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Low back pain, spine surgery and market shifts

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Low back pain (LBP) and degenerative spinal disc disorders are leading age-related causes of disability throughout the world
Global populations continue to age, and incidence rates of LBP and degenerative disc disorders continue to increase
Surgery has become a common therapy for the conditions and their incidence rates have risen sharply over the past two decades
This has fuelled a global US$10bn spinal implant and devices market
Spine surgeries tend to be paid for by working age populations
In wealthy spine markets working age cohorts are shrinking
This suggests spending levels on spine surgery will be squeezed
The knock-on effects of this are likely to put pressure on spine companies to adapt their strategies and business models

Low back pain and the global spine industry

Low back pain, spine surgery and market shifts

Low back pain (LBP) is a common age-related health condition associated with degenerative spinal disorders, and recognised by the World Health Organisation (WHO) as one of the top ten global disease burdens. In most wealthy nations, low birth rates and relatively high life expectancy have resulted in the number of working age people shrinking and the number of retirees with sedentary lifestyles increasing. This has led to a high prevalence of LBP and age-related spinal disorders.

First-line clinical guidelines for LBP recommend non-surgical treatments and encourage physicians to be cautious about surgical solutions. Diagnosing LBP is challenging, and doctors constantly contend with treatment dilemmas. However, over the past three decades spine surgery has become a significant therapy for LBP.

A common procedure used to treat a range of degenerative disc disorders, which present as LBP, is spinal fusion. This is a neurosurgical or orthopaedic surgical technique to permanently connect two or more vertebrae in your spine so that they heal into a single, solid bone. The procedure can be performed at any level in the spine and prevents any movement between the fused vertebrae. The technique is designed to mimic the normal healing process of broken bones.

In this Commentary

This Commentary suggests that as global populations have aged, so the incidence rates of LBP and degenerative disc disorders have increased and become a leading cause of age-related disability throughout the world. Spine surgery has become a common therapy for the conditions. This has fuelled a global spinal implant and devices market. Spine surgeries tend to be paid for by working age populations, which are shrinking in the wealthy spine markets of the world. This suggests that spending levels on spine surgeries will be squeezed and this will put pressure on spine companies to transform their strategies and business models.

The global burden of LBP

A series of three research papers on LBP and its associated disabilities published in the March 2018 edition of The Lancet estimate that ~0.54bn people worldwide are living with LBP, which has risen by more than 50% since 1990, and is projected to increase even more as the world's population ages and as populations in lower- and middle-income countries move to urban centres and adopt more sedentary lifestyles.

The importance given to treating LBP is because of the significant burden it inflicts on individuals, healthcare systems and productivity. The Global Burden of Disease Study 2017 suggests that LBP accounts for some of the highest numbers of disability-adjusted life years (DALYs) worldwide [DALY is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death].

According to the UK’s 2014 NHS National Pathfinder Study, LBP is responsible for the loss of 2,313 DALYs per 100,000. This is a substantially higher ratio than the remainder of musculoskeletal conditions (911), depression (704) and diabetes (337) combined, and accounts for 11% of the overall disability burden from all diseases in the UK, where the burden of LBP is on the increase both in absolute (~3.7%) and proportionate (~7 to 8.5%) terms. The increased prevalence of LBP creates added demand and escalating costs for NHS England, estimated to be >£12.3bn (US$17bn) per year.

A 2012 study published in The Spine Journal suggests that LBP accounts for >3% of all visits to A&E in the US and estimates that each year, “>2m episodes of LBP occur among an at risk population of over 1.48bn person-years for an incidence rate of 1.39 per 1,000 person-years”. Findings of a 2016 study suggest that, “US adults with LBP are socioeconomically disadvantaged, make frequent healthcare visits and are often covered by government-sponsored health insurance”. The US Bureau of the Census estimates that, each year, LBP costs Americans ~US$50bn in healthcare costs. If you add in lost wages and decreased productivity, this figure easily rises to >US$100bn.

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Age of the aged and low back pain

LBP and degenerative spinal disorders

In the video below Ranj Bhangoo, a consultant neurosurgeon at King’s College Hospital, London explains how LBP and degenerative disc disorders are overwhelmingly the result of normal wear and tear, which occur over time as you grow older. Years of constant use and absorbing daily shocks take their toll, which suggests that, sometime during your lifetime, you will suffer from LBP. In most cases, it is not your spinal vertebrae that experience the effects of the wear and tear, but the 23 cartilage-based structures (discs), which sit between your vertebrae. These are filled with a jelly-like substance and act as shock absorbers, help to hold your vertebrae together and facilitate slight mobility in your spine. As you age, your discs lose their jelly-like substance, start to crack, and begin to naturally degenerate. This is believed to manifest itself as LBP, which can radiate down your leg and cause a condition called sciatica.

Spine surgery

If you are over 50, suffer from LBP, live in the US, Europe, or Japan, and have medical insurance, it is likely that during your lifetime you will have surgery to reduce your pain following a period of a non-surgical therapy. Scientific evidence supports surgery in a select group of patients who have failed to respond to non-operative treatments over a minimum of six months. However, a significant percentage of spine operations fail to relieve back pain and between 10% and 46% of primary spine procedures require revision surgeries.

