved, the Xybrex Matrix willsafely and completely absorb, requiring no postoperative physician ornurse intervention.

Xybrex Matrix has a putty-like consistency and is designed to adhereto bone. Xybrex products are ready to use out of the package and do notswell after application. Since the medication is designed to be used local-ly, greater amounts of active drug can be administered directly to the ori-gin of the pain than could be dosed to the site systemically.

ORTHOCONTel: 732-418-0025www.orthocon.comEnquiry No 38




AlloFuse® and AlloFuse Plus®

TAlloFuse® products reportedly haveone of the highest demineralized bonematrix (DBM) contents available andare designed to help stimulate naturalbone formation processes in whichmesenchymal cells differentiate intobone-forming cells. Used either aloneor as a bone graft extender, AlloFuse®

products are intended to promote successful surgical outcomes by providing: • Proven osteoinductivity • Superior handling • Excellent graft containment • Ready-to-use application

AlloFuse® Plus combines the capabilities of AlloFuse® with the osteocon-ductive properties of cancellous bone. In one product surgeons now can haveosteoinductivity and osteoconductivity. AlloFuse® Plus has a unique temper-ature-responsive medium that facilitates both handling and graft contain-ment. AlloFuse® Plus benefits include:

• The DBM provides the osteoinductive signal to form new bone• The cancellous bone supplies an osteoconductive scaffold facilitat-

ing the attachment of osteogenic precursor cells.

AlloSourceTel: 800-557-3587www.allosource.orgEnquiry No 39

email your information to [email protected]

To see your products listed within theProduct News

and Product Feature sections

OrthADAPT™ Bioimplant

The OrthADAPT™ Bioimplant isa highly organized Type 1 colla-gen scaffold intended to providesupport for ligament and tendonrepairs in variety of surgical appli-cations.

To provide a strong and reli-able biologic repair, theOrthADAPT Bioimplant is stabi-lized to prevent susceptibility torapid enzymatic digestion afterimplantation. This patented technology utilizes a non-toxic, non-glu-taraldehyde method of crosslinking the collagen. Sterilization isachieved without the use of gamma irradiation or ethylene oxide and theresult is a safe, biocompatible, highly organized type 1 collagen scaffoldwith unparalleled clinical utility.

The OrthADAPT™ Bioimplant is designed for a wide variety of softtissue repairs, including orthopaedic, sports medicine, and foot and ankleapplications.

Pegasus Biologics, Inc. is a medical device company focused on thedevelopment of advanced biologic implants for a broad range of surgicalapplications including the repair, augmentation, reinforcement andreconstruction of soft tissues.

Pegasus Biologics, Inc.Tel: 800-650-1816www.pegasusbio.comEnquiry No 40

Artelon® Bioabsorbable Spacers

Artelon® CMC Spacer is designed asa conservative, tissue preservingoption for the treatment of early stageCMC joint arthritis. The Artelon®

CMC Spacer is CE-Marked, FDAcleared and marketed globally bySmall Bone Innovations.

Artelon Spacers provide a particu-larly attractive option for patients atthe early- to mid-stages of diseasedevelopment. Patients suffering fromCMC OA are often not appropriatecandidates for more radical alterna-tives like trapeziectomy or jointfusion. The Artelon Spacer familyconsists of four products geared totreatment of thumb based osteoarthri-tis at different stages of disease pro-gression. The original Artelon CMCSpacer was launched in the U.S. in2005. Since then, over 4,500 proce-dures have been performed. In 2006,the Artelon CMC Spacer LG wasintroduced to treat patients with larg-er anatomies. In 2007, the line wasexpanded with the Artelon CMCSpacer Arthro and the Artelon STTSpacer.

The Artelon® CMC Spacer Arthro was designed to allow minimallyinvasive, arthroscopic implantation in the joint between the first metacarpaland the trapezium. By avoiding violation of the joint capsule, the proceduremay offer significant advantages to surgeons and their patients such asmaintenance of joint stability, faster recovery and less pain.

The Artelon STT Spacer is implanted into the scapho-trapezial-trapa-zoidal (STT) joint at the base of the thumb. The Artelon STT Spacer issimilar in size to the Artelon CMC Spacer LG, except that it has a “sin-gle wing” design (an L-shape vs. a T-shape). The spacer is designed topreserve the STT joint and to help restore joint function while minimiz-ing the need to sacrifice healthy bone and tissue.

Small Bone Innovations, Inc.Tel: 866-SBi-TIPS (866-724-8477)www.totalsmallbone.comEnquiry No 41




IntroductionEOS, a new orthopaedic imaging system developed in Europe by theFrench company biospace med1, has recently been cleared by FDA forsale in the U.S. The system was developed by Georges Charpak, who in1992 won the Nobel Prize for his invention of a new high-energy physicsparticle detector which has been incorporated into EOS. Due to thedesign properties of the detector and configuration of the imager, theEOS system (shown in Exhibit 1) allows x-ray imaging to be performedat a much lower dose, with very high contrast and without the distortioninherent in longer length film or digital imaging systems.

Exhibit 1: EOS 2D/3D System

While the new imaging detector concept was based on Charpak’stechnology, image quality and product design specifications were a directresult of a collaboration between Charpak and several physicians andbiomedical engineering partners, most notably French orthopaedicsurgeon, Dr. Jean Dubousset, and pediatric radiologist, Dr. GabrielKalifa.

The clinicians identified a variety of unmet orthopaedic imagingneeds, such as the need to create undistorted, long length images without

digital stitching. Also desired were accurate weight-bearing images thatpermitted 1:1 measurements along with visualization of the skeleton in athree-dimensional fashion (3D). In addition, because Dubousset is apediatric orthopaedic surgeon and Kalifa a pediatric radiologist, bothdrove the design specification to reduce dose to the patient. As a result,EOS delivers an up to ten times lower dose than conventional radiog-raphy and up to 1,000 times less of a dose than CT. The elevated radiationdose to the population as a result of medical imaging is receiving recentattention in the media and is particularly critical for the pediatric popula-tion.2

EOS: 2D Imaging SystemEOS digital x-ray imaging acquisition system is based on Charpak’s

novel gaseous particle detector technology. The imaging gantry allowsfor the simultaneous acquisition of two orthogonal planar images in avertical scanning mode. The architecture of the image acquisition methodutilizes the technique of linear slot scanning (See Exhibit 2), which facili-tates use of a unique 3D reconstruction algorithm, contained in acompanion workstation called sterEOS.3

Exhibit 2: EOS Scanning Technique

The gantry is composed of twosets of detectors and x-ray tubespositioned orthogonally andsupported by a mobile C-arm. This C-arm moves vertically, guided by threecylindrical slide bars. The patient ispositioned at the intersection of thetwo x-ray fan-beams which scan thepatient vertically. A single scan willsimultaneously produce both AP andlateral images of the patient. Each

imaging chain is composed of the x-ray source (tube), the beam shutter,the collimation elements and the x-ray linear detector. Fan beams arecollimated both vertically to match the height of the detector entranceslit, and horizontally to limit x-ray to the width of the patient region ofinterest.


Author: Didier Saint-Félix, Ph.D.

A New Orthopaedic ImagingSystem: EOS, Ultra Low Dose2D/3D

1 Corporate headquarters for biospace med is in Paris, France and in Atlanta, Georgia, USA, with an office in Montreal, Canada. www.biospacemed.com 2 “Breast Cancer Mortality After Diagnostic Radiography” Spine Vol. 25, #16, p. 2052-20633 sterEOS has been designed as a 3D and orthopedic workstation and is currently under review by the FDA, and is therefore not yet approved for commercial sale in the US. sterEOS is

available commercially in Canada and Europe.


Enquiry No 10


A C DB



Vertical linear scanning allows the acquisition of long length imageswithout being limited by the detector’s vertical dimension. Full spineimages are easily created in about 12 seconds for an adult and sixseconds for a child. The EOS system has a scanning range of up to 175cm and a scanning speed of up to 30 cm/sec.

Because the frontal and lateral images are taken simultaneously in abi-plane configuration, they are perfectly aligned and registered allowinglength and angle measurements to be made from within 3D space. Sinceall radiographs are projections of a 3D structure onto a two-dimensional(2D) plane, and therefore contain projection related errors. sterEOSworkstation provides a 3D ruler to enable length and angle measure-ments to be made in 3D space. (See Exhibit 3.)

Exhibit 3: EOS Digital X-ray Images

Imaging Technology Behind EOSEOS utilizes a new type of gas particle detector, as seen in Exhibit 4,

based on charge multiplication effects in a rare gas. The x-ray photonsentering the detector are directly converted into an electrical signal whichis then digitized to form the pixel values in the image. The signal hasreduced loss compared to conventional image detectors resulting in highsensitivity and enhanced dynamic range within the image. This in turnoptimizes contrast enabling unusually good imaging of both hard andsoft tissues.

Exhibit 4: Charpak Detectors

The slot scanning methodology further contributes to both imageenhancement and reduced dose by rejecting all scattered radiation. Thisdrastic reduction of scattered radiation leads to an improved signal-to-noise ratio at the entrance of the detector, which translates into imagequality improvement and the capacity for significant dose reductionwhile maintaining the same level of clinical information.

As one example, a comparative study performed at Erasmus Hospital,Brussels and St. Vincent de Paul, Paris on 64 scoliosis patients comparedradiation dose between EOS and conventional screen-film systems4.Based on this study of 64 patients, EOS dose measurements (EntranceSurface Dose and Entrance Surface Air Kerma) were 85 to 89% belowthose obtained using conventional screen-film modality. In addition,image quality scores yielded a significantly higher score for EOS than forscreen-film images. A sample of the image quality comparison betweenradiographs provided by both EOS and screen-film for the same subjectis shown in Exhibit 5: a) EOS images of a whole spine, AP view; b)corresponding screen-film image; c) EOS image of a whole spine, lateralview; d) corresponding screen-film image. Because of the lower doseand higher image quality, it was concluded that EOS would be preferableto use in place of traditional radiography systems.

Exhibit 5: EOS vs. Screen-film Image Quality Comparison

sterEOS: 3D ReconstructionIn addition to the basic 2D imaging capabilities, sterEOS is a

workstation which provides the ability to obtain 3D weight-bearing


4 Le Bras, A. Dorion, I. Ferey, S. Maccia, C. Parent, S. Kalifa, G. Low Dose 2D-3D Xray scanning images for Osteo-Articular Patholgies: Initial Results on Scoliotic Children Population.Submitted for publication: European Radiology 2006.





reconstructions. Reconstruction of the 3D bone envelope is performedusing both AP and Lateral views that have been acquired simultaneously,and an a-priori 3D statistical model of human spines. This model hasbeen constructed by digitizing the 3D shape of bones over a large popula-tion of healthy and pathologic subjects and estimating the statisticalrelationships between the critical parameters describing the 3D shape ofindividual bones as well as the relationships between related bones, suchas the vertebrae of the spine.

The user initiates the reconstruction process by positioning, on the APand lateral view, a few anatomical landmarks as shown in Exhibit 6.These landmarks, with the help of edge detection algorithms and statis-tical inference, allow the software to produce a 3D reconstruction. This3D reconstruction can then be manipulated by the operator to produce a3D rendering (See Exhibit 7).

Exhibit 6: Anatomical Landmark Placement

Exhibit 7: 3D Spine Rendering

Currently, sterEOS allows the user to create a 3D rendering of thespine; a lower extremity module is currently in development. As themodel is created, the system identifies the nature of each bone andcritical reference points. Once the 3D model is complete, because eachanatomical area or point of interest is known and located in space, thesoftware can automatically generate over 100 angle and length calcula-tions which have been pre-programmed into the system, including Cobbangle, Kyphosis and Lordosis, Pelvic Parameters and VertebralRotations. Unlike calculations made from 2D x-ray images distorted bythe conical projection inherent to 2D detector usage, these calculationsare accurate because they have been computed from within 3D space,which should enable more accurate and effective diagnosis, treatmentand surgical planning. In addition to the calculations, the software allowsthe user to highlight individual structures and adjust the angle of viewfrom which the image is seen by the operator. This enables new planes ofview, such as the “bird’s eye view,” allowing the view from above, asshown in Exhibit 8.

Exhibit 8: 3D Spine Rendering: Bird’s Eye View

The combination of low dose, 3D weight-bearing images and thedevelopment of accurate 3D renderings and associated calculations givesvarious medical specialties access to new and more accurate informationwhich should lead to enhanced therapy decision making, and hopefullyimproved patient outcomes.

Clinical ApplicationThe imaging system is particularly well suited for pathologies such as

scoliosis and adult spine, hip and knee replacements, as well as otherorthopaedic issues that require a weight-bearing assessment for optimaltreatment.

One of the most promising applications is using EOS and sterEOS tomonitor and treat the progression of scoliosis. Because scoliosis is a 3Dspinal alignment issue, the deformation cannot fully be appreciated onplanar x-rays. The 3D rendering that sterEOS produces will providephysicians a more accurate and thorough understanding of a patient’sspinal deformation. For example, the following pediatric patientpresented with idiopathic scoliosis and was examined using EOS by Dr.Dubousset at Saint Vincent DePaul Hospital in Paris, France. Bracingwas recommended by the patient’s physician based on the mild extent ofthe curve. As seen in both the frontal full-spine EOS digital x-ray, Exhibit9 of the patient in the upright position, and the frontal sterEOS 3Dreconstruction of the spine, pelvis and rib cage, Exhibit 10, when thepatient is wearing the brace, the spine seems rather well realigned. Thederotation of the scoliotic curve seems satisfactory as well, and therefore,based on the frontal and sagittal 2D and 3D views, it would be assumedthat the brace had provided the expected result in terms of correcting thescoliotic deformities.

Exhibit 9: EOS X-rays



Pediatric Patient, x-ray imagewithout brace

Pediatric Patient, x-ray withbrace




Exhibit 10: sterEOS 3D Reconstructions

On the other hand, when taking full advantage of the weight-bearing3D reconstruction, and orienting the 3D image to a top down view, asexhibited in Exhibit 11, it is easily seen that not only does the brace notcorrect the deformity of the rib cage, but even worse, it increases thisdeformity. In this particular case, the brace was harmful to the patientbecause it restricted thoracic expansion and applied pressure on thewrong side of the rib cage, thus increasing rib deformity. In this example,the patient can have better brace placement and adjustment leading toimproved non-surgical outcomes. Furthermore, because the majority ofscoliosis patients are children who must be imaged regularly, EOS nowoffers a low dose option for patient follow up.

Exhibit 11: 3D Top-down Views

Another clinical application involves surgical planning for hip andknee replacement surgeries. The full length, weight-bearing imagingcapabilities of EOS provide physicians with a global assessment and therelative positioning of each joint, with respect to each other. Equallyimportant is the benefit that 3D provides in terms of accurate pre-operative measurements. For example, EOS 3D hip calculations canautomatically give neck shaft angle and assess the presence of femoralrotation or torsion. This is vital to all orthopaedic replacement surgeriesbecause it allows for optimal implant selection and placement. Further,when 3D planning is performed for these surgeries, it is often done in CTwhich is not reflective of the weight-bearing, functional position of thehip and pelvis. Using diagnostic images made in the supine positionleads to significant changes in relative position of the bones and joints toone another and ultimately changes the clinical parameters and measure-ments that are made for preoperative planning.

Various applications are also being pursued such as osteotomyplanning and treatment options for degenerative spine and balancedeterioration. Overall, EOS offers a wide variety of clinical applicationsfor diagnosis and treatment planning, as well as the ability to replacenormal x-ray follow ups with a lower dose option.

Didier Saint-Félix, Ph.D. is Chief Operating Officer, Head of R&D atbiospace med. Didier has his Electrical Engineering diploma from EcoleNationale Supérieure d’Electricité in Paris and a Ph.D. in signalprocessing. He has 30 years of R&D and commercialization experiencein launching a variety of “first of a kind” medical imaging systems. Hejoined GE Healthcare in 1986 and developed the first 3D angiographysystem, and then led the development of GE’s digital mammographysystem. Didier is also a quality and regulatory affairs specialist inmedical imaging and has led the 6-sigma program across globalengineering teams. Dr. Saint-Felix can be reached [email protected].


