Orthopedic Device Makers Accused of Paying Doctors
By Avram Goldstein
Thursday, February 28, 2008; Page D08
Four makers of artificial hips and knees paid doctors more than $800 million in royalties and fees in four years to influence their choice of implants, a U.S. investigator told Congress.
The unidentified companies control about three-quarters of the $9.4 billion worldwide market for hips and knees, said Gregory E. Demske, an assistant inspector general at the Health and Human Services Department, at a hearing yesterday of the Senate Special Committee on Aging.
"Illegitimate" payments, the extent of which is unknown, influence orthopedic surgeons' medical judgment and are so common that it will be difficult to eliminate the practice, Demske and other witnesses said. The fees have enriched doctors and distorted the market by bolstering sales of lower-quality devices, they said.
"Industry and physicians are equally culpable," said Sen. Herb Kohl (D-Wis.), chairman of the panel. "Some physicians make it known to the companies that they will be loyal to the highest bidder. Where does the patient's well-being fit into the equation?"
The hearing followed a probe of the orthopedic-device industry by U.S. prosecutors that was settled in September for $311 million. The government said the companies handed out excessive consulting agreements, lavish trips and other perks to reward surgeons who used their products.
The parties to the settlement were two Warsaw, Ind., companies, Zimmer Holdings and Biomet, as well as New Brunswick, N.J.-based Johnson & Johnson and London-based Smith & Nephew.
It's clear the device companies went too far, said Chad Phipps, Zimmer's general counsel.
"In hindsight it now appears that as the industry expanded to meet patient needs, the use of consultants may have been excessive at times," Phipps told the committee.
New limits and disclosure rules stemming from the settlement have "leveled the playing field," said Edward Lipes, executive vice president of Stryker, a Kalamazoo, Mich.-based maker of artificial hips. "Surgeons will be paid fair-market value for their services."
It's difficult to sort out which payments are unethical, said Demske, the investigator. Kohl has proposed legislation requiring public and easily accessible online disclosure of all payments to doctors by device makers, including makers of heart devices.
Zimmer and Medtronic, a maker of devices for heart disease and spine surgery in Minneapolis, said they would support Kohl's proposal if it covered every device maker rather than only those with more than $100 million in annual revenue.
Larger device makers worry that physician consultants may be tempted to shift their allegiance to competitors that fall below that revenue threshold in order to keep taking excessive fees, according to Senate committee staffers.
Efforts to curb questionable consulting fees have failed so far, said Charles Rosen, an Irvine, Calif., orthopedic surgeon, who started the Association for Ethics in Spine Surgery. He testified that he was vilified by leaders of his medical specialty, including medical journal editors, because of his opposition to company payments.
"I don't believe the medical societies are capable of doing it, nor the industry," he said. "It is so embedded now among most of the people running these societies, including the educational foundations, that I don't think it's possible to change that without something from the outside happening."