In the video below, Ranj Bhangoo describes the care taken by clinicians not to rush into surgery for LBP. When a patient presents with back pain, it is important to ask three questions: “Is the history of the pain compatible with a particular disc causing that pain? Does an examination suggest that a particular disc is causing the problem? Does a scan show that the disc you thought was the problem is the problem? If the answers ‘fit”, then there might be benefit in considering some treatment options, but not necessarily surgery. . . . . . Because 90% of us will get back pain at some point in our lives, 90% of us don’t need an operation”, says Bhangoo, whose opinion resonates with that of the Mayo Clinic: “Back surgery can help relieve some causes of back pain, but it’s rarely necessary,” and although “back pain is extremely common, surgery often fails to relieve it”.

Clinical dilemmas

Although first line clinical guidelines recommend non-surgical treatments for LBP and degenerative disc disorders and clinicians are cautious about possible treatment options, over the past three decades surgery has become a relatively common therapy for LBP and has fuelled a global spinal implant and devices market. The Lancet’s 2018 studies on LBP suggest that, “gaps between evidence and practice exist, with limited use of recommended first-line (non-surgical) treatments and inappropriately high use of surgery”.

However, the nature of evidence underpinning the use of non-surgical treatments for LBP does not help clinicians in their choice of therapies. A research paper, published in the March 2020 edition of the BMC Medical Journal, critically appraises the current evidence for non-surgical therapies for LBP and concludes that while, “pain management services may be cost effective for the management of low back pain the quality of evidence is variable”.

Spinal fusion

Spinal fusion is a common surgical therapy for a number of spinal disorders, some of which may present as LBP and include: (i) degenerative disc disease, which occurs when one or more of your discs between your vertebrae deteriorate and cause pain, (ii) spondylolisthesis, which occurs when one of your lower vertebrae slips forward onto the bone directly beneath it, (iii) spinal stenosis, a narrowing of the spaces within your spine, most often in your lower back and neck, which can put pressure on the nerves that travel through your spine, (iv) kyphosis, a spinal disorder in which an excessive outward curve of your spine results in an abnormal rounding of your upper back, and (v) scoliosis, which is a sideways curvature of your spine.

Despite being a common procedure, spinal fusion is a major surgery, which can be associated with significant morbidity and occasionally with mortality. In the video below Nick Thomas, a consultant neurosurgeon at King’s College Hospital, London, describes spinal fusion, which in certain circumstances, may be beneficial in improving pain.

Incidence rates of spinal fusion increasing

According to findings published in the March 2019 edition of the journal Spine, >2m spinal fusions were performed in the US in 2015. This represented an increase of 32% since 2004, with the largest increase (73%) among patients ≥65. Outcomes of spinal fusion procedures vary depending on the condition for which the surgery is performed. When performed for spinal deformities and spondylolisthesis, reported outcomes are generally favourable. However, the success rate of spinal fusion as a therapy for LBP and degenerative disc disorders is patchy.

Evolving techniques

Given these uncertainties, emphasis has been given to several evolving techniques such as interbody fusion and lumbar disc arthroplasty, which are more complex, technically demanding, and higher risk types of fusion. The former procedure involves removing your intervertebral disc and joining two or more vertebrae together using screws and interbody spine cages. These are hollow threaded cylindrical implants commonly constructed of polyetheretherketone (PEEK) and titanium, which have desirable biocompatibility and mechanical properties. Cages are filled with bone graft, and eventually become part of your spine.

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The latter procedure replaces a damaged spinal disc with an artificial one designed to support your vertebrae while preserving motion. These, and other hybrid techniques, are still relatively novel procedures despite promising near-term outcomes. Long-term studies demonstrating their superiority over traditional spinal fusion are required before they may be recommended to replace traditional fusion as the gold standard.

Further, recent scientific advances have allowed clinicians to explore innovative stem cell therapies in spinal fusion procedures in attempts to reduce morbidity and compensate for the limitations of autografts. However, results of research have not yet been translated into common practices to treat patients.

The incidence rates of spine surgery in the US

The US has the highest rate of spine surgeries in the world. In the 1980s rates increased by 55%. In the 1990s studies of spine surgery rates became more challenging because >20% of common spine procedures shifted to out-patient settings. Extrapolations from ambulatory surgical data suggest that throughout the 1990s, spine surgery rates continued to rise. The most rapid increase was for spinal fusion, which tripled during the decade and accounted for an increasing proportion of all spine procedures.

Since the 1990s, numerous studies have described the continued growth of spine surgery in the US, where today ~1.6m spine procedures are performed annually. Between 2004 and 2015, the volume of spinal fusions increased by 62%. During this 12-year period, aggregate hospital costs increased 177%, exceeding US$10bn in 2015 and averaging >US$50,000 per admission. A 1994 international comparative study found that, “the rate of back surgery in the US was at least 40% higher than in any other country and was more than five times that in England. Back surgery rates increased almost linearly with the per capita supply of orthopaedic and neurosurgeons in the country”.

