COVID-19 Resource Center

COVID-19 Resource Center

April 23, 2020
7 min read
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Orthopedic industry, regulators deal with effects of COVID-19 pandemic

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By no means has it been business as usual for the orthopedic surgery industry amid the COVID-19 pandemic. Companies, regulatory agencies and other organizations have had to respond to the COVID-19 pandemic in myriad ways that have required them to be innovative and more business savvy than ever.

Some orthopedic manufacturers have offered needed assistance to health care professionals in the United States who are treating patients with COVID-19.

On April 10, Arthrex officials said in a press release: “As the virus became a serious threat, we directed our engineers to design technology that would offer additional assistance to our health care professionals treating COVID-19 patients. Utilizing Arthrex product design and manufacturing capabilities, we are moving forward to develop urgently needed [personal protective equipment] PPE products to help protect caregivers on the frontline.”
Those efforts turned into what the company described in a press release dated April 17 as PPE manufactured for health care systems and first responders in southwest Florida where Arthrex is based, including production of up to 2,500 reusable protective face shields per week now underway at its Ave Maria, Florida manufacturing facility.

“We are proud to support health care providers and contribute to our community’s response to the COVID-19 pandemic in a meaningful way,” Christopher Adams, MD, Arthrex vice president of global medical education, said in the release. “The collective commitment to empower and care for those affected by this pandemic is inspiring to everyone at Arthrex who believes in our core value of making people better.”

Arthrex has also started manufacturing transparent plexiglass hoods to protect health care providers during procedures, including intubation, according to the release.

In an email to health care professionals on April 9, Arthrex said the company has remained at full capacity due to comprehensive workplace environment COVID-19 precautionary measures and extensive protection of its more than 2,000 manufacturing and logistics employees.

“In accordance with the new elective surgery guidelines of the American Academy of Orthopaedic Surgeons, our primary focus will be providing surgical products and service support for AAOS-defined acute orthopedic procedures that should be performed, ideally in an outpatient facility,” according to the email.
In a Q&A at the website of Johnson & Johnson, Kathy Wengel, executive vice president and chief global supply chain officer of Johnson & Johnson, said the company is “taking all possible measures to maximize product availability across our over-the-counter medicine portfolio, including Tylenol.

“The medication is trusted by consumers to reduce fever, and we are shipping our stock in a controlled manner so that we can reach as many people as possible during this public health emergency. Our manufacturing sites have increased production and are running 24/7 to maximize availability,” Wengel said.

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On April 14, when it announced its 2020 first-quarter results, Johnson & Johnson also announced its board of directors declared a 6.3% increase in the quarterly dividend rate, from $0.95 per share to $1.01 per share. At the new rate, the indicated dividend on an annual basis is $4.04 per share compared to the previous rate of $3.80 per share.

“With Johnson & Johnson’s century-plus history of leading in times of great challenge, we are mobilizing our resources across the company in the fight against the COVID-19 pandemic,” Alex Gorsky, chair and CEO of Johnson & Johnson, said in the release. “Johnson & Johnson is built for times like this, and we are leveraging our scientific expertise, operational scale and financial strength in the effort to advance the work on our lead COVID-19 vaccine candidate. We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use.”

According to the release, medical devices worldwide operational sales, which excludes the net impact of acquisitions and divestitures, declined by 4.8% in the first quarter of 2020. This, as was noted in the release, was driven by the estimated net negative impact of the COVID-19 pandemic and associated deferral of medical procedures to the company’s surgery, orthopedics and other medical device-related businesses.

Some orthopedic manufacturers, like Smith & Nephew, have had to adjust the timing and content of some of its financial announcements due to the COVID-19 pandemic.

In a March 30 statement, Smith & Nephew said it withdrew its full-year financial guidance issued on February 20 due to rapid expansion of the coronavirus beyond China. In the statement, officials noted the guidance assumed the COVID-19 outbreak would normalize early in the second quarter.

“Overall, it is too early to determine the consequent impact of the COVID-19 pandemic on our business. In China elective procedures have restarted, but currently remain considerably below pre-outbreak levels. In Europe and the U.S. a range of policy responses are now being implemented, including stopping all but the most urgent surgical procedures. It is difficult to determine how long the situation will last, the speed of normalization thereafter, and the timing of catch-up of postponed procedures,” according to the statement. “Given this ongoing uncertainty, we will not update 2020 guidance until the effect of COVID-19 becomes clearer.”

The company said it plans to report first-quarter trading results on May 6 and expects revenue growth for that quarter to be down about -8% compared with the first quarter of last year. “We also expect that second-quarter revenue and first half trading margin will be substantially down on the prior year.

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“In February Smith & Nephew initiated actions to realize significant savings from areas such as travel, events, advertising, promotion and consultancy, as well as freezing all but the most crucial new hires and slowing some planned capital expenditure,” according to the statement.

