Regulatory, Reimbursement & Clinical Challenges in the Orthopaedic Marketplace

The medical device industry faces a number of significant challenges. Federal health care reform, unpredictable U.S. regulatory pathways and an uncertain economic climate are exerting a tremendous amount of pressure on the entire industry. Various segments of the orthopaedic market have been hit especially hard as procedure numbers drop and payors issue more restrictive coverage guidelines. In addition, the 510(k) pathway is no longer a predictable process for orthopaedic devices. Today, more so than ever, we need to stay vigilant within this changing landscape. This article will review the current 510(k) environment, economic considerations and study-design considerations for the orthopaedic industry.

Regulatory Challenges

Nearly 60% of the medical devices assigned to FDA’s orthopaedic review panel are marketed via the premarket notification (510(k)) process. Until recently, the 510(k) process had been relatively constant and predictable for manufacturers introducing new or modified devices. Today, decision timelines for 510(k)s are taking 25% longer compared to five years ago. FDA conducted an internal evaluation of the 510(k) process and published their preliminary findings in August of last year. On January 19, 2011, they announced the first definitive changes to the 510(k) clearance process based on over 12 months of public meetings, town hall meetings, an internal task force report and scores of comments submitted to the docket from industry, the medical profession and consumer groups.

Some of the key activities affecting the orthopaedic industry include:

  • Increasing the predictability of requirements through guidance as to when clinical data will be needed to support a premarket notification (510(k)).
  • Relying on a network of internal/external experts to serve as a “Center Science Council” to review new technologies and ensure science-based decision making.
  • Creating an expansive database for devices to include labeling, detailed descriptions of some devices, and a summary basis for clearance.
  • Communicating agency expectations to industry through an expansion of their guidance programs which will include a Notice to Industry: a shorter, two-page summary guideline or policy for certain devices or technologies.
  • Rescinding 510(k) clearances of inappropriate predicates (such as those that have been removed from the market due to safety or efficacy concerns to make them ineligible as predicates for newer devices. FDA noted their authority to rescind clearance does not have to be codified.

While these steps continue to evolve, it is clear that the increasing demand for manufacturers to provide adequately powered clinical datasets demonstrating the safety and effectiveness of 510(k) products will continue.

Economic Considerations

In today’s dynamic orthopaedic environment, effectively navigating the reimbursement landscape is critical to achieving product success. The general contraction across some segments of the market is in part due to payors developing stricter coverage criteria. Much of a product’s success is determined by effectively proving and communicating the clinical and economic value of a product to payors, physicians, facilities and of course patients. The key to success in this demanding marketplace is credible clinical and economic data. Whether your product is at the idea stage or you are planning for commercialization, be mindful of the following:

  • FDA approval does not mean payor approval.
  • Demonstrating that your product is not inferior to an existing product may gain FDA clearance, but may not be sufficient evidence to achieve payor coverage and payment.
  • Published data in peer-reviewed journals will be required for code applications and payor coverage decisions.
  • Economic data is critical to justify that the benefits of a technology are worth its cost.
  • Long term post clearance data are frequently being requested for orthopaedic and spine devices to establish long term safety and efficacy.
  • Early reimbursement planning is critical to achieve payor acceptance and adequate payment.

Study Design Considerations

The challenges within the regulatory and reimbursement environments lead to a need for convincing clinical evidence. However, designing clinical trials in orthopaedic medicine is a challenge. Prospective, randomized, controlled clinical trials are considered scientifically rigorous; however, historically, these exacting trials represent only a small percentage of the research conducted in orthopaedic medicine. The relatively small number of rigorous clinical trials is due to a host of issues that are somewhat unique to orthopaedic interventions.

Today more than ever we need to carefully evaluate all available study design tools and strategies to ensure that we are maximizing the likelihood of obtaining convincing clinical data. When designing a trial in orthopaedic medicine, researchers must sort through a number of common questions such as:

  • What is the best control?
  • What are the most appropriate primary and secondary endpoints?
  • What is the most efficient method of statistical analysis?

Selection of an Appropriate Control

The selection of an appropriate control group is one of the more difficult challenges encountered by orthopaedic researchers. In many other medical interventions, the default control is a recognized standard of care (SOC). However, in many orthopaedic interventions, a wide variety of treatment options are accepted by the medical community. Adding to the challenge is the fact that some traditional interventions lack convincing evidence. For many device studies subject to FDA review, the control group is often a legally marketed device. Using a marketed device as an active control mitigates some of the potential concerns; however, when using an active control, it may not be possible to demonstrate the superiority of your device (experimental arm) to the control arm.

