SIC 3842 Orthopedic, Prosthetic, and Surgical Appliances and Supplies
SIC 3842
This classification covers establishments primarily engaged in manufacturing orthopedic, prosthetic, and surgical appliances and supplies; arch supports and other foot appliances; fracture appliances, elastic hosiery, abdominal supporters, braces, and trusses; bandages; surgical gauze and dressings; sutures; adhesive tapes and medicated plasters; and personal safety appliances and equipment. Establishments primarily engaged in manufacturing surgical and medical instruments are classified in SIC 3841: Surgical and Medical Instruments and Apparatus. Establishments primarily engaged in manufacturing orthopedic or prosthetic appliances and in the personal fitting to the individual prescription by a physician are classified in SIC 5999: Miscellaneous Retail Stores, Not Elsewhere Classified.
339113
Surgical Appliances and Supplies Manufacturing
The total value of shipments in this industry in 2003 was $26.6 billion, up from $25.0 billion in 2002. The industry experienced significant growth through the late 1990s and into the mid-2000s. While some segments of the industry were fairly mature and posed little potential for substantial growth, growth in the population of older Americans was leading to increased levels of joint replacement surgery. Advancement in device design, as well as less invasive surgical techniques, were providing incentives for more, and younger, Americans to undergo knee and hip replacement. Advancements in coronary stents also were fueling growth.
The entire medical device industry, which is divided into six sub-industries, shipped about $65.8 billion worth of products in 2003. The surgical appliances industry described in this classification is the largest of those divisions, accounting for about 40 percent of total medical product sales in the mid-2000s.
More than 1,800 U.S. establishments did business in this industry in the mid-2000s. However, companies with more than 100 employees, which accounted for 12 percent of all establishments, generated approximately 84 percent of the industry's revenues. The top five states by number of manufacturers in the mid-2000s were California, with 256 establishments; Texas, with 127 establishments; New York, with 123 establishments; Florida, with 120 establishments; and Pennsylvania, with 108 establishments.
After experiencing overall growth, large capital investment, and high profit margins in the early 1990s, the industry was maturing by the mid-2000s. While high-tech devices accounted for most revenue and profit, other segments offered limited opportunities. For example, personal safety equipment and some appliances, such as wheelchairs and crutches, represented sectors of modest growth. Larger companies increasingly looked to mergers and acquisitions as a means to generate revenues.
Surgical, orthopedic, and therapeutic appliances and supplies accounted for more than 88 percent of industry output in the mid-2000s, with orthopedic and prosthetic appliances comprising the largest share. Orthopedic equipment refers to devices used in the preservation, restoration, and development of the form and function of the extremities and spine. The term "prosthetic appliances" in this industry refers to devices related to artificial limbs and joints. Popular hip and knee replacement devices, for instance, reduce pain and allow patients to regain mobility.
Prosthetic and orthopedic appliances represented approximately 28 percent of industry sales in the mid-2000s. Artificial joints, the largest single segment, accounted for about 17 percent of total sales, while artificial limbs made up less than 1 percent of shipments. This industry segment also includes the following orthopedic and prosthetic products: mechanical and elastic braces; elastic stockings; splints and trusses; crutches, canes, and other walking aids; arch supports and other foot appliances; intraocular lenses; and surgical corsets.
Other medical and surgical appliances and supplies, including hydrotherapy tanks, therapeutic equipment and supplies, surgical kits, and stents, accounted for almost 30 percent of total industry shipments in the mid-2000s. Stents were the largest single subcategory and held the most potential for growth. Another 10 percent of industry revenues was generated by sterile surgical sutures, rubber and surgical gloves, breathing devices (incubators, inhalators, respirators, and resuscitators), wheelchairs, stretchers, and wheeled tables. Surgical dressings such as gauze, bandages, packing, plaster, and compresses, along with disposable surgical drapes, made up 9 percent of the industry.
In addition to the 88 percent of the market represented by the products described above, this industry also encompasses a variety of personal and industrial safety equipment, which includes protective clothing, welders' hoods, motorcycle and racing helmets, fire-fighting suits and breathing apparatus, safety gloves, bullet-proof vests, ear and nose plugs, safety goggles, and space suits.
Prosthetics date back to 600 B.C. during the Roman Empire, when artificial legs were used to help amputees regain mobility. It was not until the sixteenth century, through the efforts of French surgeon Ambroise Pare, that prosthetics became a science. During the sixteenth and seventeenth centuries, his work led to the development of replacements for upper extremities. Metal hands, some of which contained moving parts and springs, became popular prosthetics in Europe during the 1600s. They were replaced in the 1700s by two innovations: a single hook, or a leather-covered, nonfunctioning hand attached to the forearm by a leather or wooden shell.
Public acceptance of prostheses, as well as improvements in...
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