Top-Down 3D image withoutBrace

Top-Down 3D image with Brace

Pediatric Patient, 3D imagewithout brace

Pediatric Patient 3D image withBrace

Enquiry No 42


Enquiry No 11


Enquiry No 12



Much to my chagrin, I have resigned myself to the fact that my regularcontribution to this esteemed publication is becoming more of a gossip col-umn than an erudite review of the medico-legal issues facing theorthopaedic industry. Not that I necessarily mind being “in the know” onsuch issues, but it does make a statement both about the industry in gener-al and what is making news in it specifically. That said, we cannot avoidthe fact that one goal the government had in mind when it began its inves-tigations into the orthopaedic device industry has been achieved; we areall, attorneys, doctors and manufacturers alike, talking about little elsethese days besides the heightened scrutiny in our little part of the world andwhat it will mean as we move forward. And we appear to be making newswell beyond the boundaries of our trade magazines and journal clubs. Talkabounds of physicians receiving subpoenas and company investigationsdigging deeper and deeper into the sales and marketing practices of allmanufacturers, big and small. Devices and the doctors who implant themhave been featured so far this year in The Wall Street Journal, The NewYork Times, and various regional papers throughout the country (mostnotably and predictably Newark’s hometown paper, The Newark StarRegister). Congress has more than three different committees cogitating onvarious issues touching on device industry including disclosure of finan-cial relationships to patients and, dare I say it out loud, the appropriatenessof physician consulting relationships with industry altogether.

Perhaps most disturbing to me is a recent article that came across theDow Jones Newswires indicating the very real possibility (and rumor onthe street has it, a probability) that Zimmer, the largest of the device man-ufacturers operating under a Deferred Prosecution Agreement, will “buyout” all of its surgeon contracts. Presumably this colossal task is beingundertaken to start over with these relationships in a more compliantway, which is a good thing, but the possibility remains that this may sig-nal the beginning of the end for surgeon/industry collaboration. What ifZimmer determines that it does not want to move forward with any con-tracts with physicians? Will industry ever look the same again? Will weever be the same again?

U.S. Attorney Christopher Christie insists that he recognizes the valueof these relationships and that his intention is not to eradicate them alto-gether. I believe him. But I am very afraid that an unintended conse-quence of all of this emphasis on compliance to a level of minutia notseen before will result in just that, an abrupt halt to the very valuablework in which physicians engage every day around the country to devel-op new and improve existing technologies.

I have been a staunch proponent of change in this industry. I have seensome of the abuses that Mr. Christie alleges run rampant, and, like everyone of you, I know at least one doctor who has alluded to the fact that hethinks it is perfectly appropriate for his loyalty to a particular manufac-

turer to be compensated with cash. (No, I will not identify this individ-ual if asked, and yes, he is the very rare exception to the rule.) I alsobelieve that curtailing excessive spending on dinners, travel and giftsmakes perfect sense. We have frowned upon such indulgence in corpo-rate America, why not medical America? But that is where my enthusi-asm for change ends because I see the pendulum swinging dangerouslyfar in the opposite direction. I will never counsel a physician client toskirt the rules or assume that they do not apply to him or her because heor she doesn’t like them. But I will say that I feel their pain. The level ofregulation with which they are being faced in every aspect of their livesis unprecedented. And the idea that I can take a surgeon client to a ballgame, but a sales representative cannot, makes little sense to me. I real-ize that it is a slippery slope and that being vigilant about such matters iscritical. But I also know that isolating physicians and wholly eradicatingtheir relationships with industry, corporate personnel and sales represen-tatives alike, is decidedly not good for patient safety or the advancementof medicine as a whole.

I have expressed my dissatisfaction about this in previous articles, butfeel compelled to do it again. I will likely need a new hip or knee beforemy time in this incarnation is over, and while the existing options aregood, even great in some respects, if I can hold off for thirty more yearsthe way my mom did, the sky is the limit. With continued research anddevelopment, my knee could be made of a material so light I would noteven know it was there. And perhaps this new magic material will be sodurable that I will only need one knee even if I live to be one hundred!And maybe it will have such good flexion and rotation that I will be ableto continue all of the sporting activities that I love and perhaps add a fewmore! I have no idea what the chances of achieving these or other majoradvancements in orthopaedic medicine are with the way such researchand development is currently conducted. What I do know for sure is thatif you take physicians out of the mix and rely solely on the, albeit talent-ed, but non-medical engineers and other personnel who assist with bring-ing new ideas to the market, I will never get my magic knee… and nei-ther will anyone else.

The Law Offices of Teresa Ford, PC (www.tfordlaw.com), located inHouston, Texas, specialize in healthcare and medical device issues.Areas of expertise include healthcare compliance program structuringand training, as well as advising individual physician clients. Foundingpartner Teresa Ford spent many years in the medical-legal arena, mostrecently as senior counsel for Sulzer Medica USA Inc. She can bereached at 832-251-9595 or [email protected].

Will Industry Ever Look theSame Again?

Author: Teresa Ford

Enquiry No 43

1 For example, some manufacturer booths at AAOS actually posted notices declaring that snacks and beverages would not be provided this year in compliance with AdvaMed and other indus-try guidelines and regulations! Can this really be what the government was trying to accomplish?

TTHHEE TTOOPP LLIINNEE


Enquiry No 13



rHead Plating System Small Bone Innovations, Inc. (SBi) has introduced its rHead™ PlatingSystem for internal fixation of proximal radius fractures. The comprehensiverHead Plating system offers four different plates with various rim and neckdesigns for increased reconstructive options, plus locking and non-lockingscrews.

The rHead plates feature a low profile for smooth annular ligament trans-lation during pronation and supination. A unique tripod locking screw helpsprovide a stable buttress support configuration. rHead plates are highly con-toured with an anatomic design to minimize bending. The system offers tra-ditional non-locking, low profile side screws to capture fragments and alocking screw option in the shaft of the plate.

The rHead Plating System is part of SBi’s EMS (Elbow ManagementSystem), the most complete systemavailable to manage the treatmentalgorithm.

The SBi rHead Plating Systemhas received 510(k) clearance fromFDA.

Small Bone Innovations, Inc.Tel: 866-SBi-TIPS (866-724-8477)www.totalsmallbone.comEnquiry No 45

3DM External Fixation Products The 3DM-SO Cannulated DrillPins with Angle Blocks allow forconcentric placement of drill-pins(self-drilling and self-tapping) overa guide wire and eliminatedull/wandering drill bits. The angleblocks facilitate oblique placementon external fixation rings and rods,allowing for better pin spread,lighter frames and stronger con-structs. For further details, contactBeverly Laird, Ph.D. [email protected].

3D Medical Concepts, LLCTel: 205-987-0935www.3dmedicalconcepts.comEnquiry No 47


The MaxFire™ Meniscal Repair System is an all-inside, all-suture meniscal repair system utilizingZipLoop™ Technology. Sutures can be pre-cisely positioned in either horizontaland/or vertical mattress stitches,and then secure fixation isachieved by simply pulling onestrand of suture.

ZipLoop Technology is a uniqueweave in which a single strand of braided poly-ethylene is woven through itself twice in oppositedirections. This construct allows Biomet SportsMedicine to produce innovative products that canvary in length and compression/tension addressing the indi-vidual needs of each patient. Products utilizing ZipLoop Technology areresistant to slippage without tying knots.1

1. Data on file at Biomet Sports Medicine, Inc. Bench test results are not necessarily indica-tive of clinical performance.

ZipLoop™ and MaxFire™ are trademarks of Biomet Sports Medicine,Inc. This information is intended for Biomet Sports Medicine sales rep-resentatives and surgeons only and is not for patient distribution.

Biomet Sports Medicine, Inc.Tel: 800-348-9500, ext. 1501www.biometsportsmedicine.comEnquiry No 44

3-Point Products’ ThumSaver™ MP

Thumb pain and insta-bility from arthritis orligament injuries arethe most commonthumb problems seen.The ThumSaver™ MPfrom 3-Point Products,Inc. has proven suc-cessful in stabilizingand protecting thethumb without limitinghand function.

The ThumSaverMP provides MP jointcontrol and CMC stabilization without limiting wrist motion. TheThumSaver MP splint has application in the treatment of Gamekeeper’sand Skier’s Thumb. Athletes request this splint for collateral ligament pro-tection. Its thin, low-profile design also makes it ideal for those with CMCarthritis as it allows them to participate in daily activities with less pain andgreater function.

Adding a washable breathable ThumSock™ makes this the most com-fortable molded splint with excellent patient compliance. Made from ultra-thin polypropylene, the ThumSaver MP is stain and temperature resistant,washable and adjustable.

3-Point Products, Inc.Tel: 888-378-7763www.3pointproducts.comEnquiry No 46

MaxFire™ Meniscal Repair System

Fixation & Trauma




APTUS®

MEDARTIS®, headquar-tered in Basel, Switzerland,is an innovator in the use ofpolyaxial locking plate andscrew fixation for the treat-ment of fractures of thehand and distal radius. TheAPTUS® product line fea-tures anatomically-designedhand and radius fractureplates.

The APTUS® Hand sys-tem offers low profilelocking and non locking plates with a variety of screw diameters to man-age all types of fractures. The APTUS® Radius system provides variousgeometries to address acute fractures, as well as corrective osteotomies.

All APTUS® locking plates include an ingenious TriLock® screw sys-tem. This technology allows the surgeon to place the plate at the optimalanatomical position and place the screws individually, each at the idealangle for the perfect subchondral position. The TriLock® technologysecures the plate to the bone using a force and friction locking mechanismthrough radial bracing of the screw head within the plate.

MEDARTIS®

Tel: +41-61-228-18 18www.medartis.comEnquiry No 48

Phoenix™ Tibial Nail Biomet Trauma has introduced thePhoenix™ Tibial Nail featuring stateof the art locking, compression andoptimized screw positions with nextgeneration instrumentation. BiometTrauma’s innovative CoreLock™technology provides a patent pend-ing, pre-assembled setscrew thatdually locks the proximal obliquescrews designed for enhanced stablefixation of proximal tibial fracturesand offers up to 5mm of inboard com-pression for acute fracture reduction.In addition, the nail features a distalbone screw cluster that maximizes theworking length of the nail enablingsurgeons to treat from the most proximal to the most distal tibial frac-tures. Exclusive to the Phoenix Tibial Nailing System is a 7.5mm cannu-lated tibial nail that is reportedly the smallest in the industry. ThePhoenix Tibial Nail also offers surgeons a full complement of innovativeand user-friendly features that will enable them to keep pace with thegrowing demand for such procedures.

Biomet TraumaTel: 800-526-2579www.biomettrauma.comEnquiry No 49

Enquiry No 14



When everything seems to be going against you, remember that the air-plane takes off against the wind, not with it.

–Henry Ford

Some look at things that are, and ask why. I dream of things that neverwere and ask why not?

–George Bernard Shaw

Total joint replacement and specifically knee and hip arthroplasty isundoubtedly one of the most successful operations ever devised.Medicare data evaluating the improvement in quality of life/years versusthe number of dollars spent per procedure has shown that no other oper-ation aside from cardiac bypass comes close to total joint replacementoutcomes.

The world changed for hip surgeons when John Charnley published“Arthroplasty of the Hip: A New Operation” in 1961. However, with thisgreat leap in surgical technology came an entirely new set of problemswith which orthopaedic surgeons, engineers and biologists have contin-ued to struggle for over forty years.

Beginning in the late 1800s, most procedures for hip arthritis werefemoral replacements. Glass, vulcanized rubber, ivory and metal articu-lations were all tried with limited success, but all eventually succumbedto early failure. With the advent of total hip arthroplasty, many of theproblems associated with the earlier procedures were eliminated and theprocedure rapidly gained wide acceptance. However, with the tremen-dous growth in the number of replacements being performed came anexpansion of the indications for the procedure to younger and moreactive patients. With the use of joint replacements in younger individualscame increased expectations from patients for higher levels of activitiespost-implantation. Higher loads and stresses experienced by the implantsused in these patients ultimately lead to higher wear and loosening rates.The focus then turned to improving surgical techniques and developingmaterials with lower wear rates and increased toughness, strength anddurability.

In his original article, Charnley stated, “Neither surgeons nor engi-neers will ever make an artificial hip joint which will last 30 years and atsome time in this period enable the patient to play football.” To this daynearly 50 years later this prediction holds true, as the early failure of BoJackson’s hip replacement showed all too well.

The aforementioned basic tenet remains true today for the simple rea-son that total hip replacement remains essentially the same operation asit was in 1961. While vast improvements in wear rates have beenachieved with highly cross-linked polyethylene, ceramic and metal artic-ulations, implant design and modularity and improvements in surgical

techniques, the successor to Charnley’s original operation has yet to bedevised. This is so because present day joint replacement surgery is notreally a joint replacement at all but rather a joint substitution—a metalsubstitution for the native bone and cartilage construct.

The concept of being able to replace damaged bone and cartilage inan arthritic joint with living bone and cartilage has long been consideredthe “holy grail” of joint replacement surgeons, but unfortunately littleprogress has been made in this area. Certainly the entire field of tissueengineering has only recently gained in its maturity and has yieldedinnovative approaches to address bone and tendon defects identified clin-ically and in the operating room. Cartilage, on the other hand, has provenfar more difficult to engineer into clinically useful material. While clin-ical trials are underway for several cartilage repair techniques, other thanthe Genzyme procedure no cartilage constructs are commercially avail-able for surgical implantation—let alone entire bone and cartilage artic-ulations.

For many technical reasons, repairs of even isolated cartilage defectshave been difficult to achieve and other than occasional case reports out-side the U.S. for small joints, no earnest attempt has been made at engi-neering an entire biologic joint replacement. Furthermore, if one takesinto consideration the forces generated across large joints in humans, itis difficult to imagine how any newly-constructed bone and cartilagearticulation would be able to survive in vivo without dissociating or col-lapsing.

Our collaboration with Dr. Jeremy Mao of Columbia University hasrecognized this seeming dilemma and we have proposed a different strat-egy to satisfy the need for early weight bearing strength while at thesame time providing the proper environment for a cell-based construct tomature into a functional biologic joint replacement.

Rather than attempt to engineer a matrix of bone and cartilage whichis sufficiently strong to survive the forces seen across a human hip jointat the time of implantation, we have taken the approach that this proba-bly cannot be done with an isolated tissue-engineered construct at thepresent level of understanding in the field. Instead, we have designed amulti-phase delivery system that serves as a temporary supporting struc-ture for a stem cell osteochondral construct that grows in situ afterimplantation. After the construct matures to the point of loading bearingcapacity, the delivery system, which is initially load bearing, graduallybecomes load sharing and then ultimately is resorbed in a step-wise pre-determined manner. While the consensus is that with what is known atthe present this cannot be achieved, recent data generated in Dr. Mao’s


AARRTTIICCLLEE

Biologic Joint Replacement orWhy Airplanes Fly

Author: James M. Weiss, M.D.




AARRTTIICCLLEE

laboratory has given us evidence that this may be technically feasible.I am reminded of a story told to me by the former director of the

USPTO concerning the early days of the patent office. From the time thatthe patent office was founded by Thomas Jefferson in 1790 up until 1900,miniature working models had to be submitted for review before a devicecould be considered for a patent. As technology evolved the need forchange was recognized, and in 1900 a blue ribbon panel of members ofthe National Academy of Sciences as well as academics was assembledto enact a new set of rules. The result was that a written document wouldbe deemed acceptable for all patent submissions with two exceptions.There were two phenomena which were considered to violate the laws ofphysics and so for these two instances, a continuous motion machine anda heavier than air flying machine, a working model would still berequired. Following the events of December 17, 1903, the panel wasforced to reconvene and drop one of their exceptions.

It is difficult to say what is impossible, for the dreams of yesterday are thehopes of today, and the realities of tomorrow.

–Robert H.Goddard

Why do planes fly? Because two bicycle repair shop workers fromDayton, Ohio were not invited to that 1900 meeting and through impos-sible odds had the vision and the determination to make it happen.

James M. Weiss, M.D. is an orthopaedic surgeon in private practice inChevy Chase, Maryland. He is also the Chief Executive Officer of JointAnalogy Technologies Inc. He can be reached at [email protected] 301-540-4791.

