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VOLUME 4, ISSUE 2  
 2021 

 

STAKEHOLDER  PERSPECTIVES 

Andrysek J. The economics of innovation in the prosthetic and orthotics industry. Canadian Prosthetics & Orthotics Journal. 2021; Volume 4, Issue 2, No.7. 

https://doi.org/10.33137/cpoj.v4i2.35203 

This article has been invited and reviewed by Co-Editor-In-Chief, Dr. Silvia Ursula Raschke. 
English proofread by: Karin Ryan, M.A., B.Sc., P.T.   
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STAKEHOLDER  PERSPECTIVES 

 

THE ECONOMICS OF INNOVATION IN THE PROSTHETIC AND ORTHOTICS INDUSTRY 

Andrysek J.1, 2 * 
 

1 Bloorview Research Institute, Holland Bloorview Kids Rehabilitation Hospital, Toronto, Canada. 
2 Institute of Biomedical Engineering, Faculty of Applied Science and Engineering, University of Toronto, Toronto, Canada.  

 

 

 

 

  

 

 

 

 

 

BACKGROUND 

One can appreciate the technological advancement within 

the prosthetic and orthotic (P&O) industry. Advanced 

materials, body interfaces, and control systems are just 

some of the innovations making it possible for persons with 

severe disabilities such as limb loss or impairments to 

regain physical function and their lives.  The advancement 

in P&O technology investment into product innovation, 

presumably a result of the competitive nature of the industry 

and desire for constant improvement of existing 

technologies, patient care and outcomes. Advancement 

also responds to and affects economics, both at the health 

care level where technological interventions are utilized, 

and at the market level where products are developed and 

commercialized.  So, what drives innovation and focuses 

product developers and manufacturers to tackle certain 

areas of technological advancements over others? Are 

these driving forces achieving the desired goals in terms of  

rehabilitation care and outcomes, and if not, what is missing 

and what can be done? Is the focus to restore the most 

amount of human function possible for an individual or is it  

 

to take into account economic factors and try to restore the 

most amount of human function of the global population that 

suffers from a condition?  This paper aims to explore the 

interaction of innovation and economics of the P&O 

industry, focusing on the drivers of innovation including 

competition, technological advancement, and betterment of 

patient outcomes, and also the challenges including lagging 

clinical and cost-effectiveness evidence, research biases, 

existing funding structures, and the need for more inclusive 

models and frameworks for rehabilitation care.   

INDUSTRY OVERVIEW 

Prosthetic and orthotic technologies are part of a large and 

rapidly growing medical device industry valued at over US 

$8 billion in Canada, and over US $150 billion in the United 

States.1,2 The global market for prosthetics and orthotics is 

estimated at US $6 billion with an annual growth of nearly 

5% - attributed largely to a growing population in need of 

such treatments.3 P&O treatments (i.e. prosthetic and 

orthotic devices) commonly cost thousands to tens of 

thousands of dollars. These costs are reoccurring every 

several years as devices reach the end of their lifecycle, or 

the patient’s condition changes affecting fit and comfort, 

function, or desired rehabilitation goals. The process of 

P&O device procurement involves a number of 

 
OPEN  ACCESS Volume 4, Issue 2, Article No.7. 2021 

 

 

Journal Homepage: https://jps.library.utoronto.ca/index.php/cpoj/index 

 

ABSTRACT 

Innovation is an important part of the prosthetic and orthotics (P&O) industry.  

Innovation has the potential to improve health care services and outcomes, however, 

it can also be a burden to the system if misdirected. This paper explores the 

interaction of innovation and economics within the P&O industry, focusing on its 

current state and future opportunities. Technological advancement, industry 

competition and pursuit of better patient outcomes drive innovation, while challenges 

in ensuring better P&O health care include lagging clinical evidence, limited access 

to data, and existing funding structures. There exists a greater need for inclusive 

models and frameworks for rehabilitation care, that focus on the use of appropriate 

technology as supported by research and evidence of effectiveness and cost-

effectiveness. Additionally, innovative business models based on social 

entrepreneurism could open access to untapped and underserved markets and 

provide greater access to assistive technology.  

CITATION 

Andrysek J. The economics of innovation in the 

prosthetic and orthotics industry. Canadian Prosthetics 

& Orthotics Journal. 2021; Volume 4, Issue 2, No.7. 

https://doi.org/10.33137/cpoj.v4i2.35203 

KEYWORDS 

Innovation, Health care, Economics, Cost-

effectiveness, Effectiveness, Rehabilitation, Assistive 

devices, Technology 

 

 

* CORRESPONDING AUTHOR 

Jan Andrysek, PhD 

Holland Bloorview Kids Rehabilitation Hospital, Toronto, Canada.  

