Smith and Nephew’s Syncera Strategy: Death of a Salesman

Smith and Nephew’s 2014 earnings call earlier this month confirmed what we’ve heard before that their no frills. Syncera line pilot program was deemed a success and will be launched in new geographies this year as discussed in this post.

When Smith and Nephew unveiled their new Syncera line in August 2014, many in the industry were skeptical that such a strategy could pay off. Syncera , a no frills hip and knee implant line was aiming to target 5 to 10% of US hospitals by slashing the prices of implants in half. In order to achieve such savings without sacrificing profit margins, Smith and Nephew was getting rid of one of the cornerstones of modern orthopedic sales, the OR technician. The OR technician would be replaced with an iPad, no less. Many in the industry were surprised, and dubious that such a strategy could pay off.

Though the large joint implant industry has not spiraled into an Arthur Miller tragedy, the bells for the death or at least decline – of the OR rep may be beginning to toll, and arguably have been for some time.  Smith and Nephew’s pilot launch of Syncera has seemingly been successful so far, though CEO Oliver Bohoun has said they won’t release concrete numbers until after the end of the second quarter this year. However, he also said that Smith and Nephew is seeing profits equivalent with the classic old-style business. That, and the geographic expansion into Australia, New Zealand and parts of the European Union, all seem like positive steps in the right direction.

In a time when device purchasing power is increasingly leaving the hands of the surgeon, it stands to reason that a selling model allowing you to have the brand name implants without the brand name prices has opportunity to succeed, in cost-conscious hospitals at least.

While this is certainly not a revolution, it is as Bouhoun himself said disruptive to the current commercial model of orthopedic sales. Syncera may not replace the current system, but it will certainly catch the attention of industry insiders and hospital purchasers.

I know I am looking forward to Smith and Nephew’s update after July this year, and I don’t think I’m the only one.