Each year the American Academy of Orthopaedic Surgery

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Each year the American Academy of Orthopaedic Surgery (AAOS) holds their annual meeting in one of the largest convention facilities in the United States. The attendance at these meetings numbers over 15,000 participants and draws physicians from all over the world. For over 20 years, this association meeting has been a major location for suppliers of products that are used in orthopedic surgery to display their wares. Surgeons have been an important member of every medical staff in that not only is orthopedic surgery common at community and tertiary hospitals, but the reimbursements for these procedures are strong. For decades, the orthopedic surgeon has been the gatekeeper and the influence of the purchaser. After a recent AAOS annual meeting, several members of the marketing and sales group of a major orthopedic device manufacturer gathered to debrief their experience at the meeting. The debrief included the division vice president of marketing, the director of sales representatives who attended the meeting, and the head of hospital sales, along with the director of hospital group purchasing alliance. They discussed what they had learned in their 4 days at the meeting. The new fiscal year was a few months away and the March AAOS meetings often caused them to revise their sales forecasts and further refine their strategy. “How so,” said the head of hospital sales, “I think I saw every orthopedic surgeon I knew and AAOS set attendance records.” “Yes, I agree”, said the head of alliance purchasing, “the market is changing and the doctors were pretty clear about it and not too happy about the changes. From what I hear the days of them just saying they can call the shots about any device from any manufacturer is over. Hospitals are pretty clearly looking to control inventory by narrowing the range of options. If our hip or artificial knee is not one of the two or three on the approved list, it won’t matter if the surgeon likes it.” “Well, what about our brand name? Does that matter anymore? All we have done for 30 years is spend money in trade publications, be at trade booths, spend time in the operating room with doctors, is it all for nothing?” “How do we get control of this situation?” Discuss what is occurring and experienced in this situation is the growing strength of a buyer who is now gaining control of a market and taking away the influence of a key industrial influencer. Another key concept that can be highlighted in this case is whether the device manufacturer wants to begin to try to shift from a hospital push strategy (through the orthopedic surgeons) to possibly create any sort of a pull strategy among patients who are need this surgery. Is it possible for an implantable device or is this a commodity good? Who has the power in this situation? Is it the physician? Hospital purchasing alliance? Supplier? What is the source of power?

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