E-Mail: jan.andrysek@utoronto.ca;  jandrysek@hollandbloorview.ca 
ORCID ID: https://orcid.org/0000-0002-4976-1228 

Special Issue: Health Economics in Prosthetics & Orthotics 

https://doi.org/10.33137/cpoj.v4i2.35203
https://jps.library.utoronto.ca/index.php/cpoj/index
https://doi.org/10.33137/cpoj.v4i2.35203
mailto:jan.andrysek@utoronto.ca
mailto:jandrysek@hollandbloorview.ca
https://orcid.org/0000-0002-4976-1228


 

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stakeholders, including clinicians that determine and 

provide the patient with the devices, funders and insurers to 

cover portions of the cost, and the patient with their 

particular rehabilitation goals. All these parties typically 

have some say in determining which particular device or 

treatment is provided. It is essential that device developers 

and manufacturers understand these intricacies of the 

health care systems when developing new products to 

ensure that their devices can have both a viable market and 

provide large scale impact on the affected populations.    

TECHNOLOGY DEVELOPMENT PROCESS IN 

P&O 

The P&O device industry is highly competitive. It is led by 

several large international corporations, each providing a 

variety of products. Outside of commonly defined categories 

of products designed for a particular patient demographic or 

health condition, understanding the technical nuances and 

product differentiation can present challenges in the clinical 

decision-making process. Hence, competing manufacturers 

strive for transformational advances to gain competitive 

advantage. Such advances are often closely tied to 

technological advancements in other industries. For 

example, a leap forward in terms of strong, flexible and 

lightweight materials to advance foot, socket and brace 

designs occurred with the introduction of composites such 

as carbon fibre laminates in the 1980s. The 90’s which 

brought more powerful mobile computing, enabled the 

commercialization of microprocessor controlled prosthetic 

components such as the Intelligent Prosthesis from 

Blatchford.  In the 2000’s, advancements in power storage 

(i.e. high-density batteries) along with more powerful 

actuation systems have laid the foundation for powered 

lower-limb prostheses and exoskeletons. Therefore, the 

adoption and adaption of scientific and technological 

advancements from other industries is one key driver of 

innovation in P&O, providing a competitive advantage to 

companies that invest heavily into research and 

development, and patients with improved rehabilitation care 

via access to more advanced assistive devices.  

The development of advanced P&O products, does not in 

itself ensure better health care and rehabilitation outcomes.  

Developing useful new technology requires a design 

process that carefully considers and addresses the needs 

of the relevant stakeholders (end-user, clinicians, funders 

and insurers etc.). As with most medical devices, the 

development and commercialization of P&O technology is a 

complex and resource intensive process. A new P&O 

technology can go through many design iterations informed 

by modeling and empirical testing, prior to finding its place 

in the marketplace.  R&D is typically facilitated via both 

academic and industry driven research, or a combination of 

both.  Government research grants typically help to fund 

early exploratory aspects of the R&D process. These can 

include industry-partnered programs which can leverage 

industry funds with grant money, or R&D tax credits for a 

company. Company resources or business investment are 

usually needed for later-stage development, market testing 

and commercialization.4 Established companies will 

typically resort to internal resources to fund product 

development and commercialization, while start-ups may 

need to raise financing through external investors (for 

example angel investors).  Occasionally, projects may in 

part be supported by donors or foundation grants. At the 

early stages, stakeholder (user, practitioner, funder, 

industry) involvement is essential to define the criteria for 

the design. Methods such as the Quality Function 

Deployment and the House of Quality can be used to 

organize and prioritize design criteria.5,6 Criteria can change 

as the development progresses and should therefore be 

regularly reassessed. As part of an iterative design process, 

simulations and prototypes can enable testing to determine 

how well the design works and meets the desired criteria.   

While these steps are essential to inform the development 

of the product ahead of commercialization, establishment of 

clinical evidence about the efficacy and effectiveness 

typically happens once a product is on the market. 

QUALITY, EFFECTIVENESS, VALIDITY 

The effectiveness, and more importantly cost-effectiveness, 

of medical interventions requires empirical clinical data, 

typically in the form of research-grant-funded clinical trials.  

