Biologics: The Wild West of physician preference items

In American history, the mythical “Wild West” was a place of cowboys, outlaws, gunslingers, and gamblers, where territories were untamed and lawlessness seemingly ruled.

What does this have to do with biologics? In many aspects, there is a similar “Wild West” nature to biologic tissues (“biologics”) — tissue harvested from human systems that is used in implantation procedures to repair damaged tissue. Many of those who negotiate contractual terms for biologics, manage supply chains, or even use the implants do not have a clear enough understanding of biologics to fully assess the value their organizations are getting for their “purchase price” (technically, a service fee charged for obtaining, processing, cleansing, and shipping the donated human biologics).

The problem is that biologics are often marketed touting certain benefits that sound impressive, but are rarely backed by peer reviewed third party clinical outcomes evidence which is not funded by the supplier. What these “benefits” may come with, however, is a hefty price.

Insufficient knowledge of the biologics category can result in thousands of dollars in overspend for supply chains in hospitals and health systems of all sizes. Based on a representative sample of biologics costs at 60 hospitals from various health systems nationwide, annual rate increases can be anywhere from 15 to 40 percent for biologics products that are not well managed and as high as 15 percent even for those that are well managed.

The issue can also negatively impact hospital margins. For the last several years some insurance companies have been increasingly reducing or even denying payment for expensive biologics products, such as cell-based matrices, that have insufficient evidence of improved outcomes according to payer statistical data. Hospitals and health systems are then left with the expense of high-priced products, without payment for them.

The question is: In this age of value and transparency, why not expect the same when purchasing biologics?

Buyer beware

The problem is that the terminology used in the marketing of biologics can be confusing and misleading. A few examples:

Faster bone growth: Some biologics are marketed as promoting cell function for faster healing time--but, what is the true value of this marketed benefit? Bone formation takes 5 to 18 months--even for perfectly healthy bone. “Faster bone growth” claims may be technically true because specifics are often missing. But, don’t be fooled by claims that tout faster bone healing-- the healing times are all in the same range.

Cleansing process.

Cleansing process. All donated tissue is processed at one of about a dozen major tissue processing houses nationwide. The tissue is screened, cleansed, processed, and packaged according to rules by the American Association of Tissue Banks and then sold or distributed to vendors. Some vendors market the tissue as having gone through a patented cleansing process. (One common patented process is known as Allowash.) However, it's been demonstrated that a non-proprietary cleansing process performs just as well as patented processes.[i] Vendors are not required to disclose the methods used in their proprietary cleansing process; however many marketing claims suggest a superior cleansing process, when it fact it may vary little from a non-proprietary method.

Cells vs. factors: There is debate within research circles and among surgeons as to what best triggers the bone healing process. Some contend that the process of attracting new cells (e.g., osteogenic, osteoinductive, or osteoconductive) is what starts the healing process. Others believe it’s the provision of factors (e.g., calcium, vitamins, hormones, etc.)  at the source of injury of a bone that triggers healing. (It has been shown that both cells and factors improve healing over a controlled standard not containing either.[ii]) A biologic may be marketed as offering a benefit because it employs cells over factors, or vice versa, when in fact the debate over which triggers healing and how much it helps continues. The point at which the surgeon believes is most important to jump start the bone healing process will drive the biologics preference.

Cell type/count. Some vendors provide a cell count and a range of the types of cells included in their biologics products. It's important to understand the types of cells they are and how they relate to what needs to be accomplished, especially if the goal is to use a targeted cell for a specific application, such as a spinal fusion. Osteoblasts, for example, are the most important cell (although not the only type) to contribute to bone healing.[iii] If osteoblasts were used on skin grafts, for example, the osteoblasts would have no effect. Non-osteoblasts on the other hand have little to do with the bone healing process.  The process of cryofreezing bone tissue is relatively inexpensive and results in a large spread of viable cells that are untargeted. If a vendor, therefore, can’t provide a list of both cell count and types of cells, it’s best to assume that the cells are not related to the healing process.

Cryopreserved. Frozen tissue can preserve cells to an extent, but the percentage of implanted cells that remain viable is actually unknown. Cryopreserved tissue, however, is sometimes marketed as having the ability to enhance bone healing because “x” percent of cells are preserved. The freezing process actually costs the same as other processing methods, but prices of cryopreserved tissue are often higher. In addition, onsite freezer maintenance is costly for hospitals if nothing else is being stored in the freezer.

Dosage. A CC (cubic centimeter) size—such as 1, 2.5, 5, or 10--should have the same price for the same type of base tissue used. It shouldn’t matter if the tissue was formed into a strip, pressed into a tube, or rolled into fibers. A 1 CC strip of tissue should be the same price as a 1 CC of gel from a tube or 1 CC of fiber.

Buyer be educated

Supply chain, materials, and contract managers should be able to better understand terminology and separate what may be marketing hype from the tested benefits that biologics products offer. Tooled with such knowledge, contract managers, for example, can negotiate more favorable prices and keep rate increases to a more manageable level.

Thoughtful consideration should be given to:

· Pricing: What value does the supply dollar get for this product? Why is this biologic more expensive than that biologic? Is the price differential worth it? Is the advertised benefit backed by scientific data?

· Selection criteria: Is there a hospital or system wide criteria or documentation for implanting cell based biologics or BMP (bone morphogenetic protein)? If not, it might be time to discuss with your physicians under what clinical criteria it’s reasonable to use these more expensive products, and then implement a formal selection criteria.

· Alternatives to biologics: Autograft tissue (patient harvested tissue) was used before tissues were harvested from non-patient sources. This type of implant may still be an option. An important consideration for any hospital is: What is the criteria that stops surgeons from using autograft?

Delivering value

Taking the time to understand the nuances of biologics terminology can be time consuming, not to mention frustrating. Resources are available to aide in this education. In some cases, supply chain staff need look no further than their own hospitals. An orthopedic or spine surgeon or a service line administrator who has the time and willingness can be an excellent resource for better understanding the biologics category.

Such efforts will prove to be timely and worthwhile. Payers, including federal, third party, and increasingly consumers are questioning the value they receive for their healthcare dollars. Better understanding biologics products can help supply chain and materials managers and finance managers tame the “Wild West” nature of biologics in order to prevent needless expense and deliver the value the market desires.

[1] (Musculoskeletal Transplant Foundation, "Advanced Tissue Processing: Development of a Cleaning Process for Allograft Bone,")

[1] National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (https://www.ncbi.nlm.nih.gov/pubmed/24278952).

[1] National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4515490/).