Enquiry No 50

Enquiry No 15

Law Offices of Teresa Ford, PC

Proud to serve the physician community in matters of

health care compliance and business structuring

2500 Tanglewilde, Suite 318, Houston, Texas 77063

tel: 832.251.9595 • fax: 832.251.9599

email: [email protected]

www.tfordlaw.com

Not Certified by the Texas Board of Legal Specialization



Good morning, Mr. Chairman and members of the committee. I amGregory Demske, Assistant Inspector General for Legal Affairs in theOffice of Inspector General of the Department of Health and HumanServices. I appreciate the opportunity to appear before you today to dis-cuss the financial relationships that exist between physicians and themedical device industry. These financial relationships can benefitpatients and Federal health care programs by promoting innovation andimproving patient care. However, these relationships also can create con-flicts of interest that must be effectively managed to safeguard patientsand ensure the integrity of the health care system.

In my testimony, I will discuss the risks associated with industry-physician financial relationships; highlight some of our recent investiga-tions that illustrate these risks; and describe ways to mitigate these risksthrough enforcement actions, outreach to promote compliance, andincreased transparency.

Relationships Between the Medical Device Industry and PhysiciansRelationships between physicians and the health care industry, includ-

ing pharmaceutical and device manufacturers and suppliers, can advancemedical science and benefit patients. In the development of new tech-nologies and products, the interaction between device manufacturers andhealth care professionals can be especially valuable because physiciansplay an essential role in the development, testing, and extensive traininginvolved in producing effective and safe medical devices, such as heartvalves, pacemakers and medical lasers. Physicians also provide ideas andfeedback, conduct research and clinical trials, and share their knowledgethrough participation in medical education programs. Device companiescan legitimately compensate physicians for their actual time and intellec-tual contributions to product innovations and training in the appropriateuse of devices.

However, in an environment where physicians routinely receive sub-stantial compensation from medical device companies through stockoptions, royalty agreements, consulting agreements, research grants, andfellowships, evidence suggests that there is a significant risk that suchpayments will improperly influence medical decision making.Researchers reporting in medical journals, such as the Journal of theAmerican Medical Association and the New England Journal of

Medicine, have found that such financial industry-physician relation-ships are pervasive and that the impulse to reciprocate for even smallgifts has a powerful influence on behavior. Although most physiciansbelieve that free lunches, subsidized trips, or gifts have no effect on theirmedical judgment, there research has shown that these types ofperquisites can affect, often unconsciously, how humans act. 1For exam-ple, physicians who request additions to hospital drug formularies are farmore likely than their peers to have accepted free meals or travel fundsfrom drug manufacturers. 2Similarly, a device company’s largess mayinfluence a physician to favor the company’s products. As the AmericanAcademy of Orthopaedic Surgeons observed, “[w]hen an orthopaedicsurgeon receives anything of significant value from industry, a potentialconflict exists which should be disclosed to the patient.”3

Physicians play a critical role in deciding which medical devices areused in the treatment of their patients. Complex medical devices are gen-erally implanted or otherwise used in a hospital procedure or inpatientstay for which the hospital is reimbursed. The treating physician gener-ally decides or strongly influences the decision regarding which medicaldevice should be used in this hospital setting. Therefore, a device manu-facturer has a strong financial incentive to persuade treating physiciansto use or recommend the manufacturer’s devices.

We do not know how much money device manufacturers pay tophysicians. However, the Government’s recent investigations of severalmanufacturers of hip and knee surgical implants offer some insight. In2005, the orthopedic device market for hips and knees witnessed domes-tic sales in excess of $5.1 billion and worldwide sales of more than $9.4billion. We found that during the years 2002 through 2006, four manu-facturers (which controlled almost 75 percent of the hip and kneereplacement market) paid physician consultants over $800 million underthe terms of roughly 6,500 consulting agreements. Although many ofthese payments were for legitimate services, others were not. TheGovernment has found that sometimes industry payments to physiciansare not related to the actual contributions of the physicians, but insteadare kickbacks designed to influence the physicians’ medical decisionmaking. These abusive practices are sometimes disguised as consulting

DDOOJJ UUPPDDAATTEE

Testimony of Gregory E. Demske, Assistant Inspector General for Legal AffairsSenate Special Committee on Aging Hearing: February 27, 2008

On February 27, 2008, the U.S. Senate Aging Committee held a hearing entitled “Surgeons for Sale? Conflicts and ConsultingPayments in the Medical Device Industry,” in order to “examine the relationships between medical device manufacturing companiesand surgeons.” Among those who testified were representatives from large and small device companies, AdvaMed, and otherrelevant parties. The testimony from the Office of Inspector General set the tone for the discussions. It is printed here in its entirety.

Those wishing to read the testimony of others can find them at aging.senate.gov/hearing_detail.cfm?id=293677&0.

1 See, e.g., The Scientific Basis of Influence and Reciprocity: A Symposium, Association of American Medical Colleges, June 12, 2007; Brennan TA, Rothman DJ, et al. Health Industry Practicethat Create Conflicts of Interest: A Policy Proposal for Academic Medical Centers. JAMA 2006;295:429-33.2 Chren MM, Landefeld CS. Physicians’ Behavior and their Interactions with Drug Companies. JAMA 1994;271:684-689.3 American Academy of Orthopaedic Surgeons, “Standards of Professionalism, Orthopaedist-Industry Conflicts of Interest,” April 2007.



Enquiry No 16



DDOOJJ UUPPDDAATTEE

contracts, royalty agreements, or gifts. The companies and physicianswho engage in such kickback schemes are subject to criminal, civil, andadministrative prosecution.

Additionally, physician ownership of medical device manufacturersand related businesses appears to be a growing trend in the medical devicesector. These business ventures raise substantial concerns that a physician’sreturn on investment from the venture may influence the physician’schoice of device. In some cases, physicians could receive substantialreturns while contributing little to the venture beyond the ability to gener-ate business for the venture. As we cautioned in a widely-disseminated let-ter to a medical device trade association, “[g]iven the strong potential forimproper inducements between and among the physician investors, theentities, device vendors, and device purchasers, we believe these venturesshould be closely scrutinized under the fraud and abuse laws.”4

The financial relationships between device manufacturers and physi-cians merit scrutiny under anti-fraud statutes because the relationshipsraise the types of risks that those statutes are designed to address. Theconsequences of industry-induced bias include risks to patients, healthcare programs, and scientific research. When a physician’s self-interestcompromises independent judgment, the patient faces the risk that thephysician is making decisions that are not in the patient’s best interest.Additionally, excessive payments to physicians increase health care costsand may result in unfair competition. When a device manufacturer paysa physician to influence the physician’s use or recommendation of itsproducts, rather than to advance a legitimate medical interest, the addi-tional costs are passed on to the patients, Federal health care programs,and private insurers. Such payments can also distort the market place byproviding an unfair competitive edge to the company making the pay-ments, regardless of the relative therapeutic value of the company’s prod-ucts. Finally, corrupt payments can compromise medical research inde-pendence and the standards of scientific integrity.

Relevant Federal Anti-Fraud StatutesSeveral Federal statutes are relevant to manufacturer-physician pay-

ment relationships. The False Claims Act is the Federal Government’sprimary civil enforcement tool for addressing fraud. Under the FalseClaims Act, the Government may obtain substantial penalties against anyperson who knowingly submits, or causes the submission of, false orfraudulent claims to the Federal Government. (See 31 U.S.C. §§ 3729-3733.) The False Claims Act allows the filing of qui tam lawsuits againstindividuals or companies that have defrauded the Federal Government.Many people who file qui tam lawsuits (called relators) are employees orformer employees of companies that committed the fraud.

The Federal anti-kickback statute makes it a criminal offense toknowingly and willfully offer or pay remuneration to induce the referralof Federal health care program business. The statute also criminalizes theknowing and willful solicitation or receipt of remuneration in exchangefor such referrals. (See 42 U.S.C. § 1320a-7b(b).) The prohibition appliesregardless of the nature or form of the arrangement. If one purpose of anarrangement is to induce referrals of Federal health care program busi-ness, the statute is violated. Whether a particular arrangement runs afoulof the statute depends on the specific facts and circumstances of thearrangement, including the intent of the parties.

The anti-kickback statute and regulations contain certain “safe har-bors,” which describe arrangements that do not violate the statute ifevery condition of the particular safe harbor is satisfied. OIG’s regulato-ry authority extends to promulgating safe harbor regulations describingcategorical practices that are permissible. Compliance with safe harbor is

voluntary, however, and arrangements that do not fit in a safe harbor arenot necessarily illegal. Rather, they must be evaluated under the statuteon a case-by-case basis.

OIG administrative authorities complement criminal and civilenforcement by providing an additional avenue for sanctioning personswho have defrauded Federal health care programs. For instance, OIG hasthe authority to exclude individuals and entities from participation in theFederal health care programs for engaging in a range of abusive prac-tices, including false claims and kickbacks. (See 42 U.S.C. § 1320a-7.)

OIG may also pursue violations of the anti-kickback statute under aprovision of the Civil Monetary Penalties Law. (See 42 U.S.C. § 1320a-7a (a)(7).) Civil Monetary Penalty (CMP) cases can be attractive alterna-tives to criminal and civil enforcement for several reasons. For example,relative to the False Claims Act, the CMP provides a more direct vehicleto address parties to a kickback scheme regardless of whether anyoneactually submits claims. This makes the kickback CMP particularly rele-vant in cases in which a device manufacturer is paying a physician toinduce the physician to recommend the manufacturer’s device for use ina hospital procedure. In such a case, the claim is submitted by the hospi-tal, which is not a party to the financial arrangement. CMP remedies inkickback cases include monetary penalties of up to $50,000 for each act(offer, payment, solicitation, or receipt of remuneration), assessments ofup to three times the amount of remuneration, and exclusion from partic-ipation in Federal health care programs.

Recent Enforcement ActionsOIG, together with its Government partners, plays a substantial role in

enforcing the fraud and abuse laws through criminal, civil, and adminis-trative actions. In recent years, OIG and the Department of Justice (DOJ)have investigated cases involving industry-physician financial relation-ships in both the pharmaceutical and medical device areas. In these cases,we have seen medical device manufacturers offering physicians lucrativeconsulting agreements to acquire new business and to maintain physicianloyalty. We have also seen instances in which the physicians, in turn, havesignaled to the industry that their loyalties and business are for sale to thehighest bidder. In some cases, it comes down to how much each compa-ny is willing to pay for a physician’s business, which is often being simul-taneously solicited by multiple competing companies.

Kickbacks offered to physicians by medical device manufacturerstake a variety of forms, ranging from free practice management servicesto all-expense-paid trips and sham consulting agreements. To illustratethese arrangements, I will summarize several settlements with devicecompanies and a recent conviction of a physician.

New Jersey Investigation of Hip and Knee Device Manufacturers (2007)– Zimmer, Inc., DePuy Orthopaedics, Inc., Biomet, Inc., Smith &Nephew, Inc.

In September 2007, four major medical device manufacturers enteredinto civil settlement agreements with the Government collectively total-ing $311 million to resolve allegations under the False Claims Act. TheGovernment alleged that the four companies provided financial incen-tives in the form of consulting agreements, lavish trips, and other perksto induce physicians to use a particular company’s artificial hip and kneereconstruction and replacement products.

The investigation found that, although many payments were providedfor legitimate services, in certain consulting arrangements the companiesderived little value beyond the acquisition of increased sales of artificialhip and knee implants used by the consulting surgeons. The companies


4 http://oig.hhs.gov/fraud/docs/alertsandbulletins/GuidanceMedicalDevice%20(2).pdf.




DDOOJJ UUPPDDAATTEE

also failed to oversee and audit the work performed by the surgeons underthe consulting agreements. For example, the surgeons engaged in “work”activities that involved minimal or no actual work being performed, butcreated a billable event for the consultant, such as the following:

• Consulting agreements required the physicians to report periodi-cally the services that they provided to the company to support theconsulting fees. Some consulting agreements had only vaguerequirements for these reports. When the consulting agreementsdid include specific requirements, these reports often failed toinclude the required information or were drafted by sales represen-tatives rather than by the consultants.

• In addition to reports documenting services provided, some com-panies paid consultants a fee, typically $5,000, for each quarterlyreport that included information on market trends, activity in theoperating room, and product issues. However, these work reportstypically included only cursory descriptions and were often dupli-cated from quarter to quarter. Many of these quarterly reports wereof little or no value to the companies.

• The companies sponsored consultant panel meeting at resort loca-tions and reimbursed the physicians for travel expenses. Thesemeetings would only be held for a few hours each day and physi-cian consultants who presented at these meetings typically spokefor a minimal time period, sometimes for as few as 10 minutes.Although the remainder of the day was available for recreationalactivities paid for by the company, the consultants were compen-sated $5,000 for a full day of work.

• Consultants billed for training sessions that involved sales repre-sentatives observing the surgeon while in the operating room.Some of these training sessions were held for experienced salesrepresentatives who, as part of their jobs, had been servicing thesurgeons in their sales regions for some time. These sales represen-tatives were already required to be present in the operating roomwith the surgeons to assist them with the procedures. These train-ing sessions lasted for 1 to 2 hours, but the consultants billed foran 8- to 10- hour workday.

• Some companies entered into product development agreementswith consultant physicians, offering them royalty payments oncethe products were launched. These agreements provided for annu-al payments of hundreds of thousands or millions of dollars for upto 20 years. The design teams included up to 20 physicians, someof whom were added after the projects were more than halfwaycompleted. The companies often did not measure the contributionsof individual physicians and up to half the members of some teamsappeared to have performed little or no work.

The Government alleged that by offering illegal inducements, thecompanies violated the False Claims Act by causing hospitals to seek andobtain reimbursement from Medicare. As a part of the global resolutionin these cases, the four companies agreed to certain prospective reme-dies. To avoid criminal prosecution, the companies each entered into an18-month Deferred Prosecution Agreement (DPA) with the United StatesAttorney’s Office in New Jersey. Under the DPAs, the companies agreedto be subject to oversight by a Federal monitor appointed by the U.S.

Attorney, to disclose any other bad acts, and to post on their Web sitesthe names of company consultants, along with payments made to thoseconsultants. Separate from the DPAs, each of the companies also enteredinto a Corporate Integrity Agreement (CIA) with OIG in exchange forOIG releasing its exclusion authority. Each CIA requires the company toput in place compliance systems, be subject to monitoring by an inde-pendent review organization and OIG, and make periodic reports for a 5-year period.5

Medtronic, Inc. (2006)In another case, OIG worked with DOJ to investigate allegations that

Medtronic, Inc., a medical device manufacturer, paid kickbacks to physi-cians. The Government alleged that Medtronic offered kickbacks tospine surgeons to induce them to choose devices marketed by aMedtronic subsidiary specializing in spinal implant devices. The kick-backs took various forms, including consulting and royalty agreementsfor which little or no work was performed; trips for doctors, their spous-es, families, or girlfriends; consultant meetings held at lavish venues; andcompany-sponsored adult entertainment. In July 2006, Medtronic agreedto pay $40 million to settle the False Claims Act case and enter into a 5-year CIA.6

Advance Neuromodulation Systems, Inc. (2007)In July 2007, OIG entered into a kickback CMP settlement with

Advanced Neuromodulation Systems, Inc. (ANS), a device companyspecializing in spinal cord stimulation. OIG alleged that ANS engaged ina marketing program in which it paid a number of physicians $5,000 forevery five new patients tested with an ANS product. To resolve allega-tions that ANS paid kickbacks, ANS paid $2.95 million in a CMP settle-ment and entered into a 3-year CIA with OIG.

