Biomet Gains Hinge on Old Standby

When some people look at implant makers like Biomet (BMET) and Zimmer (ZMH), they see a lot to complain about.

Every year, the medical device companies promote new joint implants and surgical techniques aimed at improving hip and knee replacements. Industry-sponsored studies typically show a high success rate for the new procedures.

But critics say the industry is merely creating the illusion of success by controlling scientific research and avoiding steps that would pool independent data on surgery outcomes. These people say the industry has been miserly in its research-and-development spending, and that as a result implant science has advanced little in four decades. Yet even amid these questions about how well their devices work, the companies continue to make a bundle.

"Industry is proposing new designs and new technologies almost every day, with increasing costs," Italian physician Paolo Gallinaro wrote in the journal Orthopedics this year. "However, no real progress has been made."

Zimmer didn't immediately return a call seeking comment, but Biomet's founding CEO, Dane Miller, rejects the notion that the companies have fallen short. He defends the durability and usefulness of his company's products, as well as the industry's stance on data sharing.

Nonetheless George Cipolletti, who once oversaw knee implant research for Johnson & Johnson (JNJ), holds a similar view to Gallinaro's.

"We all sell our products, to some extent, based on unsubstantiated premises," says Cipolletti, who, together with two other Johnson & Johnson alums, now runs a competing company, closely held Apex Surgical. "If we had to base it on clinical data, there would be a lot fewer designs out there."

In this fourth of five articles exploring apparent conflicts of interest in the medical business, TheStreet.com looks at the implant industry's marketing-intensive focus -- and the costs borne by patients and taxpayers alike.