The spinal implant and devices market

Over the past four decades, the high and increasing prevalence of spine surgeries has contributed to a high margin, profitable, global spinal implant and devices industry, comprised of ~400 companies but dominated by just four large American corporations: Medtronic, DePuy Synthes (Johnson & Johnson), NuVasive and Stryker. These four control ~70% of the market, which in 2019 was valued at ~US$10.3bn, projected to grow at a compound annual growth rate (CAGR) of ~5%, and reach ~US$14bn by 2025. The US market segment alone was valued in 2020 at ~US$7.5bn, growing at a CAGR of 5.3% and expected to reach ~US10bn by 2025.

These spine market numbers include revenue from implants, instruments, and surgical assistance systems (robotics and navigation) to treat a variety of conditions. The industry has benefitted from advances in spine surgery technologies, the launch of novel bone grafting products and the increasing adoption of minimally invasive spine surgery (MISS). However, spinal fusion devices are the second largest segment of spine products behind plates and screws.

As a possible consequence of the industry’s rapid growth and relatively high margins, many spine companies have come to rely on linear supply chains and developed “cosy labour-intensive relationships” between producers, clinicians, hospitals, and payors. However, the high cost of spine surgery, tightening regulations and more stringent reimbursement policies threaten this business model.

Good news for spine companies

We know that age-related LBP and degenerative spinal disorders are significantly correlated to the incidence rates of spine surgery. The good news for the spine market is that, “virtually every country in the world is experiencing growth in the number and proportion of older persons in their populations”, and global life expectancy is rising and is expected to reach 77 years by 2050, up from 70 in 2015. The number of people ≥65, who account for most incidence of spine surgeries, is expected to increase by >60% in the next decade, from just >0.6bn in 2015 to ~1bn by 2030. A study published in the March 2020 edition of the Journal of the American Medical Association (JAMA) suggests that between 1996 and 2016, Americans spent ~US$134bn on therapies for back pain, which is more than that spent on the combined treatments for diabetes and heart disease.

Bad news for spine companies

Working age populations in the US and other spine markets ‘pay’ for the surgeries of the large and growing cohorts of retirees with sedentary lifestyles and LBP. However, working aged populations in these regions are declining because of falling fertility rates and professional women delaying motherhood. This suggests, ceteris paribus, that for the foreseeable future, a shrinking pool of working-age people will be forced to support expensive spine surgeries for a vast and rapidly expanding cohort of aging retirees. Thus, it seems reasonable to suggest that the current trajectory of spending on spine surgeries in the major spine markets of the world is unsustainable, and increasingly, likely to exert downward fiscal pressure on spine companies.

Changing ecosystem

Such demographic trends are already exerting pressure on the spine market to deliver enhanced clinical outcomes at lower costs. For example, US reimbursement policies have moved away from a fee-for-service model towards a value-based model, which aims to utilize resources more efficiently by shifting the costs of over-treatment, revision surgeries and adverse clinical outcomes from payors to providers. Similar shifts are taking place in Europe and Japan. For example, in Europe fiscal pressure on healthcare systems has meant rationing and/or delaying elective spine surgeries. In Japan, more spine surgery costs are being shifted to employers and patients.

Population effectiveness

In wealthy spine markets decisions that used to be the sole preserve of doctors are increasingly being made by regulators, hospital administrators and other non-clinicians. This broader set of influencers have different objectives to doctors and prioritize cost effectiveness or even just costs. This is fuelling a shift away from individual patient outcomes towards a focus on the cost effectiveness of specific spine procedures on a given population. For example, the overall improvement within a cohort of patients ≥65 with LBP and degenerative disc disorders and a given level of spending by a hospital group on spinal fusions.

Innovations increasing in significance

Such shifts have encouraged innovations, which enhance outcomes and are positioned to change the standard of spine care. These include, minimally invasive spine surgery (MISS), robotics, computer assisted navigation, motion preserving technologies, and ortho-biologics, which will be discussed in future Commentaries. For now, let us finish by suggesting that such innovations could erode the competitiveness of traditional spine companies that are slow to change, and enhance the competitiveness of companies with the mindset, resources, and capabilities to invest in these evolving technologies.

Takeaways

Fiscal, technological, and demographic trends are driving the demand for competitively priced spinal implants and devices. Cost conscious US hospitals have consolidated to increase their buying power. Purchasing has become more centralized as hospital groups have leveraged their scale by standardizing processes and procedures across facilities. Providers have sharpened their focus on the cost effectiveness of spinal implants and devices and engaged in M&A activities to enhance their scale, R&D, and marketing. This has expanded the range of product offerings a single company supplies, but also it has increased market concentration, which advantages a few large dominant companies. The effect of these trends has yet to transform the strategies and business models of the overwhelming majority of traditional medium to small size spine companies, which will be needed for them to remain relevant in the future.

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Low back pain, spine surgery and market shifts

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