|The Ethics Question: Do Corporate Ties Raise Conflict of Interest Issues?|
Dec 03, 2009
By Markian Hawryluk / The Bulletin / December 03. 2009
The flow of money from device manufacturers to physicians has raised questions about conflicts of interest and inappropriate incentives, causing regulators to focus increased scrutiny on the ties between the two.
Now both lawmakers and the device industry have taken steps they hope will prevent large companies from gaming the system and will safeguard a physician's ability to both promote medical innovation and good patient care.
The controversy boiled over in 2007, when the U.S. Department of Justice accused five medical device manufacturers of using consulting agreements with orthopedic surgeons as inducements to use the companies' artificial hip and knee replacement products. The investigation revealed that this was a common practice by the companies from at least 2002 through 2006.
According to the DOJ, surgeons who had agreements with the companies were typically paid tens to hundreds of thousands of dollars per year for consulting contracts and were often lavished with trips and other expensive perks. The doctors were receiving kickbacks, the feds argued, to use a particular product.
Eventually the device manufacturers entered into a settlement with the federal government, agreeing to publicly disclose any payments made to physicians. According to a New York Times report, once the companies started the public reporting, payments to doctors from these companies dropped from $272 million in 2007 to $105 million in 2008.
At the same time, Congress proposed new laws requiring both drug and device companies to disclose payments made to physicians and the reasons behind those payments. Similar versions of the provision, known as sunshine laws, are included in both the House and the Senate health care reform bills.
Meanwhile, the Advanced Medical Technology Association, a trade group representing medical device manufacturers, rewrote its code of ethics to distinguish between collaborations with physicians who legitimately contribute to medical innovation and those who inappropriately influence medical decision-making. The trade group will list on its Web site, beginning Jan. 1, all the CEOs who have pledged to adhere to the code of ethics.
“We're for transparency. We recognize that there are very valuable relationships that extend between medical device companies and health care practitioners, such as physicians and others,” said Chris White, executive vice president for the group. “In our industry, to an extent greater than you see in other life sciences, these relationships are extremely close, and so it's important to provide transparency with regard to these relationships to eliminate any suspicion.”
White also expressed concern about physician ownership of other types of entities, such as distribution companies or group purchasing organizations that are primarily focused on sales.
“There are some physician-owned manufacturers that really don't lead to innovative breakthroughs, and they're not based on true collaboration, but rather based on opportunities to maximize profit, and those are subject to a different analysis altogether,” he said.
If passed, sunshine laws would require such investment to be disclosed as well.
Bend surgeon Dr. Knute Buehler, who has developed several medical devices both on his own and in collaboration with large device companies, said he supports the concept of full disclosure. But he's also seen the impact of the federal investigation on doctors' willingness to participate in the process.
“I do think it has stifled innovation,” he said. “During the whole Department of Justice investigation, there was very little innovation being done with medical device companies. There haven't been a lot of products developed in the last couple of years because designing physicians have been central to this process, and for the last couple of years, the physician part has been really limited.”
The disclosure that came about in the settlement as well as other measures to promote transparency have now allowed innovation to resume, he said.
Conflicts of interest
Critics have charged that arrangements between medical device companies and physicians can lead to incentives that undermine patient care.
“What patient wants his or her surgeon to decide between a product from which the surgeon makes no money, and a product sold by the surgeon's own company?” Eugene Elder, a Washington, D.C., lawyer wrote in an article for the Washington Legal Foundation. “When a surgeon who profits from every use of a particular medical device is faced with a decision whether to select that device, a competing device, or perhaps no device at all, the surgeon's financial interest may influence, and possibly corrupt, the treatment decision.”
Such concerns have prompted some to question whether practicing physicians should be involved in medical device development at all. If the financial incentives get in the way of patients receiving the best possible care, then maybe firewalls should be put in place.
But others argue that such actions would not only stifle medical innovation but also delay patient access to new technology. And while there is debate about how successful doctors are at ignoring economics when making medical decisions, they are faced with such issues every day when they are paid by procedure or test rather than by patient outcome.
“Physicians are fundamental to this process. There are conflict of interest issues, however, they can be managed,” said Dr. Aaron Kaplan, a professor of medicine at the Dartmouth Medical School in Hanover, N.H. “Efforts to remove physicians from the process will hurt the process.”
Kaplan said doctors who invent devices need to remain involved through the design and testing process, shepherding the invention through engineering, testing in animals and the initial testing in patients. But he cautioned that physician-entrepreneurs must take precautions to safeguard their primary responsibility to provide good care to patients.
“There are conflicts all the time that we're used to,” he said. “But fundamentally, the physician is the patient's advocate and when that gets confused, the doctor-entrepreneur has to figure out a mechanism to preserve that, which typically means having someone else take over the direct patient care responsibility.”
Kaplan said concerns over potential conflicts of interests are affecting how medical devices are now being developed. Such concerns are increasingly driving innovation out of academic medical settings, where payments from private industry are increasingly being viewed as problematic, and into private offices and clinics.
‘The American way'
Even those concerned about undue influence of medical device company payments to physicians don't necessarily believe doctors shouldn't be able to profit from their inventions.
“I don't think that's a problem. I think it's great when people invent stuff and it works and they make a fortune. I think that's the American way,” said Dr. Charles Rosen, a professor of orthopedic surgery at the University of California, Irvine, and the founder of the Association for Ethics in Spine Surgery. “Where I have an issue is when people have questionable devices, and companies have to make it appear that it's independently validated and not really reveal that all their consultants and people writing their papers are highly paid.”
It's particularly worrisome when paid consultants serve on committees that make decisions about how public or private health plans will treat new devices.
“It's the kiss of death if it's coded experimental,” Rosen said. “Sometimes the consultants for the highly paid companies are coding as experimental products that are really great because they stand to very much compete with the products that are out there.”
He believes sunshine laws could wind up leveling the playing field, allowing small companies with new and innovative products to compete on their own merits.
“I think it would be a tremendous benefit to medicine, ultimately making the best products and devices to rise to the surface, the bad ones to just sink,” he said. “If someone invents a great product and someone wants to consult for a company for a gazillion dollars a year, they have every right to do it. But if you're taking a public stance on a product, you cannot claim (objectivity). It's disingenuous.”
Markian Hawryluk can be reached at 541-617-7814 or email@example.com.