OIG alleged that ANS’s program did not provide any significant clin-ical value but rather served as a marketing tool to increase ANS’s sales.The program was developed by ANS’s Vice President of Sales andMarketing. The $5,000 “data collection fee” was not set through a fairmarket value analysis of the physicians’ time, and ANS’s clinicalresearch department did not use the data collected. In addition, OIGalleged that ANS’s sales and marketing personnel provided physicianswith sports tickets, trips for physicians and their families, dinners, andother gifts. For instance, the investigation found that ANS sponsored 3-day conferences at resort locations (Napa Valley, Alaska, ColoradoSprings) in which physicians were invited to participate in roundtablediscussions. The agendas for these conferences indicated that much ofthe time at these conferences was spent on recreational activities, includ-ing wine tasting, skiing, golfing, and canoeing. Further, in manyinstances, the physicians’ spouses and children were invited to these con-ferences and participate in recreational activities at the expense of ANS.

Dr. Patrick Chan (2008)Although criminal prosecutors have historically targeted their limited

resources on companies paying kickbacks, a physician who accepts akickback from a medical device manufacturer in return for using thecompany’s products can be as culpable as the device company that pro-vided the kickback. In January 2008, Dr. Patrick Chan, an Arkansas neu-rologist, paid a $1.5 million civil settlement and pled guilty to solicitingand accepting kickbacks from Blackstone Medical, a medical devicecompany that sells devices and implants used in back surgery. The kick-backs included gifts and payments for sham consulting agreements and


5 An additional company, Stryker Orthopaedics, Inc., entered into an 18-month Non-Prosecution Agreement (NPA) with DOJ. The NPA requires Stryker to implement all of the reforms imposedon the other companies under the DPAs. Stryker did not enter into any civil settlement with DOJ or OIG and has not been given any release from civil or administrative liability.6 Although the settlement agreement and CIA have been fully executed, they have not become effective because of ongoing litigation involving a qui tam relator.




DDOOJJ UUPPDDAATTEE

fake research studies. The investigation found that Dr. Chan stoppedusing one company’s products after it refused to pay him kickbacks.Soon thereafter, Dr. Chan signed a $25,000 consulting agreement withBlackstone and switched to using its products.

Mitigating the Ricks Inherent in Physician-Industry FinancialRelationships

As I have mentioned, physician-industry interactions can provide tan-gible benefits to patients and the advancement of medical science. Theseinteractions can also create conflicts of interest that, if not managedeffectively, can pose significant challenges to medical professionalismand undermine the integrity of the Nation’s health care system. Criminal,civil, and administrative enforcement is an important facet of an overallstrategy to discourage financial arrangements that distort physicians’professional judgment. However, it would be both inappropriate andimpractical to rely solely on Government enforcement to address anissue of this complexity. The health care industry, medical community,and the Government must develop and implement additional approachesto reduce the risks raised by these arrangements.

For this reason, OIG commits substantial resources to encourage thehealth care industry to adopt voluntary anti-fraud and compliance meas-ures. OIG promotes these efforts by providing a range of comprehensiveguidance, including advisory opinions, compliance program guidance,and special fraud alerts and bulletins. All of these resources are publiclyavailable on OIG’s Web site at www.oig.hhs.gov. OIG also engages inextensive industry outreach efforts, including providing speakers atmajor trade association, legal, and compliance conferences.

As reflected in the Government’s recent enforcement actions involvingthe medical device industry, the anti-kickback statute plays a central role inaddressing excesses in physician-industry relationships. Because the anti-kickback statute is a criminal, intent-based statute that requires a case-by-case analysis to determine whether the law has been violated, OIG’s abilityto issue general guidance about the statute is limited. The safe harbor regu-lations issued by OIG immunize certain conduct from prosecution and pro-vide guidance on relevant risk factors. In addition, OIG offers an advisoryopinion program under which parties can obtain OIG’s legal opinion aboutthe application of the anti-kickback statute and other OIG fraud and abuseauthorities to their existing or proposed business arrangements.

Further assistance is available from OIG in the form of complianceprogram guidance for various health care sectors. OIG’s ComplianceProgram Guidance for Pharmaceutical Manufacturers (CPG) (68 FR23731 (May 5, 2003)) provides detailed information that drug manufac-turers and medical device manufacturers can consider when establishingand operating an effective internal compliance program. The CPG iden-tifies fraud and abuse risk areas, including many of the risks associatedwith financial relationships between medical device manufacturers andphysicians. With respect to kickbacks, for example, the guidance discuss-es risks associated with manufacturers providing discounts, product sup-port services, educational grants, research funding, and certain consult-ing arrangements. Medical device companies and physicians can use thisguidance as a tool to help identify and manage the risks associated withtheir own arrangements.

Another strategy for promoting integrity in industry-physician finan-cial relationships is subjecting those relationships to reporting require-ments and greater transparency. For example, several states have recent-ly enacted laws that require pharmaceutical companies to report pay-ments made to physicians. Additionally, in the DPAs with the medicaldevice manufacturers, the United State Attorney for New Jersey has

required that the companies maintain on the Web sites the names of thephysicians to whom they make payments and the amounts paid. OIG isconsidering requiring similar disclosure requirements in future CIAswith device manufacturers and pharmaceutical companies.

Academic institutions are also taking steps to manage their relationshipswith the health care industry in response to the growing concern that finan-cial conflicts of interest are interfering with physicians’ professional judg-ment. Both the Association of American Medical Colleges and theAssociation of American Universities have promulgated recommendationsfor the protection of human subjects from the effects of conflicts of intereston the part of academic investigators and their universities. In the Journal ofthe American Medical Association, a group of physicians from many of theNation’s most prestigious academic medical centers has called for morestringent regulation of physician-industry relationships. Alarmed by theadverse impact that financial conflicts of interest have on patient welfareand research integrity, they have called for the elimination or modificationof common practices related to gifts, drug samples, continuing medical edu-cation, speakers bureaus, and consulting and research contracts.7

A number of academic medical centers and health systems also aretaking affirmative steps to address the conflicts of interest created byaccepting gifts from the pharmaceutical and medical device industries. Inaddition to barring gifts and free food, some medical centers are restrict-ing the distribution of drug samples and limiting sales representativeaccess to physicians. For example, just this month, the University ofPittsburgh Medical Center and Schools of the Health Sciencesannounced a policy that bars faculty, staff, and students from acceptingany gifts, regardless of value, from the pharmaceutical or medical deviceindustries. The policy also requires that any consulting arrangements bereviewed and approved in advance by the University. Additionally, theAmerican Medical Student Association has launched a campaign toencourage medical schools and academic medical centers to developpolicies that limit the access of pharmaceutical company representativesto their campuses and prohibit medical students and physicians fromaccepting gifts of any kind from these representatives.

ConclusionIn conclusion, financial relationships between the medical device

industry and physicians are pervasive and can create both benefits andrisks to patients and health care programs. Effectively managing the risksassociated with these financial relationships is a challenge that warrantsa comprehensive strategy by Government, the health care industry, andphysicians.

OIG will continue to work with DOJ and other partners to investigateand pursue cases against device manufacturers and physicians who vio-late fraud and abuse laws. At the same time, we will continue our out-reach to the medical device industry and physicians to increase aware-ness of the compliance risks and the resources available to assist them inmanaging those risks. OIG is also considering ways to promote increasedtransparency of financial relationships. Efforts by Congress, industry,physicians, and academia to promote awareness of the risks of conflictsof interest, increase the transparency of these financial relationships, andimplement appropriate policies to manage these risks would go a longway to safeguard patients and health care programs.

That concludes my statement. Thank you for the opportunity to testifytoday. I would be pleased to answer any questions that you may have.


5 Brennan TA, Rothman DJ, Blank L, et al. Health Industry Practices That Create Conflicts of Interest: A Policy Proposal for Academic Medical Centers. JAMA 2006;295:429-433.

Enquiry No 51


Enquiry No 17



In 2007, the U.S. market for bone graft materials (excluding structuralallograft) neared $1.9 billion. Included in this estimate are non-structur-al allograft, demineralized bone matrix (DBM), bone morphogeneticproteins (BMPs) and synthetics like hydroxylapatite (HA), calcium sul-fate and tricalcium phosphates (TCP). By our estimates, bone graft mate-rials were used in more than 1.4 million procedures related to revisionarthroplasty, spinal and other fusions, fracture repair, repair of malu-nion/nonunion and other defect filling applications.

Because they have application in a variety of orthopaedic subspecial-ties, bone graft materials have become part and parcel of the product

portfolios of more than 50 companies with FDA clearance, from biotech-oriented to broad-based orthopaedic and spine-focused entities. A num-ber of companies from Europe and the Far East also claim FDA clear-ance, although many have not yet moved into the U.S. market.

While not exhaustive, Exhibits 1 and 2 provide a list of many of thebone graft materials available in the U.S. Clearly, today’s orthopaedicsurgeon has more than his share of biological solutions to his patient’sbone void problems.

Exhibit 1, continued on page 51

FFIISSCCAALL FFIITTNNEESSSS

Bone Graft Materials inOrthopaedics: 50+ Companies Vie for a Piece of the $1.9BB Pie

Author: Shirley A. Engelhardt

Exhibit 1: Bone Graft Materials Available in the U.S.: Synthetics and BMPs

Company/Website Product and“Partnerships”

Available Configurations/

CompositionRegulatory Status Key

Differentiation References

Acumed

acumet.net

Callos Inject andCallos Impact;Manufactured bySkeletal Kinetics;distributed byAcumed.

Injectable through syringe;impactable by hand / After mixingthe powder and liquid componentsof the product, it will turn into a lowcrystalline HA, which is similar tothe mineral phase of human bone.

Indicated to be injected into bonyvoids or gaps in the skeletal system,i.e. extremities, spine, and pelvis.(BVF) These defects may besurgically created osseous defects orosseous defects from traumatic injuryto bone.

Increased tensile strength, increasedflexural strength and increased fracturetoughness (first cement to be drilled andscrewed). Easy to mix and deliver. Setsin a wet environment and quickly in 5minutes at 37C. Cellular remodelingallows cement not to leave any gaps orvoids as new bone forms in and aroundthe implanted area in vivo.

1) Yetkinler DN et al. In Vitro andIn Vivo Evaluation of Two CalciumPhosphate Cements. OrthopaedicResearch Society TransactionsVol. 29, San Francisco, California2004. 2) Lin J et al. IncreasedFracture Toughness ImprovesClinical Utility of a Novel CalciumPhosphate Cement. OrthopaedicResearch Society TransactionsVol. 31, 2006.

Angstrom

angstrommedical.com

NanOss;Acquired byPioneer Surgical.

Pellets / Calcium phosphate BVF (extremities, spine and pelvis) First material that duplicates the micro-structure, composition and performanceof human bone; proprietary nanocrystallinetechnology being developed into structural,weight bearing medical devices and inject-able, endothermic, weight bearing bonecements

Apatech

apatech.com

Actifuse 2-5mm granules, 1-2mmmicrogranules, moldable (ABX) /Silicated calcium phosphate

BVF + 1st synthetic bone graftsubstitute with specific approval ininstrumented PLF

Silication results in a product that canproduce more bone in less time (seeHing). Resorption is NOT at a fixed rate.Fusion equivalent to autograft (PLFmodel) (Wheeler)

1) Hing et al. The Spine Journal7(4): 475-490, 2007.2) Wheeler et al. The Spine Journal7(3): 308-17, 2007.





Exhibit 1, continued from page 50





A-Spine

aspine.com

Osteo-G Pellets, kit (for producing paste) /Calcium sulfate dihydrate

BVF (extremities, spine and pelvis)

Bi-Ostetic Granules, blocks, cylinders /60% HA, 40% TCP

BVF

Bi-Ostetic Foam Strips, sheets / 60% HA, 40% TCP+ highly purified fibrillar Type Ibovine collagen

BVF

Cem-Ostetic Putty, injection kit, granules, blocks,cylinders / Calcium-based bio-compatible calcium salts

BVF

GenerOs Granules / ß-TCP BVF

Biocomposites

biocomposites.com

Genex Setting paste (putty soon to beavailable) / ß-TCP, synthetic highpurity CaSO4

BVF (long bones, extremities, spineand pelvis); putty awaiting clearance

ZPC Negative Surface charge promotescellular cascade of protein and cellattachment; patented compositionstimulates dendochondral ossificationvia cartilage.

1) Hunt JA and Cooper JJ. TheSignificance of Zeta Potential inOsteogenesis. Poster presentation,Society for Biomaterials 2006 AnnualMeeting, April 2006. 2) KarladaniAH. Limitations of Autograft andAllograft: New Synthetic Solutions.Presented at the Iranian MedicalSociety Meeting, March 17, 2007.

Stimulan Preformed pellets, percutaneousdispenser, injectable paste /Synthetic high purity CaSO4

Indicated to fill a bone void or defectcreated by surgery, a cyst, a tumour,osteomyelitis or other traumatic injury

Consistent and reproducible clinicalresults; unrivalled purity and consistency;rate of resorption corresponds with rateof new bone growth

1) Bajada S et al. Successfultreatment of refractory tibialnonunion using calcium sulphateand bone marrow stromal cellimplantation. JBJS Br 89-B(10):1032-1038, 2007. 2) Hopgood Pet al. Ankle arthrodesis for failedtotal ankle replacement. JBJS Br88-B(8): 1032-1038, 2006.

Allogran-R Irregular shaped granules / ß-TCP Indicated to fill a bone void or defectcreated by surgery, a cyst, a tumour,osteomyelitis or other traumatic injury

Engineered porosity for completeresorption

1) Hopgood P et al. Ankle arthro-desis for failed total anklereplacement. JBJS Br 88-B(8):1032-1038, 2006.

Allogran-N Irregular shaped granules / HA Indicated for use as a bone void filleror bone void substitute for bony voidsor gaps that are not intrinsic to thestability of the bony structure

Optimized porosity for early cellattachment and proliferation; controlledparticle size for prosthesis stability; slowlyresorbing calcium matrix for long termbony incorporation

1) Aulakh TS et al. Synthetic BoneSubstitute: A Long Term Follow-up inthe Context of Survival and FunctionalOutcome. Paper No. 365, 54th AnnualMeeting of the Orthopaedic Society,2008. 2) Oakley J and Kuiper JH.Factors affecting the cohesion ofimpaction bone graft. JBJS Br 88(6):828-31, 2006.

Berkeley AdvancedBiomaterials

hydroxyapatite.com


hydroxyapatite.com

Biocomposites

biocomposites.com

Biocomposites

biocomposites.com

Biocomposites

biocomposites.com


hydroxyapatite.com


hydroxyapatite.com









Biomatlante

biomatlante.com

MBCP Granules, blocks, gel / 60% HA/40% BVF (extremities, spine and pelvis); alsoBVF in femoral or tibial osteotomies

Developed biphasic ceramics 20 years ago.Macroporous structure allows for control ofresorption and osseous substitution;microporosity allows the diffusion ofbiological fluids. Saturation of ions leads tocrystalline precipitation with apatite crystalsidentical to those of the natural bone.

Tribone 80 Granules, sticks, blocks / 20% HA/ BVF (extremities, spine and pelvis)

Biomet

biomet.com

OsseoFit PorousTissue Matrix;Manufactured byKensey Nash.

(tricalcium phosphate) suspended

bovine collagen

BVF (extremities and pelvis)porosity, allowing for rapid hydration withbiologically beneficial fluids and immediatecell infiltration, while creating a stableosteoconductive platform of suspended

BoneSupport

bonesupport.com

CERAMENT™|BONEVOID FILLER mixing to paste for injection or

hemihydrate and 40%hydroxyapatite

BVF (extremities, spine, and pelvis) Bioactivity, injectability, penetrability and

Calcitec

calcitecinc.com

Osteofixphosphate, sodium phosphate,deionized water and calcium oxide

BVF

Curasan

curasan.com

Cerasorb BVF (extremities, spine, and pelvis)

DePuy Spine

depuyacromed.com

HEALOS Bone GraftReplacement

Variety of strip sizes ranging frombone marrow aspirate intended for usein filling bony voids or gaps in theskeletal system that are not intrinsicto the stability of the bony structure

so quickly remodeled into new bone (claimsthat other synthetic matrices mimic the

to break down the matrix before it can be

reviewed and published human clinical data

as with other matrices)

et al. Neurosurgery,et al.

The Spine Journal, July 2006

Conduit; Distributed by BVFvs. the higher percentage in competitive

structurally sound and hard to crush.

