Cue the $6 Million Dollar Man

Somewhere, Lee Majors must be smiling. Best known for his starring role as Colonel Steve Austin, an ex-astronaut outfitted with bionic implants in the 1970s TV series “The Six Million Dollar Man,” Majors made us all believe that one day humans could be rebuilt joint by joint. Today, most of the key joints in the body can indeed be replaced—hips, knees, ankles, wrists and fingers—all for a lot less than $6 million.

The long-established market for hip and knee implants is enormous. About 250,000 hip replacements and 600,000 knee replacements are performed in the U.S. every year. We are well on our way to becoming an Implant Nation, united by titanium and cobalt-chromium.

Despite these impressive figures, however, the number of hip and knee implants performed annually has flattened or declined in recent years, for several reasons. The cost of surgical implants has risen dramatically, reducing profit margins on inpatient procedures for doctors and hospitals, according to a report by Thomson Reuters. As a result, U.S. hospitals have become more dependent for profits on outpatient procedures.

The Great Recession dramatically reduced patient purchasing power. That, and reductions in Medicare payments, have reduced demand for hip and knee procedures.

Also, a widespread failure of metal-on-metal hip implants has led to major problems for patients, and lawsuits against hip implant manufacturers. According to an article by Barry Meier in the Dec. 27 New York Times, “the so-called metal-on-metal hips … ones in which a device’s ball and joint are made of metal, are failing at high rates within a few years instead of lasting 15 years or more, as artificial joints normally do. The wear of metal parts against each other is generating debris that is damaging tissue and, in some cases, crippling patients.” Meier said lawsuits and complaints against makers of all-metal replacement hips have passed the 5,000 mark.

Despite this bad news, the number of hip and knee implants in the U.S. has stabilized, and is growing in other countries. The global hip and knee implant market is forecast to grow 8 percent annually between 2009 and 2016, reaching $21.7 billion in 2016, according to a report by GlobalData. Driving the growth are aging populations and younger patients opting for surgery.

That’s good news for firms that manufacture microparts for these devices. And even better news is outlined in our excellent cover story, starting on page 36. It turns out that the market for small bone and joint implants (ankles, wrists and fingers) is experiencing double-digit growth. By 2017, the U.S. SBJ market is expected to grow to $2.4 billion, roughly double its current size, according to a report by iData Research Inc.

What’s more, about 75 percent of the companies making SBJ implants in the U.S. use contract manufacturers, according to Alan Taylor of Solana Surgical LLC, an SBJ implant maker. In the article, Taylor says most small-implant makers have no plans to develop their own part-manufacturing operations. They are looking for shops to make small lots of parts at first and supply larger lots later. Even big companies manufacturing SBJ implants are looking for manufacturing efficiencies of scale by outsourcing parts manufacturing.

Joint implants of all kinds are helping people live better lives. For manufacturers making microparts used in these devices, their processes may not be as dramatic as the derring-do of Steve Austin, but helping restore lost mobility and dexterity to millions of patients can be just as heroic. µ