Medical devices and man-made materials have achieved major advances over recent decades. However, a new drumbeat is sounding in healthcare, as the steady growth in the use of biologics in medical procedures is gaining traction. Man-made materials will always have a place in the case of acute trauma, but biologics have the potential to take over as the most effective solution for degenerative conditions. There is understandable tension between the philosophies of “repair” versus “regenerate,” but one thing is for certain—to stay competitive, manufacturers of medical devices must get more involved in the rising tide of biologics.

If truly improved quality of life is the goal, biologics represent a major leap forward. The extraordinary ability to heal body parts through bioreactive agents rather than replacing them with a synthetic facsimile presents seemingly limitless potential in medicine. Biologics may also be less expensive to the healthcare system than implants, and they promise higher and longer lasting success rates in patients.

The dark side of metal and synthetic implants is revealed in the high levels of toxic metals that patients can be exposed to and have the potential to leak into patients’ bloodstreams, muscles, and bones. Biologics are not perfect, but rather, refined and fully proven products that are a safer, more cost-effective, and more advanced answer for patients and practitioners.

Full integration into the industry (i.e., manufacturing, quality, distribution, training, technical support, etc.) is not an easy road. With some notable exceptions, the medical device industry has resisted to embrace biologics, understanding that metal or synthetic implants will likely lose significant market share to the new technology, especially in the orthopedics arena. Much like any legacy company or technology, the incumbents face hard choices: reorganize, reallocate, and divest; or become increasingly irrelevant. The companies in play are among the largest and most powerful in the world, and if their response continues to be negative, there will be a healthy resistance for years to come. Nonetheless, this resistance will create a window of opportunity for a nimble challenger that can successfully combine an innovative technology, a compelling clinical need, and a creative business model to usurp these incumbents.

Some companies do see the benefit of adopting biologics early. Alliances are being made, including Royal DSM’s acquisition of U.S. biomedical company Kensey Nash Corp., Olympus Corporations acquisition of Stryker’s OP-1, Terumo’s acquisition of Harvest Technology, and MTF’s acquisition of Cascade Medical. In addition, there has also been significant investment into regenerative medicine companies such as Audax’s unique bone substitute derived from a DNA pair, investigation into Parcell Laboratories ELA cell, Ars Arthro’s unique collagen cartilage replacement, and Advanced Biologic’s growth factor enhanced demineralized bone matrix. Shire’s acquisition of Advanced Biohealing led to the formation of its Regenerative Medicine Business Unit. Further, there was Pfizer’s partnership with Athersys and Johnson & Johnson’s partnership with Novocell.

The most interesting story, though, may be Shire’s acquisition. Shire is an English biotech/pharma company that acquired Advanced Biohealing, a company focused on the treatment of diabetic foot ulcers through a surgical call point. Conventional wisdom states that a biotech/pharma business model is incompatible with a surgical implant business model. However, Shire’s strategy is to build their Regenerative Medicine business around their Advanced Biohealing acquisition and to treat the entire spectrum of disorders associated with diabetes.

This sort of vision and strategy would have been impossible at the Dermagraft product’s original home, Smith & Nephew. Now the question is, “How will the incumbent musculoskeletal hardware companies respond as new players enter the market and erode their traditional markets with technologies that facilitate a superior clinical outcome, lower inventory and logistics costs, and enable a cheaper cost of delivery?”

Even as some device companies enter the space, regulatory issues remain a significant hurdle for biologics. Residing in a gray area between pharmaceuticals and traditional technology, biologics face several roadblocks to widespread adoption. High priorities for advocates include the clarification of FDA regulations, manufacturing and product quality concerns, and updated patent guidelines.

The uncharted territory represented by biologics advances makes it difficult for products to get the attention they need from the FDA. Market regulation for biological products under the FDA is a makeshift approach that overlaps existing laws and unexplored science; the FDA therefore has trouble evaluating products that typically have no precedent in the system. This often results in lengthy research processes, adding delays to the market launch of biological innovations.

Part of the difficulty in overseeing biologics can be traced to the initial administrative attempts to categorize them. The FDA's drug sector was home to biological studies until the Center for Biologics Evaluation and Research (CBER) was created in 1987. Starting in 2002, the FDA began categorizing certain biologics as "drugs," hoping to achieve swifter reviews from the Center for Drug Evaluation and Research (CDER). However, as the CDER was structured primarily to evaluate chemicals in pharmaceuticals, the introduction of cell research has been a more painstaking effort than anticipated.

Despite these setbacks, the U.S. is making inroads to nurture the burgeoning field. The Biologics Price Competition and Innovation Act of 2009 offers a shorter approval pathway for biological products that are similar to an FDA-approved item. The BPCI Act aligns with the FDA's longstanding policy of accepting what is already known about a drug; therefore, saving time and resources and avoiding unnecessary testing that would further delay the progress of new biologics products.

More serious regulations could be coming as a result of the recent Synthes debacle, in which the sales team skirted off-label use regulations that led to worst-case scenarios for patients, physicians, and the company. The situation highlighted the need for refined regulations and better controls may end up serving as a silver lining of the situation.

As the FDA evolves its standards, leaders will need to emerge in the biologics marketplace to break through the market barriers for the sector to truly thrive. Researchers and developers must fight for recognition of their products as medically, legally, and financially legitimate, while buyers and physicians must have the right channels to put them into practice.

Eventually, corporations that oppose biologics or have watched from the sidelines will join the revolution. Market pressures will steer them to acquire biologics to get the most lucrative product into their pipelines; they will look to complement their traditional portfolio of medical devices with newer, stronger products. In the end, the marketplace, physicians, and patients will be stronger when biologics become a more routine piece of the landscape.

Christopher Velis is the CEO of MedCap Advisors.