Gupta et al. Efficacy of Mesenchymal

Spine,Etex Corporation

etexcorp.com

Alpha-bsmlike consistency at room temperature;can be either injected or molded andpacked into the defect; hardens andsets within 20 minutes of implantation /

formulation

BVF (extremities, spine, and pelvis) Studied in a prospective, randomized trial vsiliac crest bone graft in tibial plateau defects.

working time (up to 60 minutes) and flexibilityof either injecting or molding and packing intothe defect. Sets isothermically, with no heatrelease that can affect surrounding tissue, in

mimics the mineral content of human bone(ensures predictable remodeling inconjunction with bony ingrowth).

et al.

Bovill Award. Accepted for publication,JBJS et al. A

publication, 2008.Beta-bsm

like consistency at room temperature;can be injected into the defect;

calcium phosphate formulation

BVF (extremities, spine, and pelvis) Formulated with the same chemistry as

needle and set hard in a wet environment

addition, the syringe to syringe mixing systemallows for simple mixing and delivery.

Gamma-bsm

erature; can be molded and packedinto the defect; hardens and sets

formulation

BVF (extremities, spine, and pelvis) Formulated with the same chemistry as

that is simple to mix, has unique moldability,and sets hard in a wet environment (with

Biomatlantebiomatlante.com

DePuy Spine

depuyacromed.com

Etex Corporation

etexcorp.com

Etex Corporation

etexcorp.com










Exactech

exac.com

OpteMx;Manufactured byBiomatlante Sarl.

Granules, sticks, rounded wedges,wedges, cylinders / 60% HA 40%TCP synthetic conductive lattice

BVF (extremities, spine and pelvis) This chemical and osteoconductivestructural combination mimics cancellousbone in porosity and compressive strength.70% porosity with micro and macro poresfacilitates fluid absorption and promotes adeep invasion of steogenic cells byosteoconduction.

1) Daculsi G. Biphasic calciumphosphate concept applied to artificialbone, implant coating and injectablebone substitute. Biomaterials 19:1473-8, 1998. 2) Daculsi G, et al.Current state of the art of biphasiccalcium phosphate bioceramics. JMater Sci Mater Med 14:195-200, 2003.

Geistlich Pharma

geistlich.com

Orthoss Blocks, granules / >95% HA BVF High interconnecting porosity, similarity tohuman bone, 20 years of clinical experience

1) Orr TE et al. Compressive propertiesof cancellous bone defects in a rabbitmodel treated with particles of naturalbone mineral and synthetic hydroxy-apatite. Biomaterials22(14): 1953-9,2001. 2) Pauli C et al. Bovine apatite:its value as a bone substitute.Osteologie aktuell VII, Hrsg.: H.J.Pesch, H. Stöss, B. Kummer, SpringerVerlag, pp: 288-291, 1993.

Globus Medical

globusmedical.com

MicroFuse Blocks with graft slots, granules,sheets / Fused Poly (Lactide-co-glycolide) and Poly (Lactic acid)microspheres

BVF 100% interconnected porosity, much strongerthan standard porous ceramics, not brittle,will not crush when placed at the bone defectsite, narrow pore size distribution (optimal forbone formation). Believed to be 1st resorbableimplant with two polymers with differentresorption profiles - resorption in 2 steps - withresorption of 1st phase, porosity increasesand creates space for additional bone growth.

Graftys

graftys.com

Graftys BCP Granules, sticks, cylinders, wedges, BVF (extremities, spine and pelvis); alsoBVF in femoral or tibial osteotomies

Controlled resorption, 70% porosity for rapidbone ingrowth, rapid bone cell colonizationat center of material (rapid bone ingrowth),stable and easy to use

Integra LifeSciences

integra-ls.com

Mozaik OsteoconductiveScaffold

Compression resistant strip andmoldable putty / 80% high purityß-TCP, 20% high purity Type Icollagen

BVF (extremities, spine and pelvis),combined with bone marrow aspirate.Putty also indicated for use in thetreatment of surgically treated osseousdefects or osseous defects created fromtraumatic injury to the bone.

Collagen surface of interconnected poresprovides binding sites for osteoinductiveagents. The same collagen has been usedin over 10 million procedures and has astrong history of safety and biocompatibility.TCP provides defect filling volume and localmineral content. Product designed to resorbat a rate consistent with the formation of newbone. Available as a compression resistantstrip and moldable putty.

Ingram R et al. Use of Integra Mozaikas a Bone Graft Substitute in a RabbitRadius Segmental Defect. Data on file.Integra LifeSciences Corporation,Plainsboro, NJ. 2006.

ISTO Technologies

istotech.com

InQu 10cc and 30cc granules, 10cc pastemix / Hyaluronic acid + poly(lactide-co-glycolide)

BVF (extremities and pelvis)

Kasios

kasios.com

Kasios TCP Granules, blocks, rods, wedges / BVF Highly bioactive; total or partial resorption;macroporosity allows excellent osteo-integration of granules

LDR Spine

ldrspine.com

Bf+ 2-3 mm irregular-shape porousgranules; blocks, cylinders, wedges,tapers / 100% TCP

BVF (extremities, spine, and pelvis)

MedArtis

medartis.com

Synthacer Blocks, cylinders, morsels, balls /Calcium phosphate ceramic with atleast 95% HA


Syntricer Blocks, cylinders, morsels, balls /Calcium phosphate ceramic with at


Medical Biomat

medicalgroup.fr

Atlantik BVF (extremities and pelvis) Optimized porosity and surface to induce fastbone ingrowth and good osteointegration;interconnection of porosities for cellpenetration and increased contact withbiological fluids

Medicrea

medicrea.com

Osmosys BVF (extremities, spine and pelvis) Excellent interconnected porosity compatiblewith human bone-cell size + allows thepenetration of the fluids and the nutriments;excellent integration in both cortical andcancellous bone; new bone formation goesfrom surface to center of graft; macroporesentirely filled by the bone

MedArtis

medartis.com










Medtronic

infusebonegraft.com

INFUSE Bone Graft Vial / Recombinant human BoneMorphogenetic Protein-2 with anAbsorbable Collagen Sponge(rhBMP-2/ACS)

PMA approved for spinal fusionprocedures in skeletally mature patientswith degenerative disc disease at onelevel from L4-S1; should have had at leastsix months of nonoperative treatment.Also indicated for treating acute, opentibia shaft fractures that have beenstabilized with IM nail fixation afterappropriate wound management.

Only bone graft substitute that providesproven and predictable bone growth and isbacked by years of study and data.

Medtronic

sofamordanek.com

Mastergraft Granules, putty / 15% HA, 85% ß-TCP BVF (posterolateral spine, pelvis, iliumand/or extremities); putty also as a bonegraft extender (with autograft)

Made up of 15% HA and 85% ß-TCP whichprovides 1) long term stability (not often foundin comparable bone void fillers) and 2) aconsistent resorption rate. This consistentchemical and structural composition allowsfor a more predictable resorption rate.

Merries K-Phate Blocks, wedges, granules / 60% HA/ BVF (extremities, spine and pelvis)

Uni-Osteo Calcium sulfate CaSO4 BVFMeta Biomed

meta-biomed.com

BoneMedik andBoneMedik-S

Chips, blocks / Trabecular HA w/ orw/o 1% silicon

BVF (extremities and pelvis) Similar composition to mineral content ofbone + macro/micro pores very similar to 3Dstructure of cancellous bone

NovaBone

novabone.com

NovaBone;Distributed worldwide byMTF.

Putty, macroporous block / Syntheticcalcium phospho-silicate (Bioglass)particulate

BVF (extremities and pelvis); also clearedfor use of the term "osteostimulation"

Actively stimulates osteoblast proliferationand differentiation as evidenced during invitro studies by increased levels of DNAsynthesis and osteoblast markers. Supportshigher level of osteoblast expression andactivity. Bone growth observed throughoutgraft site, working outward from eachindividual particle, not just inward from host-bone margins.

1) Loty C et al. Bioactive glassstimulates in vitro osteoblastdifferentiation and creates a favorabletemplate for bone tissue formation.J Bone Miner Res 16(2): 231-9, 2001.2) Xynos ID et al. Bioglass 45S5stimulates osteoblast turnover andenhances bone formation In vitro:implications and applications for bonetissue engineering. Calcif Tissue Int 67(4): 321-9, 2000.

Nuvasive

nuvasive.com

Formagraft Purified fibrillar collagen + HA/ß-TCPceramic

BVF

Olympus

biomaterial.co.jp

Osferion Blocks, cylinders, granules, wedges / BVF (extremities, spine and pelvis)

Orthogem

orthogem.com

Tripore HA, Tripore BP90and Tripore BP15

Blocks, granules / HA (100% HA),BP90 (90% HA/10% TCP), BP15 15%HA/85% TCP

BVF (extremities, spine and pelvis) Proprietary process that maintains a highdegree of control over macroporous andmicroporous architecture; forms environmentparticularly favorable to rapid osteocyteingrowth; results in high quality, organizedand well vascularized bone.

Orthos

orthos.com

BVF (long bones, extremities, spine andpelvis)

Orthovita

orthovita.com

VITOSS Morsels Pack (putty), strips, flow (extrudable)blocks, morsels, canisters (filledcartridge), shapes / 100% ß-TCP

BVF (spine, extremities and pelvis) A robust human clinical data package (pro-spective clinical studies showing equivalenceto autograft). Optimized structure, porosity,and chemistry - 90% porous, open and inter-connected structure that guides the three-dimensional regeneration of bone, nano-sizedparticle building blocks enable cell-mediatedresorption as part of natural remodeling.

1) McConnell JR and Mitchel C. A com-parison of -TCP+BMA vs. RhBMP-2 inanterior lumbar interbody fusion: A pro-spective, randomized trial with 1-yearinterim clinical and radio-graphic out-comes. 24th Annual Meeting of theAANS/CNS Section on Disorders of theSpine and Peripheral Nerves, 2008.

VITOSS Foam;Manufactured byKensey Nash.

Pack (putty), strips, flow (extrudable)blocks, morsels, canisters (filledcartridge), shapes / 80% ß-TCP, 20%Type I bovine collagen

BVF (spine, extremities and pelvis) Same as for Vitoss Morsels. Epstein NE. An analysis of noninstru-mented posterolateral lumbar fusionsperformed in predominantly geriatricpatients using lamina autograft andbeta tricalcium phosphate. The SpineJournal, 2008.

VITOSS Bioactive Foam;Manufactured byKensey Nash.

Pack (putty), strips, flow (extrudable)blocks, morsels, canisters (filledcartridge), shapes / 70% ß-TCP,10% Bioactive Glass, 20% Type Ibovine collagen

BVF (spine, extremities and pelvis) Same as for Vitoss Morsels. Same as for Vitoss Foam.

Ossacur

ossacur.de

Collos E Granules / Equine Type 1 collagen BVF (extremities, spine and pelvis) Regenerative and osteoconductive support,no risk of transmission of human pathogengerms, early ossification, easy to use

1) Huffer WE et al. Repair of sheep longbone cortical defects with Colloss, CollossE, Ossaplast Ortho, and illiac crest auto-graft, ORS Abstract 890, 2006. 2) Baas JColloss E with Ossaplast artificial bonegraft is comparable to allo-graft in termsof implant fixation, ORS Abstract 1743, 2006.

Merries

Orthovita

orthovita.com

Orthovita

orthovita.com










Ossacur

ossacur.de

Ossaplast BVF (extremities, spine and pelvis) ~20% less material required; less to be

speeded up

OsteoMed

osteomedcorp.com

OsteoVation EX Inject;

OsteoMed in

BVF (spine, extremities and pelvis)

in vivo.

et al. In Vitro and InVivo

2) Lin J et al.

Osteotech

osteotech.com

PLEXUR P BoneVoid Filler

Plexur M BoneVoid Filler

BVF (extremities and pelvis)

Pentax

pentax.co.jp

Apaceram HA BVF (extremities, spine and pelvis)

Promed AdvanceTechnology

Osteo-Link BVF (extremities, spine and pelvis)

Science forBiomaterials

s-b-m.fr

Bio 1, Bio 1-S, Bio 1-Kit BVF (extremities, spine and pelvis) 1) Bonnevialle P et al

Revue de chirurgieorthopédique2) Galois L et al.

International Orthopaedics

SpineCraft

spinecraft.com

OsteoPore TCP BVF

Stryker

stryker.com

HydroSet BVF (extremities, spine, ilium and/orpelvis)

J. Res. Natl. Stand. Technoloet al.

J Trauma

Stryker Biotech

op1.com

OP-1

(implant)Synthes

synthes.com

Norian SRS BVF (extremities and pelvis)

ChronOs Composite

Osteotech

osteotech.com

Synthes

synthes.com











Teknimed

teknimed.com

Cementek Liquid + powder injectable / TCP BVF (extremities, spine and pelvis)

TriHA+ Granules, sticks / TCP BVF

Ceraform Wedges, powders, granules, sticks, BVF (extremities, spine and pelvis)

TriMed

trimedortho.com

Cross.Bone Blocks, powders, syringe / 60% HA/ Block, bottle and syringe for bonereconstructive surgery or as a bonefiller (fractures or benign tumors/cysts);wedge for tibial osteotomy with internalfixation

Wright Medical

wmt.com

Pro-Dense Injectable paste/putty / 75% CaSO4+ 25% CaPO4 (brushite and TCP)

BVF w/ expanded claims for bonegraft substitute and superiority claimsvs. autograft in canine model; alsoclearance in core decompressionsfor avascular necrosis

Predictable bone regeneration...Nothingelse like it...not simply a physical mixtureof CaSO4 and CaPO4. The new boneregeneration is beyond anything we haveseen. FDA has recognized as well in ourcanine model.

Urban et al. Increased BoneFormation Using a Calcium Sulfateand Calcium Phosphate CompositeGraft. Clin Orthop2007.

Osteoset Pellets, customizable mix kits /CaSO4

BVF First CaSO4 bone graft...ability tocustomize the mix kits intraoperatively

1) Alexander. Efficacy of CalciumSulfate Plus Decompression Bonein Lumbar and Lumbosacral SpinalFusion: Preliminary Results in 40Patients CJS2) Borrelli et al.Treatment ofNonunions and Osseous Defectswith Bone Graft and Calcium Sulfate.Clin Orthop

MIIG Injectable paste / CaSO4 BVF Injectable, setting paste that resorbs (vs.injectable CaPO4 that must be remodeled)

1) Panchbhavi VK.Augmentation ofInternal Fixation of OsteoporoticAnkle Fracture Using InjectableBone Substitute. Techniques in Foot& Ankle Surgery2) Watson. The Use of an InjectableBone Graft Substitute in TibialMetaphyseal Fractures.Orthopedics

Cellplex Granular porous TCP in the InfiltrateTube (designed to be infused with bonemarrow aspirate) / TCP

BVF Higher compressive strength for better packing 1) Fredericks et al. CellularInteractions and Bone HealingResponses to a Novel PorousTricalcium Phosphate Bone GraftMaterial. Orthopedics 27(1):

Zimmer

zimmer.com

CopiOs® Bone Void Filler;Manufactured byKensey Nash.

Sponge, paste \ Dibasic calciumphosphate (67%) and Type I collagen(33%)

BVF (extremities, pelvis and spine) Provides local supply of calcium andphosphate ions; provides acidic localizedmicroenvironment which may preserveBMP solubility; available as a highlyporous sponge (93% porous, pores

radiolucent; pliant and moldable whenhydrated

Case reports and animal studies

Wright Medical

wmt.com

Wright Medical

wmt.com

Wright Medical

wmt.com

Teknimed

teknimed.com

Teknimed

teknimed.com



FFIISSCCAALL FFIITTNNEESSSScontinued from page 57

Exhibit 2: Bone Graft Materials Available in the U.S.: DBM, Stem Cells and Xenograft




Differentiation

For DBMs, what% of lots are testedfor osteoinductive

potential?

Aesculap Spine

aesculapusa.com

Putty, gel / Demin-eralized bone matrix (DBM) with reverse phase medium (RPM)

Bone graft extender (extremities, spine and pelvis) and BVF (extremities and pelvis)

ProSpace DBM

For DBMs,what type of

sterilization /processing is used? *

References

Sample of each lot tested post sterilization in quantitative in vitroassay

E-Beam sterilization

AlloSource

allosource.org

Allofuse;Manufactured by IsoTis. However, due to changes in the licensing agreement, AlloSource will begin manufacturing it.