Clinical research informs which treatments are most useful 

in decreasing the burden of a health condition, and in the 

case of P&O decreasing the effects of the disability and 

improving quality of life.  Based on Health Canada and its 

much larger United States counterpart the Food, Drug, and 

Cosmetic Act (FDA), prosthetics and orthotics are classified 

as ‘low risk’ medical devices. Similarly, the sale of P&O 

devices in Europe is subject to CE designation which is an 

administrative marking that indicates conformity with health, 

safety, and environmental protection standards. However, 

none of the regulatory bodies necessitate that P&O devices 

undergo formal testing for safety or effectiveness. Bodies 

such as the International Organization for Standardization 

(ISO) have developed standards, for example to test the 

strength of lower-limb prosthetic components (e.g. 

ISO10328), however, these are not mandatory.  Hence, 

unlike other interventions including drugs, P&O 

manufacturers are not required to provide evidence about 

the safety or effectiveness of their products. However, such 

data can play an essential role in the clinical decision-

making processes, allowing for more informed clinical 

decisions about the suitability of the treatment options 

available. Empirical data can also play an important role in 

the establishment of new reimbursement codes (i.e. L-

codes in the United States), thus making new devices 

attainable. Studies demonstrating effectiveness, can further 

play an important role in marketing, particularly to P&O 

practitioners who in large part lead the purchase decision-

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making process. Cost-effectiveness analyses, which 

compare treatments and their relative costs and outcomes, 

enable funders, governments and health care professionals 

and institutions, to make informed decisions about the care 

that is provided within funding constrained health care 

systems.7   

Unfortunately, the clinical evidence relating to most P&O 

interventions is lacking or is not of high quality. The highest 

evidence comes from meta-analyses of RCTs (Level 1), 

followed by at least one RCT (Level 2), quasi experimental 

designs (Level 3) and so on, and the majority of clinical 

research studies involving P&O interventions fall in the latter 

categories.8 The customization of aspects of the P&O 

treatments, heterogeneity of patient populations, broad 

range of technologies and products, as well as varying 

patient goals and outcome measures, are just some of the 

challenges in designing quality research studies. 

Methodological issues, such as the inability to apply double 

blinding to the intervention (for example, participants or 

prosthetists can not readily be blinded when testing 

prosthetic knees that have distinct function or instructions 

for use), introduce potential study biases, compromise the 

resulting evidence, and fail to fully uphold the accepted 

methodological standards of RCTs.  Availability and ability 

to attain funding for clinical studies is also a significant 

challenge. A typical multi-year RCT can easily cost 

$500,000 or more. In P&O, the high cost of componentry 

can further increase required funding, and thus may not be 

viewed favourably by grant review committees and 

dismissed as not being an effective use of grant/tax-payer 

monies.  

In Canada, funding for clinical trials would typically be 

sought from Canadian Institutes of Health Research 

(CIHR). CIHR grant applications are extremely competitive, 

and P&O is up against a broad range of other healthcare 

priorities, such as finding the cure for cancer, which has 

relevance to a much larger part of our population. Hence, 

P&O researchers commonly resort to applying for smaller 

grants, which limits the types of studies and quality of 

clinical evidence. Possibly due to aforementioned 

restrictions in accessing traditional grant funding, many 

studies evaluating P&O products are sponsored by 

companies selling the products. While this may be a means 

for establishing studies and providing at least some 

evidence, the data may be potentially susceptible to biases, 

or at least a perception thereof.9  There is little incentive for 

a company to disseminate results that do not demonstrate 

their product to be superior and bring the anticipated 

benefits. With higher level studies including registered 

clinical trials, there exist greater oversights for unbiased 

reporting of results; unfortunately, in P&O such studies are 

not common. Another major challenge is the latency in 

establishing clinical evidence.  For example, 

microprocessor knee joints were introduced to the market in 

the mid 1990’s, however, to this date, evidence is based on 

not one RCT.10 These limitations make it challenging for 

stakeholders to know which innovations truly serve the 

needs of the patient and health care system. 

While many innovations improve our lives, some may bring 

undesired adversities, complexities and disenchantment. 

