June 12, 2008
The Doctor vs. Device Makers
Dr. Charles Rosen is on a mission to end the conflicts of interest between manufacturers and physicians
In February, spine surgeon Dr. Charles D. Rosen stood before the Senate Special Committee on Aging and chastised the medical device industry for its unethical marketing practices. Rosen, a professor of orthopedic surgery at the University of California at Irvine, told legislators that surgeons often receive huge consulting fees from companies in return for using the manufacturers' products or promoting them as participants of medical societies and business ventures. "Patients usually don't know of this conflict, which leads frequently to unnecessary implants and surgery," he told 20 senators.
Rosen, 53, isn't the first to sound such alarms. But his testimony carries unusual weight with lawmakers because of his reputation as a passionate opponent of medical conflicts of interest. In 2006, Rosen founded the Association for Ethics in Spine Surgery to educate patients about how industry-physician ties can influence treatment decisions. About 270 doctors have either joined the association or applied for membership, which entails vowing not to accept consulting fees, royalties, or other compensation from any company whose products they use. When Rosen isn't teaching residents or operating on patients, he's out proselytizing for a bill called the Physician Payments Sunshine Act of 2008, which would establish a national database listing payments and other gifts companies give to doctors.
In orthopedics, gift-giving is rampant. That was evident last winter, when Zimmer Holdings (ZMH) and four other large device makers agreed, as part of a $311 million settlement with the Justice Dept., to post lists of their paid consultants on their Web sites. Zimmer disclosed that it had handed over $86 million to more than 750 hospitals, doctors, and medical associations in 2007. The DOJ had alleged that some of those payments were not legitimate consulting fees but rather illegal kickbacks—de facto rewards for physicians who used certain products heavily. The companies did not admit wrongdoing, but they agreed to update the lists regularly.
The case, and subsequent outing of thousands of richly paid doctors, sparked a massive rethinking among the five companies about how best to work with physicians. It's not just about hips and knees. On Apr. 18, Warsaw (Ind.)-based Zimmer released a new five-point "compliance model" laying out procedures for engaging surgeons as consultants. Among the no-no's: making gifts to physicians and charitable contributions that could be construed as marketing gestures. The company says the new policies will be applied to all its businesses, including its $197 million-a-year spine unit.
Rosen dismisses such pledges as "lip service." And he believes they won't stop federal lawmakers or state attorneys from expanding their investigations and possibly pursuing individual doctors who have entered into questionable consulting deals. Spinal devices could be the next big target. Artificial discs and other products used to fix aching backs account for $3.8billion of the $10 billion-a-year orthopedic devices market. And the segment is growing at a 12% annual clip.
Perusing Zimmer's revised policies, Rosen says he saw little that would prevent salespeople from giving physicians kickbacks under the guise of consulting arrangements. "A physician shouldn't be paid a royalty because he redesigned a screw head on a product. He should get a reasonable hourly fee," Rosen contends. Zimmer's policy says the company will "establish new engagement and compensation structures" for physicians, but it doesn't say how, Rosen complains. In an e-mail, a Zimmer spokesperson says the company is working with an independent consultant "to determine if there are compensation modelsthat would eliminate even the appearance of inappropriate incentives to physician-developers."
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