Four Medical Device Companies Made $800M in Illegitimate Payments to Physicians Over Four Years

Kaiser Daily Health Policy Report
Thursday, February 28, 2008

Capitol Hill Watch
Four Medical Device Companies Made $800M in Illegitimate Payments to Physicians Over Four Years, HHS OIG Official Says
Four companies that manufacture artificial hips and knees paid physicians more than $800 million in royalties and fees over four years to influence them to use their products, Gregory Demske, assistant inspector general of legal Affairs at the HHS Office of Inspector General said during a Senate Special Committee on Aging hearing on Wednesday, Bloomberg/Washington Post reports (Goldstein, Bloomberg/Washington Post, 2/28).

Demske said, "Although most physicians believe that free lunches, subsidized trips or gifts have no effect on their medical judgment, the research has shown that these types of perquisites can affect, often unconsciously, how humans act" (Cooley, CQ HealthBeat, 2/27). He added that illegitimate payments to physicians have led to increased use of lower-quality medical devices.

In addition, he said that elimination of such payments likely will prove difficult because they have become common (Bloomberg/Washington Post, 2/28). He added, "The anti-kickback statute itself is insufficient to address the influence of money in this industry because of the high burden of proof" (CongressDaily, 2/28).

During the hearing, Charles Rosen, an orthopedic surgeon and founder of the Association for Ethics in Spine Surgery, said, "I don't believe the medical societies" or the medical device industry has the ability to eliminate illegitimate payments to physicians. He added, "It is so embedded now ... that I don't think it's possible to change that without something from the outside happening."

Committee Chair Herb Kohl (D-Wis.) said, "Industry and physicians are equally culpable" (Bloomberg/Washington Post, 2/28). In response the issue, Kohl has co-sponsored a bill (S 2029) with Senate Finance Committee ranking member Charles Grassley (R-Iowa) that would require large pharmaceutical and medical device companies to disclose their payments to physicians (CQ HealthBeat, 2/27).

Grassley Letter
In related news, Grassley on Tuesday sent a letter of inquiry to Synthes and FDA that requested information about a potentially "dangerous conflict of interest" among researchers who conducted a clinical trial of the Prodisc artificial spinal disk, which the agency approved in 2006, the New York Times reports. In the letter, Grassley asked Synthes to provide information disclosed to FDA about the researchers, information on discussions with the investment company Viscogliosi Brothers about the interests of the researchers and information on "internal policies, guidelines and/or standards regarding clinical investigators and their potential conflicts of interests."

Grassley wrote, "Clinical investigators play a critical part of the FDA approval process," adding, "These physicians are expected to act objectively in testing the safety and effectiveness of the drug or medical device under consideration," but, "when they stand to profit from FDA approval of the product they are testing, the investigator's objectivity is called into question." In addition, he wrote, "If FDA found out the investment interests did not raise the serious questions about the study's integrity, why not?"

An FDA spokesperson said that the agency has begun to investigate whether Synthes disclosed adequate information about the researchers but has no additional comment on the issue (Abelson, New York Times, 2/28).