Putties, gels / 38% DBM with RPM

BVF; contains Human Cellular and Tissue Based Product (HCT/P) as defined in USFDA 21 CFR Part 1271. Restricted to homologous use for the repair, replacement or reconstruction of musculoskeletal defects.

High DBM content. Reverse phase carrier has excellent handling properties - becomes stiffer when implanted, resistant to irrigation, and is not water soluble. Packaged sterile, incorporates the Sterile-R process, and is sterile according to USP standards.

Every lot tested for osteoinduction.

Allofuse Plus; Manufactured by IsoTis. However, due to changes in the licensing agreement, AlloSource will begin manufacturing it.

AlloSource

allosource.org

Putties, gels / 38% DBM with RPM + cancellous chips

BVF; contains Human Cellular and Tissue Based Product (HCT/P) as defined in USFDA21 CFR Part 1271. Restricted to homologous use for the repair, replacement or reconstruction of musculoskeletal defects.

Same as for Allofuse. Every lot tested for osteoinduction.

Osteocel; To be manufactured by AlloSource per an agreement with Osiris. Private labeled as Trinity. (See Orthofix.)

AlloSource

allosource.org

Formulation ofcryopreserved cancellouschips, viable cancellousmatrix and ground bonematrix / Adult cadavericstem cells with cancellouschips

HCT/P Every lot tested for cellviability, quantity andquality.

Altiva DBM;Manufacturedby RTI Biologics.

Lyophilized roomtemperature powder /DBM w/ and w/o corticalcancellous chips ingelatin carrier

BVF All lots tested for qualityand safety.

Terminally sterilizedAltiva

altivacorp.com

Bacterin

bacterin.com

OsteoSponge;Distributed by Innovasis,OrthoPro

Blocks, filler /100% human bone

HCT/P

OsteoWrapBacterin

bacterin.com

Thin sheath of corticalbone; can be rolled up,wrapped around or easilycut with a scalpel /100% human bone

HCT/P

DBM Putty, sponge, foam,sheets / DBM

BVFBerkeley AdvancedBiomaterials

hydroxyapatite.com

Biomet Biologics

biometbiologics.com

Bonus 1, 5 and 10cc /100% human tissueallograft by weight andvolume

100% human tissue that isminimally manipulated.Regulated as a HCT/P.

Free of synthetic carrier,making it ideal for mixingwith various carrier fluidssuch as bone marrowaspirate or platelet richplasma. A vacuumsystem is used to ensureoptimal mixing of theDBM and fluid. Thehandling properties of theproduct can bemanipulated via varyingthe amount of fluid usedto hydrate the product.

Does not currentlyconduct osteoinductivetesting on lots of Bonus.

End stage irradiation at15-25 kGy with productpacked in dry ice topreserve BMP activity.Also beforedemineralization, tissueprocessed withAllowash®, a patentedbone and soft tissuecleaning technologyunder license fromLifeNet.

Work is in progress todescribe/evaluate theuse of Bonus in graftingafter core decompressionfor femoral headavascular necrosis andfor grafting in bonecysts in a pediatricpopulation. Currentlythere are no peer-reviewed referencesdescribing the use ofBonus.










Differentiation


potential?



References

DePuy Spine

depuyacromed.com

OPTIUM DBM;Manufactured by LifeNetHealth; distributed byDePuy Orthopaedics andDePuy Spine.

Putty (1, 2.5, 5, and 10cc)and gel (1, 5, 10cc) /DBM in a glycerol carrier

BVF LifeNet Health, largesttissue bank in the U.S. andthe first one accredited byAATB. (See www.lifenet.org .)Processes donors throughtwo patented procedures -Allowash, which removes99% of bone marrow andblood elements, 4X morethan through traditionalmethods; and PAD (PulsedAcid Wash Demineralization),which controls residualcalcium level for moreconsistent product + greaterosteoinductivity + optimallevels exceed AATB standard.

A representative sample ofeach lot of finished productis screened for osteoinductivepotential in an athymicrodent assay and found tobe osteoinductive.(Osteoinductivity index (OI)score of greater or equal toone OI units on theEdwards scale or the ATSMGuidance document forassessment of new boneformation.)

LifeNet Health uses acontrolled low dose gammairradiation, performed underlow temperatures andmeeting requirements forsterilization (i.e. SAL 10-6)per AAMI and ISO standards.Sterilization technique hasbeen validated not to damagethe product's mechanicaland biological properties.

1) Zhang M et al. Effect(s)of the demineralizationprocess on theosteoinductivity ofdemineralized bone matrix.J Periodontol 68:1085-1092, 1997. 2) Turonis JWet al. The affects ofresidual calcium indecalcified freeze-driedbone allograft in acritical-sized defect inthe Rattus norvegicuscalvarium. J Oral Implantol32(2):55-62, 2006.

I/C Graft Chamber;Manufactured by LifeNetHealth; distributed by DePuyOrthopaedics and DePuySpine.

DePuy Spine

depuyacromed.com

5cc, 10cc, and 15ccconfigurations / DBM particlesand cancellous chips - 3 to 5ratio of DBM to Cancellous.(Ex. 10cc Chamber contains10cc of cancellous and 6ccof DBM )


Same as for Optium. Same as for Optium. Same as for Optium. Same as for Optium.

Cellect Allograft Cartridge;Manufactured by LifeNetHealth; distributed by DePuyOrthopaedics and DePuySpine.

DePuy Spine

depuyacromed.com

25cc / DBM fibers andcancellous chips. (Eachchamber contains 10cc ofcancellous and 15cc of DBMFibers)


Same as for Optium. Same as for Optium. Same as for Optium. Same as for Optium.

Etex Corporation

etexcorp.com

EquivaBone Powder + sterile saline -forms a putty-like consistencyat room temperature; will flowor can be molded and packedinto the defect; hardens andsets within 10 minutes ofimplantation / DBM powder +proprietary pure syntheticself-setting Nano-CrystallineCalcium Phosphate

BVF (extremities and pelvis);510(k) application pending foruse as BVF in spine

Osteoconductive,osteoinductive. Flows, ismoldable and sets hard in awet environment. Setsisothermically, with no heatrelease that can affect sur-rounding tissue, in a wetenvironment. Containsproprietary nanocrystallineCalcium Phosphate whichmimics the mineral contentof human bone. This ensurespredictable remodeling inconjunction with bony ingrowth.

Each lot of DBM processedaseptically and then terminallysterilized by gamma irradiation.It is tested for osteoinductivepotential POST-STERILIZA-TION.

Each lot of DBM processedaseptically and thenterminally sterilized bygamma irradiation. It istested for osteoinductivepotential POST-STERILIZ-ATION.

Rosenberg AD et al.Osteoinductive compositesof calcium phosphatecement and demineralizedbone matrix. OrthopaedicResearch Society, 2007.

Exactech

exac.com

Optecure Lyophilized RoomTemperature Powder kit 1cc,5cc, 10cc / 81% by WeightDBM in a hydrogel carrier

BVF (extremities and pelvis);bone graft extender(extremities, spine and pelvis)

1. Very resistant to lavage.2. Remains formable. 3. Drystorage maintains bioactivityof the bone forming proteinsand allows surgeon to hydratewith autologous diluents. 4.Every donor tested in vivofor actual bone formingcapability. 5. Published DBMconcentration studies fordesign rational.

100% in vivo. Every donor istested using the Urist athymicnude rodent model. Explantsare evaluated through histoand scored for actual bonecontent. Donors must meetminimum criteria foracceptance.

Aseptic Processing 1) Keisha K et al.OptecureR DBM+localbone: One-year follow-upof 73 two-level ACDFprocedures. 2) Lin HC et al.Two-level PLIFs usingOptecure DBM: one-yearfollow-up in 50 patients.

Optecure + cccExactech

exac.com

Lyophilized RoomTemperature Powder kit 1cc,5cc, 10cc / 88% total bonecontent: 81% by weight DBM,corticocancellous chips,hydrogel carrier

BVF (extremities and pelvis);bone graft extender(extremities, spine and pelvis)

1. Very resistant to lavage.2. Remains formable. 3. Drystorage maintains bioactivity ofthe bone forming proteins andallows surgeon to hydrate withautologous diluents. 4. Cond-uctive lattice of cortical andcancellous chips addressesmechanical prompt to boneformation. Cortical bone pro-vides for compressible strengthand cancellous bone providesa porous environment for cellattachment. 5. Every donortested in vivo for actual boneforming capability.

Same as for Optecure. Currently launching thisnew product. Notavailable long enough tohave clinical articles.

Same as for Optecure.








Differentiation


potential?



References

Exactech

exac.com

Opteform;Manufacturedby RTI Biologics.

Lyophilized RoomTemperature Powder2cc, 5cc, 10cc, 20cc;Frozen Discs 1cc,2.1cc, 8cc, 14.7cc,21.2cc, 30cc / 60% byweight DBM, denselypacked corticalcancellous chipsin a collagen carrier

BVF (extremities, spineand pelvis)

1. Very resistant to lavage.2. Becomes resilient atbody temperature. 3. Drystorage maintains bioactivityof the bone forming proteinsand allows surgeon tohydrate with autologousdiluents. 4. Conductivelattice of cortical andcancellous bone addressesthe mechanical prompt tobone formation. Corticalbone provides forcompressible strength andcancellous bone providesa porous environment forcell attachment.

1) Philips GA, et al.Efficacy of CompositeAllograft andDemineralized BoneMatrix (DBM) Graft in theTreatment of TibialPlateau Fractures withBone Loss. Presented atWOA 2007. 2) Roukis T.Use of an Osteocon-ductive/OsteoinductiveBone Allograft for Revisionof Hindfoot and/or AnkleAtrophic Non-union/Mal-union Deformities in theHigh-risk Patient.Presented at ACFAS 2005.

100% in vivo. Every donoris tested using the Uristathymic nude rodent model.Explants are evaluatedthrough histo and scored foractual bone content. Donorsmust meet minimum criteriafor acceptance.

Terminally Sterilized

Optefil;Manufactured byRTI Biologics.

Exactech

exac.com

Lyophilized RoomTemperature Powder 1cc,5cc, 10cc / 60% by weightDBM in a collagen carrier

BVF (extremities, spine andpelvis)

1. Very resistant to lavage.2. Becomes resilient at bodytemperature 3. Dry storagemaintains bioactivity of thebone forming proteins andallows surgeon to hydratewith autologous diluents.

Same as for Opteform. Same as for Opteform. Wironen, JF et al. Effectof bone protein andcarrier matrices on BMP-stimulated osteogenesis.The 44th Annual MeetingTransaction of OrthopaedicResearch Society.

Integra LifeSciences

integra-ls.com

Accell 100 Putty / DBM BVF (extremities and pelvis);bone graft extender spine,extremities and pelvis

Osteoconductive,osteoinductive potentialand bioresorbable

100% E-Beam sterilization

Accell TBMIntegra LifeSciences

integra-ls.com

Preformed scaffold/matrix / PreformedTotal Bone Matrixmade from DBM

BVF (extremities andpelvis); bone graftextender spine,extremities and pelvis



Same as for Accell 100.

Accell ConnexusIntegra LifeSciences

integra-ls.com

Putty / DBM in RPM BVF (extremities andpelvis); bone graftextender spine,extremities and pelvis


Same as for Accell 100. Same as for Accell 100.

AlloCraft DBM; DBMprocessed by LifeLinkTissue Bank. AcellularDermal Matrixprocessed by LifeCellCorporation. Productdistributed by StrykerSpine.

LifeCell

lifecell.com

Putty / 100% humantissue comprising 80%DBM (by volume) and20% human acellularregenerative matrix

BVF The carrier, an acellularhuman tissue matrix,supports rapid cellularrepopulation andrevascularization whichalong with the DBMyields new boneformation more rapidlythan autologous bone

100% of lots are testedfor osteoinductivepotential in an in vivoanimal model by a GLPlaboratory.

Passes sterility testingas defined by USP71.

1) Qui QQ et al.BoneFormation in CalvarialDefects by DBM/AMComposite. Journal ofBiomedical MaterialResearch 81B:516-523, 2007. 2) QuiQQ et al. Evaluation ofAlloCraft-DBM Puttyas a Graft Substitutefor Spinal Fusion.Journal of BiomedicalMaterial Research,82B: 239-245, 2007.

Medtronic

sofamordanek.com

Osteofil Allograft Paste;Processed byRTI Biologics.

Allograft paste; available infrozen and room tempera-ture forms / DBM withporcine gelatin carrier

BVF (extremities, spine andpelvis)

Processed using theBiocleanse system whichassures sterility, which is acommon concern whenusing cadaver tissue.

100% of lots are tested forosteoinductive potential.

Level of sterililzation is 10-6.

Progenix DBM PuttyMedtronic

sofamordanek.com

Putty / 70% DBM in abiocompatible carrier,which is a mixture ofbovine collagen (Type Ibovine collagen) with anatural polysaccharide(sodium alginate) toenhance handlingproperties

BVF and bone graft substitute(pelvis, ilium and extremities);used alone in extremities orpelvis; must be mixed withautograft bone and used as abone graft extender in spine.

Firm, yet moldable puttyconsistency that resistsdissolution and can bedelivered precisely through asyringe; no other DBM on themarket offers the completepackage of handlingcharacteristics likePROGENIX™ DBM Putty.

100% of lots are tested forosteoinductive potential.Certified osteoinductivethrough a validated,osteoinductive assay oninitial DBM and finalsterilized DBM product, tomitigate variability andensure consistentosteoinductiveperformance.

Same as for Osteofil.









Differentiation


potential?

For DBMs,what type ofsterilization /

processing is used?*

References

MusculoskeletalTransplant Foundation

mtf.com

DBX; Distributed bySynthes in the U.S.; alsoby a number of Allograftconsultants

Paste, putty, mix, strip /Paste and DBX Putty bothcontain Demineralizedcortical bone + sodiumhyaluronate (paste and putty).Demineralized cortical bone +partially demineralizedcancellous bone + sodiumhyaluronate (Mix).Demineralized cortical bone+ sodium hyaluronate+ porcine gelatin (Strip).Bone by weight: Paste 26%,Putty 31%, Mix 35%,Strip 45%

Paste: BVF (pelvis,extremities and cranial/maxillofacial), Putty: BVF(pelvis, extremities,posterolateral spine andcranial/maxillofacial); Mix:BVF (pelvis, extremities,spine and mandibularreconstruction); Strip: BVF(pelvis, extremities andposterolateral spine forposterolateral fusion)

Clinical evidence/history,excellent handlingcharacteristics, resistsmovement under irrigation,high quality donor tissue,biocompatible andbiological carrier, easy touse (no mixing or thawing)

Each lot of DBX is testedeither in the athymic mousemodel or in an alkalinephosphatase assay (DBXPutty only) to verifyosteoinductive potential.

All DBX is processedaseptically. No terminalsterilization is used.

1) Schwartz Z et al. ClinicalEvaluation of DemineralizedBone Allograft in a HyaluronicAcid Carrier for Sinus LiftAugmentation in Humans: AComputed Tomography andhistomorphometric Study.Clinical Oral Implant Research,March 13, 2006. 2) Becker Vet al. Comparison of Autograftto DBX® Demineralized BoneMatrix Putty Combined withAutograft Used in Postero-lateral Lumbar Spinal Fusion.Presented at the 73rd AnnualMeeting, American Associationof Neurological Surgeons,April 2005.

Orthofix

orthofix.com

Trinity MultipotentialCellular Bone Matrix;Manufactured byOsiris, distributed byOrthofix and BlackstoneMedical.

1cc, 5cc and 15cc size vials /Cancellous bone matrix ofviable mesenchymal stem cells(>50,000 MSCs/cc)

HCT/P; for repair,replacement andreconstruction of skeletaldefects

Of commercially availableproducts, Trinity Matrix aloneoffers all three elements ofbone formation: osteocon-duction, osteoinduction andosteogenesis. Trinity Matrixwas designed to mimic thebiologic profile of autograft.It is processed to provide alevel of stem cells that iscomparable to autograft,without the associated risksand morbidity.

