Resurging Lumbar and Cervical Total Disc Replacement Market! New PearlDiver Estimates

Faith makes things possible, not easy. That’s why with respect to the artificial disc market we say “Keep the Faith!” The market for cervical disc arthroplasty looks strong, as does the market for lumbar artificial discs! To understand this market from a surgeon’s perspective, we interviewed one of the world’s leading experts in artificial disc replacement, Dr. Scott Blumenthal of the Texas Back Institute. We also share our revenue forecast for both cervical and lumbar total disc replacements (TDR)—which we believe will be north of $2 billion by 2015. Finally, we use the PearlDiver Patient Records Database to shed some light on the indications debate for these devices.

TDR Design Basics

TDRs have been designed with metal endplates and a polymer or metal core. The NUBAC™, by Pioneer Surgical Technology is the first PEEK-on-PEEK device. Moving forward we anticipate improvements in both design and materials in these devices.

Differences in these devices can be identified in part based on the degree of motion each allows. In an unconstrained device the core has no limits on the range of motion. The CHARITÉ® by DePuy Spine serves an example of this type of design. In a semi-constrained design, such as the ProDisc-L® from Synthes Spine, the core is limited to a range of motion. The core is limited in all degrees of motion in a fully constrained device. 

With respect to fixation, TDRs are either keeled or spiked. The ProDisc-C® is an example of a device using a keel for fixation. The CHARITÉ is an example of a spiked disc.

Interview With Dr. Scott Blumenthal of the Texas Back Institute

Dr. Scott Blumenthal of the Texas Back Institute is an expert in artificial disc surgery. He also specializes in sports-related injuries to the spine. Dr. Blumenthal was one of the first U.S. spine surgeons to be trained by Europe's most experienced surgeons in artificial disc replacement and was Principle Investigator for the SB III CHARITÉ Artificial Disc. For all the basketball fans out there, he is also the spine consultant for the Dallas Mavericks!

1)  What are you thoughts with respect to the idea that the market for lumbar TDRs is slowing?  Does the prospect of a lumbar TDR implanted by the posterior approach improve the outlook?

Dr. Blumenthal believes that the market for lumbar TDRs is going to be strong and said “Lumbar TDR is far from dead and is experiencing a resurgence.” He explained that the market was hurt early on by industry skepticism with respect to the technology. Challenges with respect to reimbursement have also hurt growth of lumbar TDRs. However, Dr. Blumenthal believes that the tone has been less negative recently, and that the literature has been highlighting improved outcomes. Also noted, was that surgeons who actually do TDR are optimistic as well.

2) Does the prospect of a lumbar TDR implanted by the posterior approach improve the outlook?

Dr. Blumenthal said that there was no doubt that lateral and posterior approaches are popular from an industry perspective. He strongly advocates the anterior approach as being the best, and believes that discs implanted anteriorly will lead the way. Much of the success in the surgery is dependent upon having excellent access to the disc space, and the anterior approach provides this.

3) What potential advantages/disadvantages do cervical TDRs have and are surgeons viewing them positively given outcomes data?

Dr. Blumenthal mentioned several advantages that are reason for optimism regarding cervical TDRs. First, is that the indications are clear and the causes of pain are not as elusive in the cervical region as they are in the lumbar. The second is that the anterior approach is advantageous. Surgeons are familiar with the approach because of their experience with ACDF (anterior cervical fusion with discectomy). A disadvantage, which will change with time, is that the literature on this technology is still relatively new.

In the end, Dr. Blumenthal believes that surgeons will adopt artificial discs providing it is shown that they are an alternative to fusion that preserves motion and provide equivalent or better outcomes.

4) What are current concerns regarding hospital reimbursement?

From the hospitals perspective, Dr. Blumenthal said that reimbursement can vary depending on the payment system and by region of the country. Under the DRG system, (diagnosis related groups) these devices can become expensive. The profit to the hospital declines as device cost increases unless there is a specific carve-out for artificial discs.

PearlDiver Study Regarding Indications for TDR

Patient selection for this technology remains a concern. We ran an analysis over the PearlDiver database to find the most common inpatient primary diagnoses related to patients undergoing both cervical and lumbar total disc replacement. Our analysis of 72 patients implanted with cervical TDRs was based on those who were coded as having ICD-9 procedure code 84.62. We ran the same analysis on 171 patients who had a lumbar artificial disc implanted as defined by ICD-9 procedure code 84.65. The data is presented below in Table 1.