Therefore, you are left with demonstrating that your product is not inferior to an existing product. Taking this approach may help you obtain regulatory approval, but it may not satisfy your reimbursement and marketing needs. In order to demonstrate superiority to a control, many researchers identify a “conservative treatment” as a control arm. However, during the conduct of a study, the use of a conservative treatment arm (i.e. bed rest, bracing, physical therapy, etc.) can place investigators in a difficult ethical dilemma as a majority of patients present a significant amount of pain at baseline and for some conditions the conservative care arm may be viewed as suboptimal care.

In addition, the rate of subject enrollment may suffer if patients perceive the chance of randomization to the control arm as undesirable. Although the selection of an appropriate control arm may be daunting, careful consideration of the following suggestions may be of assistance:

  • Review and consider the inclusion/exclusion criteria defined within the protocol. Both the experiment and control arm need to be considered appropriate for the patient population under study.
  • Review practice guidelines published by medical societies.
  • Review payment coverage guidance published by various payors.
  • If an appropriate control group cannot be identified, consider using a single arm and establish an objective performance criterion.

Selection of Primary and Secondary Endpoints

Establishing appropriate study endpoints is critical. A wide variety of measures are available to the orthopaedic researcher. Primary effectiveness endpoints typically include measures of pain and/or function, using tools such as pain scales (i.e. Visual Analog Scale) and function/disability questionnaires (i.e. Roland-Morris Disability Questionnaire, Oswestry Disability Index). Secondary effectiveness endpoints common to orthopaedic research include health related quality of life (i.e. SF-36, EQ-5D) and radiographic assessments as well as measures of work productivity, health economics and activity impairment.

When selecting primary and secondary endpoints, researchers need to consider a variety of issues. First, you need to ensure that you are collecting enough information to fully address your stated objectives. Study objectives should take into consideration the needs of all stakeholders, namely, the medical community, FDA, payers and patients. The opportunity cost of adding a measure or two to address potential questions is low when compared to the cost of conducting an additional study. However, you need to be careful that you do not collect more information than what you truly need. Researchers should pay particular attention to collecting redundant information. In addition to the cost implications (i.e. cost of the database, data entry and analysis), collecting redundant information can lead to confounding results that are difficult to interpret or explain.

Methods of Analysis

Currently, a majority of clinical trials in orthopaedic medicine utilize a traditional (or frequentist) method of statistical analysis. Increasingly, researchers are considering the benefits of a Bayesian approach. Under the right circumstances, use of Bayesian statistics may enable the researcher to reach a conclusion with a smaller sample size or shorter duration clinical trial. A Bayesian approach appears to be particularly useful when analyzing various orthopaedic devices, in part because the mechanism of action for orthopaedic devices is typically physical, making the effects local and not systemic. These local effects are often predictable, and this means that data from previous studies may be used as prior information. The ability to use prior information is where Bayesian statistics obtains efficiency.

Specifically, Bayesian statistics uses a defined method for combining known or prior information (i.e. data from early studies on previous generations) with current information on specific parameters of interest. This method is applied throughout both the design and analysis stages of a trial and offers a degree of flexibility by allowing midcourse corrections or adjustments, which may result in requiring a smaller sample or shorter duration to show significance.


Orthopaedic companies, even more than ever before, need to stay close to health-related news and interact/network with peers and industry groups. In this time of regulatory change, companies need to consider starting early and often conversations with FDA. If the agency is seeking clinical data, be sure to evaluate all options to fulfill those requirements. Finally, as orthopaedic companies experience increasing pricing pressures and coverage challenges from payors, be sure that you are satisfying the needs of this demanding segment by providing credible clinical and economic data.

Mary Fautsch is the Vice President of Reimbursement and Health Economics and a Senior Principal Advisor at RCRI, Inc. She has extensive experience in developing and implementing reimbursement strategies for new and established products and therapies. Mary has worked with start-up companies and established market leaders and has experience in all healthcare settings including hospitals, ambulatory surgery centers and physician offices. She has worked with CMS and numerous private payors at the local and national level, forged relationships with professional societies to obtain CPT codes, trained sales and marketing teams, developed numerous innovative tools and services, and has created, developed and managed high-performing reimbursement teams.

Dale Klous is the Vice President of Clinical Operations and a Senior Principal Advisor at RCRI, Inc. He oversees the entire Clinical Affairs Department at RCRI, selecting and training staff, supporting RCRI’s quality initiatives, ensuring clinical practices meet clinical, quality and regulatory standards and client requirements and expectations, facilitating client communication throughout all levels of industry and corporate management and providing leadership in overall project and study management, both internally and externally. As a Senior Principal Advisor at RCRI, Dale provides strategic, regulatory and clinical guidance to clients and RCRI staff through all stages of clinical trials and regulatory needs.

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RCRI, Regulatory & Clinical Research Institute, Inc.