Welcome to the archives for NewsTalk, an IBJ blog published from November 2007 through December 2010.

BioCrossroads / Medical Devices / Health Care & Life Sciences / Life Science & Biotech

A beachhead in Warsaw

September 16, 2009

One of the not-so-secret secrets to Warsaw’s astounding success is the fierce competition among the three major orthopedics companies headquartered in the northern Indiana town.

Rivalry among Zimmer, DePuy and Biomet is intense—really intense. So much so that folks in the industry speak quietly in social settings to avoid tipping off competitors. Just about everyone in the town of 13,000 who isn’t flipping burgers or selling tires works for the big three and their suppliers, or for the Medtronic plant, which also makes implants.

So it comes as something of a surprise that BioCrossroads, the not-for-profit that promotes life sciences in central Indiana, was able to get the players to agree to start their own promotional group in Warsaw.

OrthoWorx, which was recommended publicly last week but hasn't formally launched, will help improve technology and try to stop the federal government from crimping reimbursements to hospitals and other health care providers for hip and knee replacements.

This isn’t a small thing. The Warsaw companies have worked together on fundraisers, and they have a lobbying group. But they haven’t cooperated on much else over the years. They keep an independent distance not only because of the competition, but personalities sometimes clash, and they also need to avoid the appearance of price-fixing and other collusion.

Dane Miller, who founded Biomet and remains a director, thinks OrthoWorx will succeed if it avoids even the appearance of favoring a particular company. Miller is still smarting from Zimmer’s nailing a state technology grant a few years ago to work with Indiana and Purdue universities and the University of Notre Dame. Biomet applied but got nothing.

“It’s tricky, certainly. But I think it’s doable,” says Miller, who was consulted about OrthoWorx. “We will work hard to be fair and not to let our competitive impulses get in the way of the organization.”

How do you feel about competition so severe that the parties sometimes can barely talk to each other? Is it productive in the long run?

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