New! Orthopedic Device Distribution Report
BY EDITOR, SEPTEMBER 19, 2005
February 2010 update: This report is no longer available for purchase. Learn more here.
We're happy to announce publication of the next in our series of monthly orthopedic industry reports.
Devices, Dollars and Distribution
Orthopedic Sales Backgrounder and Distribution Model Comparison
Available for immediate download for $179.
Our Distribution report is a complete backgrounder on the role of orthopedic salespeople, and the various independent and direct sales models. It includes a quantitative analysis of company performance, broken down by channel strategy.
(Also: find out why a salesperson might lead your best customers to use a competitor's device, and what you can do about it.)
Q&A with the Author
Q: What's your sales background?
A: I worked for an independent distributor for two years. For a majority of that time we represented Wright Medical.
Q: Why did you write this report?
A: Both the role of a sales person and the value in creating the correct distribution network for your organization are two aspects of the orthopedic industry which I believe are overlooked by a majority of individuals. The report is meant to shed light on sales and distribution individuals, the value they create, and the importance of choosing the appropriate network for your organization. The report also uncovers some of the recent trends in orthopedic distribution networks including sector and geographic preferences.
Q: Who should read it?
A: Investors who are looking for a good background regarding distribution trends and the value they create. CEOs will find the case study informative, providing some significant food for thought. Surgeons will find the report useful when determining which company they may want to align themselves with.
Q: What should a device company CEO think about as he evaluates his firm's distribution strategy?
A: The key question a CEO must answer is which distribution model will create the most value for his or her firm at a cost that they can afford. They also need to consider if it is worth raising money or investing more money to develop a specific model.
About the Author
John Chopack is an experienced professional in the orthopedic device industry. He has direct orthopedic industry experience including: (i) Biologic Specialist for Wright Medical Group, (ii) Sales Associate in orthopedic products for independent distributor representing Wright Medical Group and Encore Medical, (iii) Orthopedic internship with Dr. Robert Ruggiero. His orthopedic work experience focused on conducting an IDE clinical study for ceramic-on-ceramic total hip arthroplasty. Prior to joining the Research team at HealthpointCapital, Mr. Chopack worked on Wall Street as a medical device analyst.
Table of Contents
Introduction
A Note on Terminology
All About Orthopedic Salespeople
What's in a Good Salesperson's Bones
Salesperson Job One: Selling
Salesperson Job Two: Account Service
Salesperson - Surgeon Collaboration
Orthopedic Distribution Models Described
Recent History
Model #1: Independent Sales Representatives
Model #2: Direct Sales Force
Model #2 1/2: Hybrid
Model #3: Third Party Distribution Agreements
Which Model Does Each Orthopedic Sector Prefer?
Hip and Knee
Spine
Trauma
Sports Medicine
Biologics
Geographic Preference in Distribution Models
United States
Outside the United States
Head-to-Head Analysis: Independent vs. Direct
Pros and Cons of Independent Distribution
Why Go Direct?
Third Party Distribution
Transitioning from One Model to Another: An Illustration
Case Study: Interpore vs. Kyphon
Interpore Cross and Independent Reps
Kyphon and Their Sales Force
Case Study Takeaway
What About the Broader Orthopedic Public Market?
Advice for Device Firms Evaluating Their Sales Distribution
Seven Trends and Conclusions
Diagrams
Advantages & Disadvantages of Distribution Models for the Orthopedic Company
Going Direct: Cheaper as You Get Bigger?
Interpore Cross - Independent Distribution
Kyphon Case Study - Distribution Development
Analysis of the Broader Orthopedic Market
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