For example, despite the advancements in electro-

mechanical prostheses including myoelectric hands, much 

simpler purely mechanical body-powered devices are still 

highly utilized in clinical care.11 Some of this is attributable 

to the high cost of myoelectric devices, but also likely their 

limited function and utility. With most health care 

expenditures being contained, innovation can be a major 

inflationary factor, and the high cost of P&O treatments 

requires especial consideration of cost-effectiveness.  For 

example, while microprocessor knee joints are shown to 

provide benefits including the reduction of falls, their 

acquisition and maintenance costs are significantly higher 

than their mechanical counterparts.7,10   Many public health 

care systems do not fully cover the cost of P&O devices, 

and especially those at the higher end of technological 

sophistication.  As such, significant inequalities exist in 

terms of access to modern innovations typically costing 

significantly more than the status quo.  These discrepancies 

are apparent in places like Canada, where clinical provision 

of high-end P&O technology is far from universal.12 Even 

more striking, 85% of the world’s disabled population lack 

access to even the most basic P&O interventions.13 While 

this immense problem is not solely due to the lack of cost-

effective devices, it nevertheless suggests that our efforts to 

innovate may be to some extent misguided.14  

FUTURE DIRECTIONS 

Innovation is most commonly associated with the 

advancement of sophisticated P&O technology, however, 

could and should more of our energies be directed 

elsewhere? Should we, for example, focus on the 

development of technology that is simpler, more cost-

effective, and still adequately functional? Such an approach 

could potentially achieve greater equality and access to 

P&O devices. Perhaps the focus should be less on the 

promotion of sophisticated devices, and more at taking 

measures to study and ensure that a device is appropriate 

for its application. For this, research needs to step beyond 

simply assessing select aspects of device performance 

under laboratory conditions, and towards more real-life and 

comprehensive assessments that capture what is truly 

important to the person using the device, as well as the 

health care system.15 Greater understanding yet, is needed 

in evaluating the quality of life outcomes and cost-

effectiveness of P&O care and devices. Finally, a greater 

understanding, which could be obtained via research, is 

needed about the factors including technological, economic, 

healthcare, cultural, demographic, regulatory aspects, that 

drive the care and devices that are provided. Currently, the 

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available information is anecdotal at best. Establishment of 

data in these respects could help in the development of new 

frameworks and approaches for the provision of assistive 

technology, concomitantly targeting greater access, better 

outcomes, and higher efficiency.16 

Innovative approaches to service and device delivery have 

had significant impact in other areas of health care to 

provide greater access to quality care. In the 1980’s, for 

example, the high cost of implantable intraocular lenses 

(IOL) restricted access to cataract surgery amongst the poor 

in India.  This led to the development of new manufacturing 

facilities, capable of producing IOLs at a small fraction of the 

market price.17 Lower price not only enables greater 

access, but also increases sales, which in turn increases 

manufacturing output and efficiencies. Innovative new 

industry entrants can therefore disrupt the competition and 

in this particular case the IOL venture was able to 

significantly increase access to IOL and cataracts surgery. 

The innovative approach established in the IOL industry 

also included a hybrid business model, focused on 

sustainable business operations while in parallel serving a 

social mission to provide greater access.  Similar models 

have been demonstrated in P&O, however greater initiative 

is needed by companies, for example, LegWorks Inc, and 

organizations with a strong presence and influence in the 

market.18 Alternatively, greater focus on training the next 

generation of social entrepreneurs with a focus on P&O, 

could help to establish innovative and more inclusive 

models and frameworks for rehabilitation care to advance 

promising ongoing efforts involving various organizations 

and partnerships.16,19-21 Moreover, serving to the needs of 

the less-resourced markets, as hybrid models aim to do, 

could in turn drive the development of cost-effective and 

affordable P&O devices, as opposed to the current status 

quo where low cost devices are typically of low function and 

in some cases lower quality.  

CALL TO ACTION 

Much like the human body, the P&O industry is an 

amazingly complex system. Technological ingenuity has 

allowed assistive devices to successfully restore the body’s 

function for those that have access to such technology. The 

P&O industry can and should take certain steps to ensure 

that rehabilitation care reaches all those that need it. 

Organizations such as the International Society of 

Prosthetics and Orthotics (ISPO) need to take a leadership 

in identifying and defining P&O priorities through 

engagement and consensus of stakeholders and industry 

experts many of whom are members of ISPO.  In this way 

ISPO and other professional organizations can help to 

inform and advocate around the pressing issues towards a 

focused action plan. Consensus of priorities will provide a 

stronger and more justifiable foundation for researcher to 

build competitive funding applications.  Recent initiatives 

and reports developed by the Clinton Health Access 

Initiative (CHAI) under the AT2030 programme in support of 

the AT-scale Strategy are an excellent example of such an 

effort. For the P&O industry specifically, there now exists a 

comprehensive globally relevant narrative identifying the 

barriers and exploring ways for better P&O service 

delivery.16 Such works could similarly help to structure and 

prioritize research and development efforts.  As such, a 

greater understanding of the workings of the P&O industry 

could help to identify the gaps and opportunities to truly 

advance P&O care.  Focusing a greater part of innovation 

on simpler technology and using empirically derived 

evidence to inform its use in clinical care, could also help 

ensure that appropriate technology is utilized. There needs 

to be more incentive for companies in this regard. Internally, 

companies can decide to uphold a greater focus on what 

might be less profitable but more impactful projects and 

products, for example by having a social for-profit business 

structure focused on developing and providing affordable, 

appropriate and high-quality prosthetic components within 

both high- and low-income countries.  