Table 1: TDR and Spine Fusion Primary Diagnoses

Source: PearlDiver Patient Records Database

Based on the analysis, over 65% of patients implanted with cervical TDRs had a primary diagnosis of a herniated cervical disc, defined by ICD-9 diagnosis code 722.0. This was followed by 12.5% of patients who were diagnosed with cervical spondylosis, or osteoarthritis of the neck (ICD-9 diagnosis code 721.0. This is a relatively general term identifying age-related wear relating to the joints and neck vertebrae.

Regarding lumbar TDRs, 59.6% of patients had a primary diagnosis of lumbar degenerative disc disease as defined by ICD-9 diagnosis code 722.52. This was followed by diagnoses of lumbar herniated discs, as defined by ICD-9 diagnosis code 722.10.

The analysis suggests that while TDRs are being implanted for the same indications in both the cervical and lumbar regions, there is a difference with respect to primary diagnoses. The majority of the time, cervical discs are being implanted for disc herniations, while lumbar discs are being implanted in response to degenerative disc disease. It can also be surmised that lumbar TDRs are implanted more often for degenerative disc disease.

The bottom half of the table, displays primary diagnoses for anterior cervical and posterior lumbar fusion as defined by ICD-9 diagnosis codes 81.02 and 81.08, respectively. Our analysis is based on 23,791 patients who had anterior cervical fusion as a primary procedure and 17,234 patients who had posterior lumbar fusion as a primary procedure. Degenerative disc disease and disc degeneration are the most common diagnoses. They are also the most common diagnoses associated with fusion. However, spinal instability (spondylolisthesis) and myelopathy are seen being treated with fusion. Spondylolisthesis is a contraindication for TDRs, and supports our belief that this technology will not replace fusion.   

TDR Forecast

Lumbar TDR (2006-2015)

We estimate that the lumbar TDR market could be worth over $600 million in revenues by 2015, as can be seen in Chart 1. For our forecast, we assume a list price of $6,500-$7,500. We conservatively project lumbar TDR penetration of 18%–20% by 2015. Growth of lumbar discs should be driven by:

• Improved product design
• Patient demand for non-fusion solutions
• Increased surgeon training and acceptance
• Additional approaches to implant the device
• Literature pertaining to longer-term outcomes
• Literature showing improved outcomes
• An improving environment regarding reimbursement
• Minimally invasive approaches to implant the disc

Chart 1: Lumbar TDR Revenue Forecast

Source: PearlDiver Estimates

Cervical TDR (2007-2015)

We estimate revenues from cervical TDRs could surpass $1 billion by 2015, as can be seen in Chart 2. We assume a list price between $4,500 and $5,500. Penetration could exceed 30% in the cervical TDR space by 2015. Growth of cervical discs should be driven by:

• Surgeon familiarity with the anterior approach
• Improved designs
• Applying lessons learned from lumbar discs
• Positive outcomes when compared to ACDF

Chart 2: Cervical TDR Revenue Forecast

Source: PearlDiver Estimates

Spine Arthroplasty Society 2008: Article Submission

In May we attended the Spine Arthroplasty Society’s 8th annual meeting (SAS8) in Miami Beach. We are highlighting the ProDisc-C IDE study presented comparing ProDisc-C to ACDF. We feel this study is a positive for the adoption of cervical discs. Studies that provide data showing that cervical discs offer the same or better outcomes as a fusion should be a plus for this technology.

Results of the Prospective, Randomized, Multi-Center Food and Drug Administration Investigational Device Exemption Study of the ProDisc-C Total Disc Replacement versus Anterior Discectomy and Fusion for the Treatment of 1-Level Symptomatic Cervical Disc Disease

According to the abstract the “purpose of the trial is to compare the safety and efficacy of the TDR, ProDisc-C to anterior cervical discectomy and fusion (ACDF) surgery for the treatment of one level disease between C3-C7.”

Inclusion, the study found “The results of this clinical trial clearly demonstrate that ProDisc-C is a safe and effective surgical treatment for patients with disabling cervical radiculopathy due to single level disease. By all measures evaluated, clinical outcomes after ProDisc-C implantation were equivalent or superior to those same clinical outcomes after fusion.”

Total Disc Replacement: Just Warming Up

Total disc replacement technology is still in its infancy. Titanium cages were FDA approved in 1996. In 2002, rhBMP2 was FDA approved and in 1991 demineralized bone matrix (DBM) was approved. This is not to compare growth factors directly to devices, however, it is important to note the amount of learning that has gone on with respect to both devices and biologics subsequent to their approval and the length of time it has taken to fully understand outcomes relating to these devices. They have all experienced great success despite early challenges.

The first artificial disc was FDA approved only four years ago, in 2004. Don’t count this technology out! We forecast continued growth moving forward, despite periodic challenges. In 2015, the state of the artificial disc market may very well surprise the skeptics. Remember, faith makes things possible, not easy.