Spine Bone Graft Procurement Shifts Toward Separate Hospital Tenders
Summary
Alphatec and Bioventus say hospital systems now tender spine bone grafts apart from hardware: ATEC revenue per case fell 5% on lower graft attachment as BVS won new networks.
Alphatec Holdings (ATEC), a spine hardware company, and Bioventus (BVS), a bone graft supplier, both said on their third-quarter earnings calls between October 29 and November 2, 2026 that large hospital systems have started to tender spine bone grafts separately, instead of letting grafts come in as part of the hardware vendor's procedure package [1][2].
How spine bone grafts were split out of the hardware bundle
A spine fusion procedure uses two kinds of products. Screws, rods and interbody cages hold the vertebrae in place, while bone graft material helps neighboring vertebrae grow into one piece. Grafts can be synthetic or made from processed human tissue, and the industry often calls them biologics. Hospitals have usually picked a hardware vendor based on surgeon preference, and that vendor then supplied the graft for the case, so the vendor's relationship with the surgeon largely decided which graft was used.
Some integrated delivery networks, which own several hospitals and buy supplies centrally, have changed that order. Alphatec management said hospitals now run a spine hardware request for proposals first and then a separate biologics request for proposals [1]. Bioventus said large networks are issuing new requests for proposals with set formularies and deciding on the clinical and economic value of each individual product [2]. Once grafts are compared on their own, the surgeon relationship matters less, and companies that sell only grafts get a way into those hospitals.
One company lost graft attachment, the other won new accounts
Alphatec's numbers show the loss on the bundling side. Third-quarter revenue per case fell 5% year over year, mainly because of a lower biologics attachment rate; total biologics revenue fell about $1 million year over year, hardware drove all of the surgical growth in the quarter, and full-year biologics revenue is now guided flat [1]. The issue had already appeared in the second quarter, when attachment stabilized but stayed below the prior year and about three quarters of the revenue-per-procedure shortfall came from biologics [3]. Management also said biologics are the least distinctive element of a procedure, and that procedure growth of about 20% makes the company a target for firms that sell only biologics [1].
Bioventus describes the same change from the other side. It first mentioned traction with new large accounts and networks in the second quarter [4], and in the third quarter said those large accounts were already contributing to growth in its bone graft business [2]. Even so, the graft business still came in below plan. The company also cited competition in the synthetic graft market, slower spine procedure volume and new distributors that are still ramping, and it cut full-year revenue guidance to $590 million to $595 million [2]. The side that wins new hospitals is also facing more direct price competition.
Hospital committees now control the graft decision
Separate tenders move the graft decision away from surgeons and hardware vendors and toward the hospital's value analysis committee, the purchasing review group that weighs clinical results, price and budget impact together. For hardware vendors, graft revenue that used to grow along with procedure volume can be taken by others. For standalone graft sellers, access now depends on clinical evidence and a team that sells to hospital systems, but once inside they compete on price within the formulary, which may let hospitals pay less for grafts.
This view has clear limits. Neither company treats the change as a lasting rule: Alphatec partly blamed its own lack of selling discipline, Bioventus called the graft shortfall transitory, and both also reported softer spine volumes [1][2]. Points to track are whether Alphatec's revenue per case and biologics guidance keep weakening, and whether Bioventus's graft volume from large networks can offset the price competition.
Companies exposed to this shift
- Xtant Medical (XTNT): Bone grafts are its core business. It cut full-year revenue guidance to $99 million to $103 million and is building a national accounts team that sells to hospital systems, the kind of standalone vendor that separate tenders could let into hospitals. The company has not mentioned separate network graft tenders, and its second-quarter biologics revenue was below expectations [5].
- Orthofix Medical (OFIX): It sells grafts both with its own spine hardware and on a standalone basis, and it is funding clinical evidence and a registry for products such as OsteoCove and Virtuos. That leaves it exposed both to lost attachment and to product-by-product review. It has not disclosed separate tenders either [6].
Sources
[1] Drillr · Alphatec Holdings (ATEC) · 2026-10-29 · Q3 2026 earnings call
[2] Drillr · Bioventus (BVS) · 2026-11-02 · FY2026 Q3 earnings call
they're putting out new requests for proposals with, you know, set formularies. And we're seeing that across the portfolio. What I think is most important there is that they're basing the decision making on the clinical and economic value of each of the individual products.
[3] Drillr · Alphatec Holdings (ATEC) · 2026-08-04 · Q2 2026 earnings call
[4] Drillr · Bioventus (BVS) · 2026-08-05 · FY2026 Q2 earnings call
[5] Drillr · Xtant Medical (XTNT) · 2026-08-11 · FY2026 Q2 earnings call
[6] Drillr · Orthofix Medical (OFIX) · 2026-08-05 · FY2026 Q2 earnings call
This article is meant to surface industry changes and companies that may be overlooked. It is not a stock recommendation.