Tuesday, November 06, 2007

A Few Answers, and Many More Questions About Device Manufacturers' Payments to Orthopedic Surgeons

With a big of digging, I have found some more media coverage of the story that began with deferred prosecution agreements a US Attorney made with four makers of orthopedic devices (Biomet, DePuy Orthopaedics (a unit of Johnson & Johnson), Zimmer Holdings, and Smith & Nephew), and an agreement allowing federal supervision of Stryker Orthopedics (a unit of Stryker Inc). The companies were charged with violating anti-kickback laws by paying orthopedic surgeons as "consultants" to use their products. The companies have all posted on their web-sites lists of physicians and physicians groups receiving such "consulting" payments this year. (The links: Biomet, DePuy, Smith & Nephew, Stryker, and Zimmer.) We posted about the initial coverage of these lists here.

There has been subsequent media coverage of these lists. David Voreacos reported for Bloomberg, first on the general context:

The five biggest makers of hip- and knee-implant devices disclosed the names of 1,805 medical consultants they paid this year, including 46 doctors or organizations that got $1 million or more.

The companies posted the names on their Web sites yesterday under Sept. 27 agreements with U.S. prosecutors to settle claims that they paid kickbacks to surgeons who used their products.

Biomet, a Warsaw, Indiana-based company taken private this year, hired 241 consultants, including three who made more than $1 million.

Johnson & Johnson's Depuy Orthopaedics Inc. paid more than $1 million to 10 consultants. Depuy ... listed 469 consultants.

Stryker, of Kalamazoo, Michigan, paid 201 consultants, including six who got more than $1 million.

Zimmer Holdings Inc. paid more than $1 million this year to 21 consultants. Zimmer paid 603 consultants.

The companies supply 95 percent of hips and knees used annually in 700,000 replacement surgeries in the U.S.

The hip and knee industry will generate about $9.7 billion in worldwide sales in 2007....

U.S. Attorney Christopher Christie said on Sept. 27 that the industry 'routinely violated the anti-kickback statute by paying physicians for the purpose of exclusively using their products.' He said 'a significant minority' of doctors got kickbacks for using company products.

Bloomberg noted some of the companies' responses, which were not terribly informative, e.g.from Biomet:

'Without consultant intellectual property, it would be impossible for us to deliver the products that we do,' [Biomet spokesman Bill] Kolter said.

From Smith&Nephew,

'Some of them have certain intellectual property that is part of the product, and some of the payments become royalty payments,' said David Shapiro, a spokesman for Smith & Nephew of London. 'Some of them are for training other doctors. Obviously, royalty payments are going to be larger than just compensating somebody for a couple of days of training.'

From Stryker,

'The services that physicians rendered in helping develop products and educate people about those products are valuable,' Stryker Chief Financial Officer Dean Bergy said.

From Zimmer,

'We are not elaborating beyond what we've posted, and what we've posted is pursuant to the deferred prosecution agreement,' Zimmer spokesman Brad Bishop said. Zimmer paid 603 consultants.

Bloomberg also reported on some particularly noteworthy payments, e.g., by DePuy which

paid between $6.675 million and $7 million each to Drs. Richard Scott and Thomas Thornhill of Brigham and Women's Hospital in Boston. Scott and Thornhill said they get royalty payments for the licensing of a total knee replacement prosthesis in 1986 and a hip replacement prosthesis in 1991. They said almost 2 million of the knee devices have been implanted.

'Neither of us keep any of the money we receive from consulting,' they said in a statement. 'Any money we have received from consulting is donated to charity.'

Depuy spokeswoman Sarah Colamarino said surgeons typically don't get royalty payments when he or other doctors implant a device for which that surgeon gets royalty payments [sic]. Scott and Thornhill said they get no royalties for implants by surgeons at Brigham and Women's Hospital.
Note that the surgeons did not state what charity received their "consulting" payments, what proportion of the money they received were royalties, and whether they kept these royalties, as opposed to "consulting" payments. Also note that the response by the DePuy spokeswoman as printed made no sense. The news article did not rule out that Thronton and Scott kept the bulk of the money paid by DePuy in 2007, conceivably more than $6,000,000 a piece.

Bloomberg also investigated a single large payment by Stryker,

Stryker paid more than $3 million to Dr. Anthony Hedley of the Arizona Institute for Bone & Joint Disorders in Phoenix. He referred a call to Yin Becker, a company vice president who didn't return a call.

The Bloomberg reporters attempt at investigation obviously did not get very far. The reporter had no more luck investigating a large payment by Zimmer,

The company paid $5.5 million to Dr. W. Norman Scott of New York, who wrote 'Dr. Scott's Knee Book' and was the doctor for the New York Knicks in the National Basketball Association for 27 years. Scott didn't immediately return a call for comment.

If nothing else, Bloomberg's reporting confirms that some orthopedic device companies paid out exceedingly large amounts to individual orthopedic surgeons. Some proportions of these payments were ascribed to consulting, educational activities, or royalties or licensing payments for patents or intellectual property. Some of the surgeons who received payments are very well known and influential.

The extent that the recipients were influenced by the often fabulous payments they received from the device companies remains unknown. Whether the recipients of these payments made any significant disclosures of these financial relationships is also an open question. The concerns are that some surgeons may have failed to disclose these financial relationships:

  • to patients for whom they made decisions about use of device
  • when teaching about the diagnosis, prognosis, or treatment of conditions for which these devices may be used
  • when writing or speaking on related topics

This story is a huge reminder about how conflicts of interest pervade current health care. It further illustrates that the size of some of the financial relationships that constitute such conflicts may be far larger than anyone previously thought.

