Device Maker Synthes to Disclose Financial Ties to Doctors Under Agreement

Device Maker Synthes to Disclose
Financial Ties to Doctors Under Agreement

PHILADELPHIA-New Jersey Attorney General Anne Milgram May 5 announced an agreement with medical device maker Synthes Inc. that requires the company to disclose any financial relationships with doctors conducting clinical trials of its products and bans it from tying their compensation to the outcome of such trials.

In announcing the agreement with Synthes, the state AG also said that tougher disclosures should be required by device regulators at the Food and Drug Administration. The Assurance of Voluntary Compliance resolves allegations by the state that Synthes, which is based in West Chester, Pa., and makes spinal trauma products and devices, failed to disclose financial conflicts of interest among clinical trial researchers.

The state's investigation focused on allegations that most physicians conducting clinical trials for Synthes's ProDisc Total Disc Replacement System, ProDisc-L, and ProDisc-C had a financial stake in the outcome, Milgram said in a statement.

The settlement with Synthes is the first of its kind because of its disclosure provisions and its ban on compensating clinical researchers with company stock or stock options, an "outrageous" industry practice that compromises the integrity of the clinical trial process, Milgram said.

Template for Industry

She said the Synthes agreement should serve as a template for the industry and called on FDA to adopt and rigorously enforce conflict of interest disclosure rules that ensure fairness and transparency.  "As things stand, the public often has no knowledge that a ‘clinically tested and recommended' medical device was evaluated and endorsed by people with a financial stake in seeing it sell," Milgram said. "This is simply wrong and it must stop."

In addition to barring compensation of clinical investigators tied to the outcome of the clinical trial, Synthes agreed under the settlement to pay clinical investigators fair market value compensation for their clinical trial work and any other consulting services they provide to the company.  The company is required to collect information on financial interests from clinical investigators, conduct reasonable due diligence to ensure that the disclosures are complete and accurate, and record the information in a database that will be provided to the FDA and made available on the company's Web site.

"Such disclosure is not required by the FDA, but it should be," Milgram said.

Disclosure to Clinical Trial Sites

In addition, the settlement requires Synthes to disclose all financial interests directly to health care facilities serving as clinical trial sites and provide financial interest and disclosure training to employees.  The Synthes agreement pertains to all ongoing and future clinical trials, except for those conducted outside the United States and not intended for use in the marketing of products in this country. In addition to the other settlement terms, Synthes will pay the state a total of $236,000 as reimbursement for fees and costs related to the investigation.

ProDisc was developed by Spine Solutions Inc. with financing from a New York investment firm that offered the ProDisc clinical investigators investment opportunities in Spine Solutions and consulting contracts that included gifts of company stock and stock options.  When Synthes bought Spine Solutions in 2003, it failed to fully disclose these conflicts of interest to FDA, which signed off on Synthes's applications for premarket approval of ProDisc despite "plainly inadequate" financial conflict disclosures, Milgram said.

Critical of FDA

In a letter sent to FDA May 5, with copies to Sens. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa), the state AG criticized the agency's "lax handling" of the Synthes application.  For example, Milgram said in the letter, a number of disclosure forms in the Synthes submission to FDA were signed and dated, but were otherwise left blank. Other forms indicated that clinical investigators had significant equity interests in the Synthes product they were testing, but offered no details.

An FDA spokeswoman said she could not respond to Milgram's comments without reading the letter, a copy of which was not immediately available to her.

A Synthes spokeswoman said the company has no comment on the settlement.

The potential for financial conflicts of interest among clinical researchers testing new drugs and medical devices has drawn increasing attention from policymakers.  An Institute of Medicine report issued April 28 recommends new regulations and voluntary practices to increase disclosure of physicians' and scientists' relationships with drug and device companies and to ban gifts from industry to doctors (80 HCDR, 4/29/09).

Congress also has begun to weigh in, with the January introduction by Sens. Grassley and Herb Kohl (D-Wis.) of the Physician Payment Sunshine Act (S. 301). The measure would require drug and device companies to report their financial payments and gifts to doctors that total more than $100 annually.

New Subpoenas

Milgram said her office issued subpoenas May 5 to five major medical device manufacturing companies seeking information about their business practices.  "Medical device makers have a duty to make certain that clinical trial results are accurate and unbiased," Milgram said. "In creating these financial incentives for doctors, Synthes and the rest of the industry have done the exact opposite. Going forward, if the industry will not address this problem voluntarily, we most certainly will."

By Lorraine McCarthy

Text of the Assurance of Voluntary Compliance is available at Text of the New Jersey attorney general's letter to the FDA is available at on the Web.