 

Regulatory agencies adjust

Under normal circumstances, through FDA clearances and approvals, the orthopedic industry furthers its mission to bring products and services to market that help treat patients with musculoskeletal conditions and provide them with therapeutic and rehabilitation options. In that vein, some premarket notification 501(k) clearances have continued to be announced during the COVID-19 pandemic.

For example, Centinel Spine announced on April 14 the FDA approval of two-level indications for its Prodisc L Lumbar Total Disc Replacement System.

MPH Director, Office of Product Evaluation and Quality Center for Devices and Radiological Health (CDRH) of the FDA William Maisel, MD, sent a letter on April 4 to the U.S. medical device industry saying CDRH has taken steps to prioritize any work that advances the national response during this national emergency, and these steps impact day-to-day operations of the CDRH and the medical device industry.

In the letter, which updated policies he first communicated to industry in a letter on March 23, 2020, Maisel noted in-person meetings with industry through May 31 are being converted, when possible, to teleconferences being held the same day and time as the originally scheduled meeting. He also said response dates for marketing applications that were due on or before June 30 are further extended by 90 days for 510(k)s, premarket approval applications or PMAs, including original and supplements PMA applications, as well as de novo classification requests and any type of humanitarian device exemption application.

An open meeting of the FDA Orthopaedic and Rehabilitation Devices Panel of the Medical Devices Advisory Committee that was scheduled for April 23-24 was canceled on March 17 in light of the COVID-19 pandemic. During the 2 days, the panel was to have discussed and made recommendations for classification and/or reclassification actions for facet screws systems and noninvasive bone growth stimulators The announcement said other planned discussions were to have focused on semiconstrained metatarsophalangeal joint prostheses and intracompartmental pressure monitors.

Regarding FDA device approval meetings, in general, “we are canceling or postponing all non-essential meetings through the month of April. We will reassess on an ongoing basis for future months. Where possible the agency will leverage technology to host meetings allowing for remote participation,” according to the announcement.

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On April 21, the FDA postponed until further notice the Medical Device User Fee Amendments for Fiscal Years 2023 Through 2027 public meeting that was scheduled to take place May 5 to discuss proposed reauthorization of the user fee amendments. FDA said in its announcement it was still accepting written or emailed comments on the medical device user fee program.

 

Medical device regulations in Europe

On April 3, the European Commission (EC) adopted a proposal to postpone for 1 year the application of the Medical Device Regulation in the European Union. The rules, which impact medical product development, were set to be mandatory starting May 26.

In a press release from the EC, Margaritis Schinas, EC vice president for promoting our European way of life, said, “Shortages or delays in getting key medical devices certified and on the market are not an option right now. The commission is therefore taking a pragmatic approach and delaying the entry into application of new EU rules on medical devices, so we can have our medical industries pouring all their energy into what we need them to be doing: helping fight the pandemic.”

 

Move from live to online

In its April 9 email, Arthrex also said the company’s cadaveric surgical skills wet lab education programs have temporarily been replaced with live virtual medical education presentations.

Annual shareholder meetings for many orthopedic companies have been moved from being held live to virtual platforms. On March 24, Stryker announced in a press release its annual shareholder meeting on May 5 would be held virtually via the internet “due to concerns regarding the coronavirus outbreak and to assist in protecting the health and well-being of our shareholders and employees.”

Companies in the orthopedic industry employ many individuals worldwide during normal times. However, because these are not normal times, some firms have resorted to new measures now available to them to accommodate their workforce, as needed, during the COVID-19 pandemic.

For example, in late March, Conformis announced the furlough of a significant portion of its direct workforce. On April 20, the company announced in a press release it received $4.7 million under the U.S. Small Business Administration Paycheck Protection Program (PPP). Conformis then announced in a press release on April 23, the PPP loan it received facilitates faster return to employment of most of the employees who were furloughed on March 23, possibly as early as April 27.

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“I am very pleased to report that, because of the federal government’s CARES Act and, specifically, the PPP loan we received, we are able to return our employees to work,” Mark Augusti, president and CEO of Conformis, said in the April 23 release. “In addition, we have started to receive indications that elective surgeries in the United States may return slightly sooner than expected, especially in ambulatory surgical or outpatient centers, as noted by the government’s phase 1 guidelines for ‘Opening Up America Again.’ We believe that our proprietary approach to total joint replacement is uniquely suited for efficiently handling these outpatient cases.”

Augusti added, “The ongoing and future effects of the coronavirus pandemic are unpredictable and continue to evolve, but we believe that the actions we are taking are necessary and appropriate both for our employees and for preparing to serve our customers and patients as America gets back to business.” – by Susan M. Rapp