As noted before, some people are concerned by how physicians may be influenced by gifts of pens, coffee mugs, and pizza lunches. If we should be concerned about coffee mugs, how much more should we be concerned by multi-million dollar royalties or consulting payments?

Note that the Bloomberg article apparently was the basis for a blog posting on GoozNews by Merrill Goozner. I took down a previous blog posting which covered some of the news reported above, because it was based on the erroneous assumption that Goozner himself had made the enquiries to physicians who received the payments reported in the Bloomberg article.


Unknown said...

I just received a new Stryker Triathlon artificial knee. My doctor told me he was the first in Canada to use this particular model and has been installing them for about two years. I didn't see his name on the list, but then, maybe the companies were only required to list American "consultants."

Having said that, I can understand payments to early customers, for feedback. That should stop after a short while.

Thanks for this post. I will link to it from my knee replacement blog

Anonymous said...

"This story is a huge reminder about how conflicts of interest pervade current health care. It further illustrates that the size of some of the financial relationships that constitute such conflicts may be far larger than anyone previously thought."

I don't follow your logic here, as most of the substantial payments made to doctors on this list are in the form of legal royalty payments. You question Drs. Thornhill and Scott who among the minority who have provided added color on the nature of the payments they receive. The dollar amount of payments received is irrelevant given they were received legally from patented intellectual property. How does a conflict of interest exist if they are not recieving royalties for the prostheses that are implanted at their hospital by themselves or their colleagues?

Roy M. Poses MD said...

The issue here is not the legality of the payments the doctors received. No one is questioning the legality of their royalty payments, to my knowledge.

The issue here is conflict of interest. If a doctor receives a perfectly legal payment from a company that makes a medical device, that relationship may tend to make the doctor think more favorably about that company and that device, and less inclined to criticize either.

Presumably, the larger the payment, the greater is this effect.

But a doctor is supposed to make the best possible decisions for each individual payment. The concern is that the conflict of interest might influence the physician to use the device for patients for whom it is not the best choice.

Furthermore, the two Harvard doctors are very prominent academics. They not only take care of patients, but teach, publish articles, give talks, and serve on committees. The concern is that their conflicts of interest may influence these activities. Yet as academics, they are supposed to be impartially discovering and disseminating knowledge, not favoring particular companies or products.

Anonymous said...


It seems that you're inventing a conflict of interest where there doesn't appear to be one. The Harvard doctors receive royalty payments for the licensing of prostheses which they patented, and receive nothing when their own hospital uses those products.

Are you advocating that doctors don't receive financial compensation for their patents?

The wrongdoing in this case has to do with device manufacturers' providing kickbacks to surgeons using their products. This doesn't mean that every doctor that has a business relationship with these companies is therefore guilty. Neither of the Harvard docs to my knowledge has been accused of taking kickbacks, and it seems a stretch to assume that they are guilty of anything based on nothing more than the fact that they made a lot of money on devices which they invented.

Roy M. Poses MD said...

Let's try this again.

First of all, I said nothing about kickbacks, and certainly did not accuse anyone of taking kickbacks, so the last paragraph is something of a non sequitur.

Certainly, the Harvard doctors are entitled to royalties or licensing fees for their patents.

But if they choose to accept such payments, they need to disclose them and take responsibility for any effect these payments might have on their practices or other professional or academic activities.

Here is the problem. If a doctor is collecting very large royalties or licensing fees because of sales of a particular product, in this case, a joint implant made by a specific company, that financial relationship is likely to affect the doctor's thinking about the company, its products, and the specific joint implant, joint implants in general. The financial relationship is likely to prompt the doctor to view the company, its products, the particular joint implant, and joint implants in general more favorably. The financial relationship thus possibly could make the doctor more predisposed to use that specific implant, to use that company's products, or to use joint implants in general.

The particular doctors in question do not only practice their specialty, but also serve as highly ranked faculty in one of the country's most acclaimed medical schools. Therefore, they also teach, give talks at meetings, write papers, and serve on committees and panels, etc. The doctors' financial relationships may predispose them to favor the specific implant, the company's products, the company, or joint implants in general during any of these activities.

Thus, at a minimum, I would suggest that the doctors ought to clearly disclose their financial relationships in detail to any patients who might be candidates for a joint implant.

I would also suggest that at a minimum the doctors ought to clearly disclose these relationships in detail when teaching, giving presentations, writing, serving on panels or committees etc when these activities have anything to do with joint implants, the diseases that might require them, or related issues.

Unknown said...

Sure. While they're at it, they can disclose that they DEVELOPED these implants using their expertise to determine what is most appropriate for patients. I guess I'm not surprised that they would feel good about those implants, royalties or no. Further, since they don't get royalties on what they personally implant, they are free to use whatever they please with no impact on their financial reward.

With respect to the fact that these surgeons are more than just surgeons: who should be involved in developing implants? Low-ranked faculty from unacclaimed medical schools?

Let me see if I can summarize your logic.

1. The most prominent surgeons are involved in developing implants.

2. Those implants, which reflect these highly regarded surgeons' ideas, appropriately and legally generate royalties.

3. The surgeons who developed these implants, ie, applying their expertise to the creation of devices which they believe reflect the best treatment possible, are pre-disposed to use those implants.

4. Therefore, conflict.

If I ever need a knee replaced, I'm going to look for the biggest royalty payment I can find, because that tells me a prominent surgeon has been invited by a leading manufacturer to develop a product, and that product has been so well-received that it has led to commercial success. Then I'm going to insist that the surgeon use the implant he developed.

I'll take a surgeon with that kind of "conflict" every time.