Another Tale of Conflicts of Interest: Kyphon, Kyphoplasty, and the Surgeon with Stock Options

Here we go again. The Cleveland Plain Dealer published an investigative report about financial entanglements between an orthopedic surgeon who advocated for a particular procedure, kyphoplasty, for treating spinal fractures due to osteoporosis, and the company, Kyphon Inc, that made the equipment used in the procedure. To summarize, using quotes from the Plain Dealer:

Back braces, bed rest and medications had been the mainstays for treating the estimated 700,000 spinal fractures a year in this country alone caused by osteoporosis and other conditions. Then, in the mid-1980s, doctors in France began experimenting with the concept of vertebroplasty.

The first vertebroplasty in the United States was performed in 1993. An orthopedic surgeon, Dr. Mark Reiley, soon developed the idea of using a balloon to improve results, and he co-founded Kyphon. The company's focus the first few years was to raise money and develop the instruments used in kyphoplasty.

Next, Kyphon needed studies with influential practitioners and institutions to demonstrate that the treatment worked.

[Dr Isadore] Lieberman began offering advice to Kyphon in 1997, the [Cleveland] Clinic said, shortly after he came to Cleveland. In 1999, Kyphon provided equipment to a handful of major medical centers, including the Clinic. Lieberman, a specialist in the surgical treatment of spinal disorders, oversaw the hospital's inaugural kyphoplasty work. The findings of the Lieberman-led 30-patient trial were the first kyphoplasty results by a hospital detailed in a medical journal.

Well before the publication of that study in July 2001, Lieberman's work helped Kyphon generate buzz about its new technology.

On the SpineUniverse Web site, Lieberman, Kyphon co-founder Reiley and three other doctors published a four-paragraph synopsis of their initial experiences with kyphoplasty involving 26 patients. 'These results support further use of kyphoplasty,' the March 2000 summary concluded.

Also in 2000, Kyphon posted data from Lieberman's Clinic procedures in bar-graph form on its Web site to show kyphoplasty's favorable results.

Kyphon's use of Lieberman's data and other information without FDA permission prompted the agency in October 2000 to issue a warning letter to Kyphon.
Kyphon gave Lieberman a seat on its scientific and clinical advisory board. And during the period he was conducting his first kyphoplasty trial at the Clinic, he had an offer of stock options from the company.

When Kyphon officials took their company public in May 2002, they disclosed in a filing with the Securities and Exchange Commission that they had offered stock options to the eight members of their advisory board. All took them except Dr. Joseph Lane, a New York orthopedic surgeon who teaches at the medical school affiliated with Cornell University.

As of December 2001, the company had reserved 948,000 options for consultants and other non-employees at a cost of $1 or less - some as low as 3.5 cents, records show. The company is not required to divulge how many were held for individual members of the advisory board.

Medical journals show that Lieberman and most of the other consultants conducted kyphoplasty research around the time they were offered stock options. Their research was frequently cited by Kyphon in promotional material aimed at other doctors and medical insurance providers. Lieberman and other consultants also lobbied for insurance coverage of kyphoplasty treatments.
Kyphon was straightforward in describing its motivation for offering stock to consultants, saying it provided 'additional incentive' and was designed to 'promote the success of the company's business,' SEC records show.

The article went on to document how Lieberman had failed to disclose his financial relationships with Kyphon when speaking in favor of kyphoplasty and Kyphon's products:

In the spring of 2005, Lieberman testified to the benefits of kyphoplasty at a Centers for Medicare and Medicaid Services committee hearing. He and all other participants were asked to disclose all past and present financial involvement — including stock and stock options — with device makers.

But Lieberman did not reveal his past stock holdings, limiting his disclosure to working as a consultant for Kyphon and receiving grant and research support from the company.

Later in the hearing, the committee vice chairwoman reminded participants to disclose all holdings and specifically asked Lieberman and other doctors if they wanted to note anything else. Lieberman said nothing about his past holdings.

The Clinic said Lieberman had sold all of his Kyphon stock by that time and that he was not asked to go into detail about his financial interests. Yet minutes from the hearing show that he was asked to disclose past and current stock holdings, and there is no record he made such a disclosure.

Physicians are expected to disclose to medical journals financial relationships with companies that are the subjects of their research. That standard has been in place about six years, according to medical ethicists, following a well-publicized patient death in a University of Pennsylvania clinical trial.

But Lieberman did not divulge any relationship with Kyphon when results of his first two kyphoplasty studies were published in 2001 and 2002. In a 2003 article detailing other research, Lieberman noted only that he was a consultant to Kyphon, which is how he has usually described the relationship in articles about kyphoplasty or in presentations at conferences. The Clinic last week acknowledged that Lieberman held stock in 2003.

He failed to identify his stock interests in Kyphon for specialized medical and general audiences, according to a Plain Dealer review of medical journals, other publications and publicly available conference programs.

Also,

Lieberman's actions are noteworthy for another reason: He is a member of the Clinic's conflict-of-interest committee, charged with overseeing the relationships the hospital's physician-researchers have with private industry.

The Plain Dealer reporter asked for a response from Lieberman. In a written statement, he said, "I strive to be transparent in my disclosures and believe that I have disclosed my interests within the guidelines and policies of the Cleveland Clinic," but would not be interviewed.

The article included some opinions about Lieberman's conflicts of interests:

Medical-ethics experts say Lieberman's relationship with Kyphon Inc., the Sunnyvale, Calif., kyphoplasty equipment company, is troublesome because the more favorable Lieberman's research and the more exposure given to kyphoplasty, the more valuable his Kyphon stock would have become.

'This is a classic tale of why you wind up with a lot of technologies that are marginally better or turn out not to be better at all than what you already had - because you rely on reports from innovators who have economic dogs in the fight,' said Dr. Arthur Caplan, chairman of the department of medical ethics at the University of Pennsylvania.

Also,

Lieberman 'is out there pushing the procedure at the same time that he had an equity interest in the company that stands to gain from his pushing the procedure, said Dr. Jerome P. Kassirer, a former editor of the New England Journal of Medicine who has written extensively on the influence of business on medicine. 'He shouldn't be doing that.'

Indeed, not.

So here we go again, with another illustration of the pervasiveness of the web of conflicts of interest that now binds together commercial health care coroporations, academic medicine, hospitals, physicians, government agencies, not-for-profit organizations, etc., etc., etc. Furthermore, this case illustrates how people with considerable financial interests in particular companies and products may write and speak favorably about the companies and products as if they were only expressing their academic and/or professional opinions.

The frequent failure of physicians and scientists in government agencies, academic medicine, and other not-for-profit health care organizations to even minimally disclose their financial interests in companies that provide health care products or services ought to breed increasing skepticism about the sorts of biases that may afflict current health care discourse. Unfortunately, it may start to provoke outright cynicism.

WHAT CAN BE DONE?

At a minimum, we need clear policies requiring detailed public disclosure of conflicts of interest afffecting all health care professionals and decision makers, with strong negative incentives to those who fail to disclose.

I would go further and say we need to ban at least the most egregious conflicts.

Without such policies, it is becoming impossible to tell the difference between scholarly discussion, and professional opinion on one hand, and commercial marketing on the other.