Orthopaedist-industry collaborations headed into Ôa perfect stormÕ

By Mary Ann Porucznik

March/April 2007

http://www.aaos.org/news/bulletin/marapr07/clinical1.asp

Former U.S. Attorney says financial conflicts of interest are the greatest threat to medical professional credibility and, as a public health issue, will compel continuous screening by all interested parties—including the government.

Working relationships between orthopaedic surgeons and medical device companies have resulted in both technologic advances and patients benefits, according to the clinicians, academics, and professional and industry representatives who were part of ÒThe Orthopaedic Surgeon and Industry Relationship: Conflict vs. CollaborationÓ symposium held during the AAOS Annual Meeting.

But one member of the panel, Kathleen (Katie) McDermott, JD, a partner with Blank, Rome and a former assistant U.S. attorney, was not so sanguine. In fact, she called the situation Òa perfect storm.Ó

Transforming the relationship
Moderator Joseph C. McCarthy, MD, reviewed the transforming factors in the relationship and the increasing interest and involvement by the federal government, which was triggered with the introduction of the Medicare and Medicaid programs. Beginning in 1972, with the first anti-kickback statutes, government oversight continued to increase through the passage of the False Claims Act in 1990.

Both physician organizations—including the American Medical Association, the American College of Physicians, the AAOS, and the Accreditation Council on Continuing Medical Education—and industry associations, such as the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Advanced Medical Technologies Association (AdvaMed), have issued guidelines covering interactions between healthcare professionals and industry. But increasing Medicare costs as well as concerns about the impact of financial arrangements on medical decision making continue to attract the attention of regulators.

As reported in the January/February issue of AAOS Now, the American Association of Hip and Knee Surgeons recently held a similar symposium on the topic. In both symposia, Lawrence D. Dorr, MD, presented the perspective of a clinical innovator; Stuart L. Weinstein, MD, provided the perspective of an academic researcher; Richard F. Kyle, MD, gave the AAOS perspective; Christopher L. White, JD, AdvaMed general counsel, discussed their efforts; and Ned Lipes, executive vice president, Stryker Corp., presented the perspective of one industry representative.

The other side of the coin
As the ÒdevilÕs advocate,Ó however, Ms. McDermott, in presenting the governmentÕs perspective, expressed a certain amount of cynicism regarding surgeon-industry relationships. ÒLooking at the documents,Ó she said, ÒitÕs not a pretty picture. There are all sorts of examples that are informing congressional and governmental perceptions, and physicians themselves have become ÔwhistleblowersÕ in bringing cases forward.Ó

The TAP Pharmaceutical case, for example, was brought by a physician whistleblower under the False Claims Act. Such cases are attracting the attention not only of federal prosecutors at the Department of Justice, but also of state attorneys general, who have both the resources and the political will to make changes, and state licensure boards.

ÒFinancial conflict of interest is the greatest threat to medical professional credibility,Ó she said, Òand a public health issue that will compel continuous screening by all interested parties.Ó

It wonÕt be the big guys who get hit, she said, but smaller arrangements. ÒA $400,000 royalty probably wonÕt be prosecuted, but an additional $20,000 in sample income will,Ó she said. ÒThe government tends to go after smaller issues, and thereÕs not a lot of caution in the medical profession about small deals. There is, however, plenty of evidence—from telephone tapes to e-mails—to indicate that many small deals have been made.Ó

An enforcement perspective
From an enforcement perspective, she noted, financial interest in a product selection or product use corrupts medical decision-making. Physicians have both market power and referral power, and regulatory agencies do not believe that hospitals can or will police this issue.

ÒThe government doesnÕt see this [physician-industry collaboration] as a way to develop new technologies and improve patient care,Ó she said. ÒTo them, such collaborations inhibit free market activities, stifle fair competition, create an uneven playing field, and distort access to equal care.Ó

The issue is so important, she noted, that when AdvaMed asked the Office of the Inspector General (OIG) for guidance, they had it within 30 days. ÒI worked for the U.S. AttorneyÕs office, and I never got a response from the OIG in that short a time!Ó said Ms. McDermott.

The enforcement power of the government is substantial, noted Ms. McDermott. In kickback or fraud cases, the company, the physician, and the hospital may all be subject to criminal prosecution. In addition, under the False Claims Act, the company and the physician may be subject to substantial fines. And while a major manufacturer may have the Òdeep pocketsÓ to pay, physicians could find their practices shut down and their futures ruined. Finally, there are administrative sanctions and exclusions, which may be the governmentÕs preferred course.

Tactics and traps
ÒI cannot tell you how many times IÕve heard ÔItÕs all about the money,ÕÓ said Ms. McDermott. ÒBut thatÕs like shouting ÔFire!Õ in a theatre or joking about a bomb in your suitcase at the airport. DonÕt make jokes!Ó

She warned that many phone conversations are taped, and that e-mails referencing Ògreedy docsÓ or Òyou have to pay to playÓ could easily become evidence against a physician. PowerPoint presentations that show a dollar sign above a patientÕs head are another problem.

Investigators are also looking into other areas that could affect physician-industry relationships. These include quality care prosecutions, research funding for individual physician practices and charitable donation foundations established by physicians.

ÒThere is a perception of industry as a weekend educator,Ó she explained. ÒA physician attends a weekend workshop and comes back and begins performing a new procedure. But is he or she really qualified? Or are these ÔuncredentialedÕ procedures? Will the hospital monitor them?Ó

Who will speak for you?
Professional standards could help influence perceptions, said Ms. McDermott. The industry guidelines, for example, are a positive influence. ÒThe public and government expect voluntary efforts to address these problems,Ó she said. ÒProfessional standards allow for leadership and voluntary changes by those who are most knowledgeable about the situation. Prosecutors evaluate both individual and corporate adherence to voluntary standards when making their decisions.Ó

The compliance initiative has to go further, she urged, citing a recent article in the Journal of the American Medical Association that said not enough is being done. And she urged physicians to educate their congressional representatives about the good aspects of industry-physician collaborations. ÒThey need to hear what I heard today,Ó she said. ÒIf you donÕt speak up for yourselves, whoÕs going to speak for you?Ó

Dr. McCarthy pointed out that this is just the first in a series of educational programs on this topic that the Academy has planned, and he urged attendees to visit the AAOS Web site (www.aaos.org/industryrelationships) for additional information and resources. AAOS fellows who have questions or are seeking guidance on industry relationship questions can e-mail industryconflicts@aaos.org

How real is the problem?

At the beginning of the session, audience members had a chance to weigh in on the reality of the industry-physician collaboration Òproblem.Ó HereÕs what they thought:

á                71 percent said there is currently both a perceived and a real conflict of interest between orthopaedic surgeons and orthopaedic implant companies.

á                56 percent said there is currently both a perceived and a real conflict of interest between orthopaedic surgeons and pharmaceutical

á                companies.

á                87 percent believe that orthopaedic surgeon–industry collaboration regarding patient care generally benefits patients.

á                80 percent believe that if an orthopaedic surgeon receives payments from a company that are ultimately considered to be illegal, both the orthopaedic surgeon and the company should be at risk legally.