Innovative business models based on social 

entrepreneurism could open access to untapped and 

underserved markets, thus making social entrepreneurism 

a viable, sustainable and potentially profitable approach for 

companies. It may be possible to adapt and scale the 

examples of IOL and LegWorks Inc as described above. 

However, governments also have a role to play since to an 

extent they dictate what products are lucrative to develop 

and sell in the presiding healthcare ecosystems. In the 

United States, the reimbursement codes and categories are 

largely based on the technical features of a device, rather 

than a metric of performance. This is likely in part due to the 

fact that performance measures require clinical evidence, 

which as described previously is greatly lacking in P&O.  

Additionally, in markets such as the United States, existing 

reimbursement systems favour high-end devices which 

yield greater margins for the clinics and companies selling 

components. Hence governments play an important role in 

managing these aspects of the medical device industry.  

Government also provides research funding and sets 

scientific priorities.   

A greater level of communication and coordination is 

needed amongst different industry stakeholders, including 

patients, clinicians, healthcare institutions, professional 

organizations, companies, academia, and government to 

identify and tackle the key priorities, such as the generation 

of data relating to cost-effectiveness for informing 

governmental policy, and establishing the proper funding 

systems and rehabilitation health care services.  Such 

efforts need to be driven by organizations that are 

comprised of representation from all of the stakeholders, 

such as ISPO at the international level, and locally with 

organizations such as Orthotics Prosthetics Canada (OPC) 

or American Orthotic & Prosthetic Association (AOPA) in the 

United States. For the common goal of all of the 

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stakeholders in the P&O industry should be clear, and that 

is to provide equitable access to P&O care, and to enable 

individuals to successfully rehabilitate.  

ACKNOWLEDGEMENTS 

I would like to thank Brandon Burke for the discussions that helped 

to formulate the direction and ideas for this paper, as well for his 

feedback and edits 

DECLARATION OF CONFLICTING 

INTERESTS 

Jan Andrysek is a co-founder and active member of LegWorks Inc. 

He is also a member of Exceed Worldwide and ISPO. 

SOURCES OF SUPPORT 

None. 

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6 

Andrysek J. The economics of innovation in the prosthetic and orthotics industry. Canadian Prosthetics & Orthotics Journal. 2021; Volume 4, Issue 2, No.7. 
https://doi.org/10.33137/cpoj.v4i2.35203 

ISSN: 2561-987X 
THE ECONOMICS OF INNOVATION 

Andrysek J. 2021 CPOJ 

Special  

 

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AUTHOR SCIENTIFIC BIOGRAPHY 

Dr. Jan Andrysek is a Senior 

Scientist at the Bloorview 

Research Institute of Holland 

Bloorview Kids Rehabilitation 

hospital. He is also an 

Associate Professor at the 

Institute of Biomedical 

Engineering, University of 

Toronto. His research program 

focuses on the development of 

treatments and assistive 

technologies for children and 

youth with disabilities. Specific 

areas of study include 

prosthetic and orthotic limb 

control, bio sensing and 

biofeedback systems, and instruments to measure assistive-

technology-facilitated mobility and physical activity in real-life 

environments. Current research is also focused on understanding 

the global need for prosthetic technology, and impact on mobility, 

physical function, and quality of life. He is the recipient of awards 

including the 2017 Ontario Profession Engineers Engineering 

Medal for Research and Development, Clifford Chadderton Award 

for Prosthetics and Orthotics Research, and first price at the 2015 

Accessibility Innovation Showcase Tech Pitch Competition 

sponsored by the Government of Ontario. In 2019 Dr. Andrysek 

was elected an American Institute for Medical and Biological 

Engineering (AIMBE) fellow. Dr. Andrysek is also the co-founder 

and Chief Scientific Officer at Legworks Inc., a social for-profit 

enterprise focused on improving prosthetic technologies and care 

for individuals with amputations worldwide. 

 

https://doi.org/10.33137/cpoj.v4i2.35203