In addition to standard testingto ensure its safety, TrinityMatrix also undergoes moreadvanced testing to: 1) ensurethat the cells are present inthe material in sufficientnumber to support boneformation; 2) document thatthey are alive (viable); and3) demonstrate that they havethe ability to differentiate intoosteoblasts and form newbone (osteogenesis).Extensive serological testing,sterility testing, and bioburdentesting performed on every lot(every donor).

1) Arinzeh TL et al. AllogeneicMesenchymal Stem CellsRegenerate Bone in a CriticalSized Canine SegmentalDefect. JBJS85-A(10), 2003.2) Bruder SP et al.Mesenchymal Stem Cells inBone Development, BoneRepair, and SkeletalRegeneration Therapy.Journal of CellularBiochemistry 56: 283-294,1994.

Origen DBM withBioactive Glass;Manufactured byNanotherapeutics;distributed by Orthofixand BlackstoneMedical. .

Orthofix

orthofix.com

Paste in 2cc, 5cc, and 10ccsyringes / Bioactive Glass +DBM with a porcine gel carrier

BVF (extremities and pelvis) Contains Bioactive Glass,which is a unique syntheticmaterial that is extremelybiocompatible and turns on -or “upregulates” – the processof osteogenesis. Some of theimportant genes upregulatedby the dissolution process ofBioactive Glass include IGF-II(known to induce osteoblastproliferation in vitro) andVEGF (which promotesneovascularization.)

Each lot of DBM is evaluatedfor osteoinductive potentialusing an in vitro bioassay.Results from this bioassaywere correlated to theathymic rat model. Testingeach lot of DBM with this cellbioassay assures that onlyDBM with osteoinductivepotential is used in Origen.

E-beam sterilization 1) Hench LL et al. BioactiveGlasses for in situ TissueRegeneration. Journal ofBiomaterial Science andPolymer Education 15(4),2004. 2) Allan I et al. Anti-bacterial activity of particulateBioglass® against supra- andsubgingival bacteria.Biomaterials 22, 2001.

Osteotech

osteotech.com

Grafton Gel, putty, flex, crunch,Orthoblend, matrix, matrixstrips / DBM fibers + glycerol

BVF, bone graft extenderand bone graft substitute

Holds the largest Burden ofProof of all DBMs, havingprospective human clinicalpublished trials. Only DBMshown as effective asautograft as a substituteproduct in posterolateralfusions. Most osteoinductiveDBM due to demineralizedbone fibers which arepatented by Osteotech.Highest osteoinductive DBMdue to superior processing.

Tests FINAL DBM product forosteoinductivity.

Does not use terminalsterilization; asepticallyprocesses and sterility testsevery lot.

1) Cammisa et al. Spine 29(6):660-666, 2004. 2) Peterson Bet al. JBJS 86-A(10): 2243-50,2004.

Smith & Nephew

smith-nephew.com

ViaGraf DBM;Prepared via aproprietary methodby Osteotech.

Putty, gel, Flex, paste, Crunch /DBM in glycerol carrier (putty,gel, Flex); DBM in starch carrier(paste); DBM in a glycerolcarrier plus cancellous chips(Crunch)

BVF (extremities) Comes in five forms, assumingthe surgeon has the right formfor the bone graft procedurebeing performed; provenosteoinductive 100% of thetime in animal trial conductedwith the finished product.Multiple pack sizes providecustomer savings by reducingwaste. No preparation required.

Aseptically processed andtested for sterility, accordingto the procedures in thecurrent U.S. Pharmacopeia.Osteotech may use lowdose gamma irradiation asan adjunct to asepticprocessing to reducebioburden.






Notes to Exhibit 2:*Aside from testing of donor tissue and determination of eligibility oftissue for transplantation by qualified tissue bank.

Shirley A. Engelhardt is President and Founder of KnowledgeEnterprises, Inc., a strategic services firm solely focused onorthopaedics. She is also a Founder and Managing Member ofKnowledge Ventures, LLC, an early stage musculoskeletal investmentfund. She can be reached at 336-685-5448 or [email protected].




Differentiation


potential?

For DBMs,what type ofsterilization /

processing is used? *

References

Spineology

spineology.com

G2; Speciallyengineered by MTF forSpineology.

AFT in sodiumhyaluronate carrier,Dry Mix / Granular Graftmixtures of DBM +corticocancellous chips

BVF

Wright Medical

wmt.com

Allomatrix Putty / DBM (w/ and w/ocancellous chips) +CaSO4 carrier

BVF Handling better thanother DBM putties...mixing in O.R. allowsaddition of equalvolumes of BMA withoutloss of handling

All are tested forosteoindcutivity (eitherthe final product and/orthe DBM) - 100%.

All lots are sterilizedwith e-beam irradiationfor sterility.

Wilkins K. The Effect ofALLOMATRIX®Injectable Putty on theOutcome of Long BoneApplications.Orthopedics 26(5):s567-s570, 2003.

IgniteWright Medical

wmt.com

Injectable when mixedwith appropriate volumeof BMA / DBM + CaSO4carrier (designed to berehydrated with BMA)

BVF Only DBM compositedesigned specifically toaddress problemfractures minimallyinvasively

All are tested forosteoinductivity (eitherthe final product and/orthe DBM) - 100%.

All lots are sterilizedwith e-beam irradiationfor sterility.

1) Wilkins et al.Percutaneous Treatmentof Long BoneNonunions: The Use ofAutologous BoneMarrow and AllograftBone Matrix.Orthopedics 26(5):s549-ss554, 2003

Cancello-Pure;Manufactured byRTI Biologics;distributed by WrightMedical in foot andankle market.

Wright Medical

wmt.com

Wedges / Bovinecancellous bone

BVF As strong as allograftcancellous bone andreadily availableoff-the-shelf as a sterileimplant

Zimmer

zimmer.com

Puros® DemineralizedBone Matrix;Manufactured byRTI Biologics,distributed by ZimmerSpine and ZimmerTrauma/Recon.

Putty / 100% derivedfrom allograft tissue -including carrier

Regulated as a humantissue; indicated forhomologous use forrepair, replacement,or reconstruction ofmusculoskeletal defects

Ready-to-use DBMstored at controlledroom temperature;every lot tested usingin vivo rat assay forosteoinductive potential;100% derived fromdemineralized humanbone; allograft carrierexhibits no dilutive effecton osteoinductivepotential; moldable andeasy-to-extrude;sterilized to SAL 10-6using low dose, "cold"gamma irradiation

Every lot (donor) of DBMtested for osteoinductivepotential using an in vivorat assay. Final(packaged, sterlized)product tested forosteoinductive potentialusing an in vivo rat assay.

Sterilized to SAL10-6 using low dose,"cold" gammairradiation

ZimmerTrauma/Recon

zimmer.com

CopiOs® CancellousBone Graft;Manufactured byRTI Biologics.

Chips, cubes, wedges /Bovine bone

BVF (extremities, pelvisand spine)

Provides expandedsupply of safe, steriletissue. Studies showCopiOs CancellousBone Graft incorporates(remodels) comparablyto allograft.

Case reports andanimal studies

Enquiry No 52


Enquiry No 19



May 2008

May 1-3American Orthopaedic Foot & AnkleSociety Advanced Foot and Ankle CourseSan Francisco, CAwww.aofas.org

May 5RRY Publications 3rd Annual SpineTechnology SummitMiami, FLwww.ryortho.com/2008spine

May 6-9Spine Arthroplasty Society GlobalSymposium on Motion PreservationTechnology, 8th Annual MeetingMiami, FLwww.spinearthroplasty.org

May 16-17Orthopaedic Trauma AssociationAdvanced Trauma Techniques Coursefor ResidentsDallas, TXwww.ota.org

May 18-21Current Concepts in Joint ReplacementSpring MeetingLas Vegas, NVwww.ccjr.com

May 19-20Rodman & Renshaw 5th Annual GlobalHealthcare ConferenceMonte Carlo, Monacowww.rodmanandrenshaw.com

May 19-20Council for EntrepreneurialDevelopment BIOTECH 2008: Fusing Science, Technology and IndustryLeadershipWinston-Salem, NCwww.cednc.org

May 21-24European Society of SportsTraumatology, Knee Surgery &Arthroscopy Annual MeetingPorto, Portugalwww.esska.org

May 25-31The International Society for the Studyof the Lumbar Spine Annual MeetingGeneva, Switzerlandwww.issls.org

May 26-31Spine Society of Europe: SpineWeekGeneva, Switzerlandwww.spineweek.com

May 28-31American College of Sports MedicineAnnual MeetingIndianapolis, INwww.acsm.org

May 28-June 18th World Biomaterials CongressAmsterdam, The Netherlandswww.wbc2008.com

May 29-June 1European Federation of NationalAssociations of Orthopaedics &Traumatology 9th EFORT CongressNice, Francewww.efort.org

May 30-316th Annual Medical InnovationsConference, Hosted by MaterialiseVienna, Austriawww.materialise.com

June 2008

June 3-71st World Congress of MinimallyInvasive Spine Surgery & TechniquesHonolulu, HIwww.wcmisst.org

June 4-7American Orthopaedic AssociationAnnual MeetingQuebec, Canadawww.aoassn.org

June 11-14Southern Orthopaedic AssociationAnnual MeetingHot Springs, VAwww.soaassn.org

June 12-14European Society of MusculoskeletalRadiology Annual MeetingGalway, Irelandwww.essr.org

June 13-14AAOS Continuing Medical EducationCourse #3207 AAOS/POSNA Surgical Techniques for

Managing Pediatric Orthopaedic Sports Injuries Rosemont, ILwww.aaos.org

June 13-17Association of Bone and Joint SurgeonsAnnual MeetingJackson Hole, WYwww.abjs.org

June 17-19Medtech Insight’s In3 Medical DeviceSummit Annual Meeting San Francisco, CAwww.meddevicesummit.com

June 18-19Fourth Annual OrthopaedicManufacturing & Technology Expositionand Conference (OMTEC)Rosemont, ILwww.orthosupplier.com

June 19-22American Spinal Injury AssociationAnnual MeetingSan Diego, CAwww.asia-spinalinjury.org

June 25-28American Orthopaedic Foot & AnkleSociety 24th Annual AOFAS SummerMeeting and Pre-meeting CourseDenver, COwww.aofas.org

July 2008

July 8-11Scoliosis Research Society - IMAST:International Meeting on AdvancedSpine Techniques Hong Kong, Chinawww.imastonline.com

July 10AAOS Continuing Medical EducationCourse #3230 AAOS/ASSH General OrthopaedicReview Chicago, ILwww.aaos.org

July 10-13American Orthopaedic Society forSports Medicine Annual MeetingOrlando, FLwww.sportsmed.org

CCAALLEENNDDAARR OOFF EEVVEENNTTSS



July 13-15International Society for FractureRepair Biennial Meeting Lake Tahoe, NVwww.fractures.com

July 18-19AAOS Continuing Medical EducationCourse #3206AAOS/ASES Arthroscopic Managementof Rotator Cuff Disease and Instability Rosemont, ILwww.aaos.org

July 23-26Western Orthopaedic AssociationAnnual MeetingMaui, HIwww.woa-assn.org

August 2008

August 24-28International Society of OrthopaedicSurgery and Traumatology - SICOT/SIROT 2008 XXIV Triennial WorldCongressHong Kong, Chinawww.sicot.org

September 2008

September 9-13Scoliosis Research Society AnnualMeeting & Course Salt Lake City, UTwww.srs.org

September 10-12Clinical Orthopaedic Society AnnualMeetingPoint Clear, ALwww.cosociety.org

September 11-13Society for Biomaterials - TranslationalBiomaterial Research: AdvancingDiscoveries from the Laboratory to theClinic Atlanta, GAwww.biomaterials.org

September 15-16American Institute for Medical andBiological Engineering Council ofSocieties’ 3rd Annual Federal SymposiumWashington, D.C.www.aimbe.org

September 17-20The 7th Annual SIGN Conference(Surgical Implant Generation Network)Richland, WAwww.sign-post.org

September 18-20AAOS Continuing Medical EducationCourse #3210Contemporary Techniques in SpinalSurgery 2008 Rosemont, ILwww.aaos.org

September 18-20North Pacific Orthopaedic Society 83rdAnnual Meeting Union, WAwww.northpacificortho.org

September 18-20American Society for Surgery of theHand 63rd Annual MeetingChicago, ILwww.assh.org

September 18-20International Federation of Foot andAnkle Societies Third TriennialScientific MeetingBahia, Brazilwww.globalfoot.org

September 18-21Osteoarthritis Research SocietyInternational Annual World Congresson OsteoarthritisRome, Italy www.oarsi.org

September 20AAPS Continuing Medical EducationCourse #3232Top Orthopaedic ControversiesIrvine, CAwww.aaos.org

September 21-24AdvaMed 2008: The MedTechConference, Annual Meeting Washington, DCwww.advamed2008.com

September 25-27Clinical Orthopaedic Society AnnualMeetingAnnapolis, MDwww.cosociety.org

September 26-27Orthopaedic Rehabilitation AssociationAnnual MeetingSeattle, WAwww.orthorehabassoc.org

October 2008

October 10-12AAOS Continuing Medical EducationCourse #3228AAOS presents Life After Orthopaedics:Prepare for Career Changes andRetirement Tucson, AZwww.aaos.org

October 11-152008 BIO Venture Capital Forum: Investin Biotechnology, Invest for FutureDalian, Chinawww.bio-vc.com

October 14-18North American Spine Society 23rdAnnual MeetingToronto, Canada www.spine.org

October 16-18Orthopaedic Trauma Association AnnualMeeting Denver, COwww.ota.org

October 17-19AAOS Continuing Medical EducationCourse #3227 - 3rd Annual OrthopaedicPractice Management Course: Building Essential Skills for a SuccessfulPractice Washington, D.C. www4.aaos.org/education/mastcaldb/cme.cfm

October 22-24Medtech Insight’s Investment inInnovation (In3) East Boston, MAwww.medtechinsight.com

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CCAALLEENNDDAARR OOFF EEVVEENNTTSS



CCLLIINNIICCAALL RREEVVIIEEWW

ABSTRACT

Objective: This study was performed to collect five-year follow-upon patients with lumbar disc herniation treated with intradiscalinjection of ozone gas.

Background: Disc herniation is the most common cause for spinalsurgery, and many clinicians employ epidural steroid injections withlimited success. In numerous countries, intradiscal injection of ozonegas has been used as an alterative to epidural steroid and surgicaldiscectomy. Early results are positive, but long-term data are limit-ed.

Methods: Ninety-five patients with confirmed contiguous disc herni-ation were treated with intradiscal injection of ozone in 2002.Eighty-seven patients were available for telephone follow-up at fiveyears and a chart review was performed. Patients were asked todescribe their clinical outcome since the injection. Surgical interven-tions were documented. Available MRI films were collectivelyreviewed to assess the reduction in disc herniation at six months.

Results: Of the 87 responders at five years, 63 (72%) reported being“much better,” three (3%) were “better,” eight (9%) had noimprovement and 13 (15%) went on to surgery. There were 12 dis-cectomies and one fusion, with ten of the 13 surgeries occurringwithin the first year. Two patients had a second intradiscal ozoneinjection for an average of 1.02 injections per patient. MRI filmsdemonstrated a consistent reduction in the size of the disc hernia-tion. Seventy-nine percent of patients had a reduction in herniationvolume and the average reduction was 56%. Other than subsequentsurgeries typically associated with these patients, no complicationswere experienced.

Conclusion: Ozone is a conservative alternative to surgical discecto-my for many patients. The gas reduced the size of the disc herniation.Randomized trials are required to gain wider acceptance of thistreatment option.

INTRODUCTIONDisc herniation is the most common cause of lumboradicular pain and

is the most frequent indication for spine surgery. The yearly incidencerate of disc herniation in the U.S. has been reported to be 1.7%.1 From1990 to 1993, 0.8% of the population of the state of Washington had firsttime surgery for disc herniation annually.2 The rate of reoperation isbetween seven to nine percent at two years3,4, and increases up to 25% atten years postoperative.2, 5, 6, 7, 8, 9, 10 Patients with extensive epidural scar-ring are three times or more likely to experience recurrent radiculopathythan those with less extensive epidural scarring.11, 12, 13

Conservative care should be exhausted prior to surgery. It is estimat-ed that in 2007, there were over one million U.S. patients in conservativecare for disc herniation and an additional 245,000 opting for surgery. Inthe Medicare population, the annual rate of epidural injections is 2,055per 100,000 patients.14 Nine percent of those were for a diagnosis of her-niated disc and 33% were for radiculopathy. Steroid injections have atransient effect and the average number of injections received by apatient was 2.5. Assuming a population of 300 million, approximately222,000 U.S. patients are undergoing steroid injection each year specifi-cally for disc herniation, and an additional 813,000 for radiculopathy.Approximately 25% to 47% of patients having epidural steroid injectionsfor disc herniation go on to surgery.15, 16

Intradiscal injection of ozone (03) gas was first proposed in the 1980sas a treatment for disc herniation. Ozone is a tri-atomic form of oxygenthat can be created through corona discharge or ultraviolet light. Ozonehas a half-life of approximately 45 minutes at ambient conditions, revert-ing back to oxygen, and therefore must be produced onsite for immedi-ate injection. Ozone is a strong oxidizer and its application to the nucle-us results in cleaving of the proteoglycan molecules and neutralization ofthe negatively charged sulfate side chains.17 This likely reduces the disc’sability to retain water and may result in a reduction of the herniation vol-ume. Additionally, ozone may initiate a biological cascade to reduceinflammation associated with the herniated material.18

Several animal studies involving spinal application of ozone havebeen reported in the literature. These include dose response studies inrabbits19, 20 an acute toxicity study in pigs21, and a veterinary application

Five Year Follow-Up on Intradiscal OzoneInjection for Disc Herniation

Authors: Josip Buric, M.D.*, Luca Rigobello, M.D.†, Bruce Frankel, M.D.‡, David Hooper, Ph.D.§


* Functional Unit for Spinal Surgery, Florence, Italy.†Department for Neurosurgery, University of Padua, Padua, Italy.‡ Department of Neurosurgery, Medical University of South Carolina, Charleston, South Carolina.§ Consultant and Founder of Minimus Spine, Austin, Texas.




to dogs presenting with parasthesia or paralysis due to disc herniation.22

These studies support that ozone has a dose-related response involvingchanges to the collagen fibrils and nucleus cells. Ozone had no toxiceffect when injected into the epidural space of pigs. Canines treated withozone demonstrated improved function that was maintained out to 18months.

Several clinical reports of the use of ozone to treat lumbar23, 24, 25, 26, 27, 28,

29, 30, 31, 32 and cervical33, 34 disc herniations in humans have been presentedin the literature. Only one randomized, blinded trial has been reported,23

but there are numerous non-randomized prospective and retrospectivestudies in the literature. Authors consistently report success ratesbetween 65 to 80% and few complications. There are isolated casereports involving adverse events following intradiscal injection of ozone.These include a case of transient bilateral blindness following a largeinjection of ozone35, a nerve root injury associated with a pressure spikeduring the injection36, a thunderclap headache attributed to puncture ofthe thecal sac37, and a fatal septicemia due to E. Coli infection.38

Here we report a retrospective long-term analysis of 94 patientssequentially treated with ozone chemonucleolysis. Six month postopera-tive MRI and 5 year postoperative clinical data are presented.

METHODSDemographics: From January 2002 through January 2003, 94 patients(54 males/40 females, mean age 44.9 ± 14.5 years) were treated with per-cutaneous ozone chemonucleolysis. All patients suffered radicular legpain and some reported additional back pain. The duration of symptomswas at least one month (mean 9.2 ± 15.4 months and median fourmonths) and patients were non-responsive to conservative treatmentmodalities. None of the patients submitted to the treatment presentedmotor palsy of Fisher < 4. In all cases, MRI was used to confirm a pro-truded or extruded disc/s between L2 and S1. There were 77 patients withsingle level involvement, 15 with two levels and two with three levels.Patients that presented with signs of motor palsy (Fisher < 4), low backpain as the only symptom, sequestrated (free) disc fragments or otherspinal pathologies such as tumours, lyses, fractures, severe stenosis andprevious spinal surgeries, were not treated with ozone and are thereforenot included in the study. All patients gave informed consent.

Procedure: The procedure was performed in the operating room undermoderate sedation. The patient was prepared by the anaesthesiologistwith pharmacological sedation half an hour before the procedure andthen brought to the operating room and positioned in lateral decubitusleaving the affected side upwards with the hips and knees flexed in thefetal position. The operating table was adjusted to assume an upwardsconvex shape, allowing the surgeon easier access to the disc. After stan-dard antiseptic prepping and sterile draping, a Chiba-type needle (18 G,27 cm long) was introduced by the standard postero-lateral, extra-articu-lar percutaneous approach. The side of approach corresponded to the sideof maximal pain as described by the patient. This corresponded to theside of disc herniation as seen on the MR images in 97% of patients. Thegas disperses throughout the disc and annular tears so the side ofapproach is not believed to be critical. All procedures were performedunder fluoroscopic control. AP and lateral imaging confirmed the posi-tion of the needle within the disc. The needle tip was situated centrallyinside the nucleus pulposus.

The ozone-oxygen mixture was produced in real-time by a medicalozone generator (Ozonline E 80, Medica srl, Bologna Italy). The concen-

tration of the gas mixture was approximately 40 mg 03 / ml 02 and a quan-tity ranging between 5 to 10 ml were injected into each level. Betweenthe syringe and the needle, a bacteriological Millipore filter was positioned before infiltrating the gas mixture inside the disc space. Theozone-oxygen mixture was released inside the disc space at an approxi-mate rate of 10 ml/min. The gas mixture inside the disc space was visi-ble on fluoroscopy. Gas was observed diffusing through the disc spaceand through the herniation. The patient was kept for overnight observa-tion and discharged the next morning. Return to work was permittedseven days after the procedure. The mean operating time was 15 minutes(range: eight to 20 minutes).

Clinical Assessment: Patient history, demographic and clinical data werecollected from hospital records and a confidential computer databasemaintained by the investigator. An independent assessor performed atelephone interview and the patients were asked the following questions:

• How do you feel with respect to the pre-operative clinical status:worse, unchanged, better, much better?

• Have you had any recurrences of the pain during the five yearperiod?

• Do you use pain killers: never, occasionally, on a regular basis?Fifty-three patients had an MRI at six months follow-up (range three

to eight months). Images were evaluated by independent neuroradiolo-gists and compared to the preoperative images. The change in the herni-ation volume was recorded in AP and lateral views.

RESULTSClinical Assessment: Eighty-seven patients (93%) were available fortelephone interview. Results are summarized in Exhibit 1. In total 67patients (76%) reported a durable improvement over five years followingintradiscal ozone injection. Twenty patients (24%) did not achieve ormaintain the improvement for five years. Twelve patients had discecto-my and one patient had a fusion within five years for a surgery rate of15%. Two of the 87 patients had a second ozone injection for an averageof 1.02 injections per patient.

Exhibit 1: Results summarized over a five-year period. This graphincludes all 87 patients available for follow-up. Seven patients could notbe located.






Compared to preoperative status, three patients reported feeling “bet-ter” and 63 reported feeling “much better.” The three patients in the “bet-ter” group reported absence of pain but some degree of occasional tin-gling in the leg related to posture. They reported occasional use ofpainkillers and one patient reported performing postural exercises twicea year for persisting back pain. Six patients in the group reporting as“much better” experienced worsening of symptoms for a period of timeranging between one to three weeks that was treated with NSAIDs andphysical therapy, mainly postural exercises. These events occurredbetween two to four years after the initial treatment. Two of thesepatients reported two to three isolated events of pain in the past fiveyears. The patient that went on to fusion had an improvement in leg painbut developed back pain between three and four months. Conservativecare was employed for eight months before the fusion was performed.

Of the 21 patients (24%) who reported an “unchanged” or “worse”status, 15 patients reported having never obtained any clinical improve-ment after the procedure. Of these 15 patients, eight went on to microdis-cectomy one to four months after the ozone procedure. The remainingseven patients continue to be treated with conservative means and occa-sional pain medication. Three patients maintained improvement forapproximately one year and then worsened: one was operated upon, onerepeated the ozone chemonucleolysis and one refused surgery and is onpain medication. Two patients maintained benefit for two years beforeexperiencing a recurrence of pain that required microdiscectomy. Twopatients maintained clinical improvement for three years and then wors-ened: one went on to microdiscectomy and had a second injection ofozone.

Chi-square analysis was performed to determine if disc level or num-ber of disc levels was predictive of clinical success. Patients were divid-ed into those that improved (better or much better) and not improved (noimprovement or worse). There was no significant difference in clinicaloutcome between single level cases and multiple level cases (χ2=1.81,dof=1, p=0.18). Isolating the single level cases and testing for effects ofdisc level revealed no significant relationship (χ2=1.48, dof=3, p=0.688).The mean preoperative symptom duration for the non-improved groupwas 12.5 (± 22.7, n=20) months compared to 8.8 (± 13.4, n=67) months

for the group of improved patients. This was not statistically significant(p=0.37)

Radiographic Assessment: The post-operative MRI review of 53patients revealed significant changes compared to pre-op in 42 patients(79%). The reduction in herniation volume ranged between 50 to 100%(mean 56.1%). See Exhibit 2 for a typical result. Exhibit 3 shows the pre-and post-MRIs for the patient who went on to fusion. The film demon-strates some collapse of the disc that resulted in back pain several monthsafter the injection of intradiscal ozone.

With the exception of the single case of disc collapse that resulted ina fusion and previously described discectomies, no other complicationswere observed. Specifically, there were no cases of discitis, septicemia,blindness, headache, cerebroprospinal fluid fistulae, etc.

DISCUSSIONOzone chemonucleolysis for disc herniations has been performed for

20 years in countries such as Italy, India, Spain, Germany, Argentina,Korea and China. The authors are only aware of one other report of five-year follow-up following intradiscal injection of ozone.29 That studyreported on an aggregated 6,665 patients treated in Italy, Spain andArgentina. All patients had a disc herniation that was unresponsive toconservative care such as physical therapy and medication. Thesepatients were treated with intradiscal ozone followed by four paramuscu-lar injections rather than a single intradiscal injection, as in this report.These authors reported complete elimination of pain in 80%, improve-ment in 12% and no improvement in seven percent. That study, like thisone, lacks randomization and blinding. However, both confirm durablepositive results in a large percentage of patients without surgery.

Two questions arise from the lack of randomized control trials. Arethe results related to a placebo effect, or simply evidence of the naturalhistory of disc herniation? Gallucci et al.23 reported the results of a ran-domized, blinded study of 159 patients assigned to either ozone com-bined with steroids or steroids alone. At two weeks the results betweengroups were equivalent, likely due to the short-term affect of steroids andanesthetic. At three months, however, results began to diverge but werenot significant. At six months, 74% of the patients with ozone reached anODI score of less than 20%, whereas only 47% of the steroid-treatedgroup reached this level of improvement.



Exhibit 2: MRI showing a reduction in the volume of the disc herniationafter intradiscal ozone injection. The follow-up MRI was taken at fivemonths.

Exhibit 3: MRI showing the pre- and six-month MRI films of the patientthat went on to fusion. This patient improved in their leg pain but devel-oped back pain between four to six months.




Muto et al.27 reported on 2,200 patients treated with intradiscal andforaminal ozone injections and followed for 18 months. A wide array ofpatients were treated including degenerative disc disease complicatedwith disc herniation, isolated herniation, failed back syndrome, calcifieddisc herniations and disc herniation associated with stenosis. Ozoneinjection was most effective in cases with single level disc herniations(64% Excellent and 14% Good or Fair) and the effectiveness decreasedwith disc degeneration (40% Excellent, 39% Good or Fair), calcified discherniations (34% Excellent, 19% Good or Fair) and disc herniation withstenosis (25% Excellent, 25% Good or Fair). With all indications, maxi-mum improvement was at six months and the results were stable to 18months. If the placebo effect was solely responsible for the benefit, thenthere would not be such a difference in the outcome based on the indica-tion.

In an effort to study the natural history of disc herniation, severalauthors have attempted to compare conservative management to surgery.The results have been equivocal.3,4,9 There are significant challenges indesigning randomized trials comparing non-surgical and surgical treat-ment for disc herniation, particularly cross-over between assignedgroups. These studies indicated, per an intent-to-treat analysis, that therewas no significant difference between conservative and surgical treat-ment after one to two years. The surgical treatment offered more imme-diate benefit, but the results equalize over time. The amount of cross-over between assigned groups confirms that patients with more severesymptoms are apt to demand surgery, while those with less severe symp-toms are prone to delay surgery. Patients appear well suited to balancethe risk and benefit of their treatment options.

We observed that out of 53 randomly selected patients performing acontrol MRI after the treatment, 42 patients (79%) showed regression ofthe herniation volume of approximately 56%. All of these patients had asignificant clinical improvement. Other authors have also reported thatthe disc herniation volume is not always correlated with clinical symp-toms and that the persistence of herniation may not be correlated with theworsening of clinical status.39 Asymptomatic patients with positive CTscans for disc herniation are not a rare event.40

The biochemical component of the disc degeneration is an importantsource of pain that is coupled with nerve root compression. Recently, lab-oratory results showed that epidural application of autologus nucleuspulposus can induce pronounced morphological and functional changesin nerve roots due to an increase in endoneurial fluid pressure and adecrease of blood flow in the dorsal root ganglia with resulting concomi-tant increase in its excitability and mechanical hypersensitivity.41,42

Phospholipase A2, tumor necrosis factor a, metalloproteinases and someother substances were found in great quantities in the degenerated nucle-us pulposus. These were found able to cause nerve root injury by partialdemyelination that increases nerve root mechano-sensitivity making thenerve root more susceptible to mechanical pressure. The mechanical fac-tor seems then to be able to trigger hyper excitability and the ectopicnerve impulses in primary afferent axons that cause neuropathic pares-thesia and pain.43,44

Ozone has the ability to influence both of the mechanical and bio-chemical sources of pain. The basic science studies on ozone activity,conducted in several university centers in Italy, found that the mixture ofozone and oxygen has a potent, dose-related, biological activity.45, 46, 47, 48, 49

At high concentrations (30-70µg 03/ml 02), it may cause alteration anddestruction of tissue structures. At medium concentrations (20-30 µg03/ml 02) it seems to affect the regulation of the immune system, while atlow concentrations (<20 µg 03/ml 02) it improves the microcirculation.

Experimental studies indicate that at adequate concentration and vol-umes, ozone has no mutagenic properties.50 With respect to intradiscalinjections, more than one biological effect of ozone seems to beinvolved. Histological studies, performed on animal models, demonstrat-ed that the intradiscal application of ozone at high concentrations (30 –40µg 03/ml 02) produces degeneration of cytosol and cell shrinkage in thenucleus pulposus.19,51 Exposure of purified rheumatoid arthritis synovialfibraoblast cells to ozone created an observable decreased production ofproinflammatory factors TNF-α, IL-1b and IL-6.18 Ozone may regulatethe expression of inflammatory substances that are contributing toinflammation and consequent hyper-excitability of the nerve. It could besupposed that the biochemical effect might have a leading or at least anearly role in patient improvement, while the volume reduction is adelayed and durable late effect. In some of the patients the biochemicaleffect may be solely responsible for improvement in symptoms becauseclinical improvement was not clearly correlated with changes in the her-niation volume.

Others have cited that patients receiving epidural spinal injectionstake an average of 2.5 injections14 and between 25 to 47% go on to sur-gery.15,16 Additionally, approximately 15% of discectomy patients have asecond operation within five years. This study demonstrated that only15% of ozone patients went on to surgery within five years and the aver-age number of injections was just 1.02 injections per patient. Well-designed, randomized control trials are needed to confirm that intradis-cal ozone injection is superior to traditional conservative care or a validalternative to surgical treatment in select cases. Ozone chemonucleolysisis a simple, low-risk procedure that bridges between existing conserva-tive measures and surgical discectomy.

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