Implant Makers Forced to Disclose Gifts to Orthopaedic Surgeons

By September 2013, a list of payments made to physicians by medical device or drug companies – including research grants, stock options, consulting fees and various gifts – will be available to the public.

The new regulation was built into the Patient Protection and Affordable Care Act (ObamaCare) and is called the Physician Payments Sunshine Act. The law requires that device and drug companies report all payments over $10 made to doctors in 2012 by March 31, 2013, in order to be made public by September.

The new regulation not only redefines the relationship between the government and the drug and device industry, but also between physicians and the industry. Experts believe the new database will be especially helpful to hip and knee implant patients by allowing them to determine whether their doctors are being compensated by companies making the devices.

Senators who introduced the bill believe that physicians who receive benefits from drug and device companies are influenced to use the more pricey products, possibly compromising treatment of the patient.

Ashley Glacel, spokeswoman for the Senate Special Committee on Aging, which spearheaded the original bill, told Kaiser Health News: "We hope this lowers health care costs and strengthens patient-doctor relationships."

Over the past few years, the medical device industry has been the target of several government probes alleging that companies bribe doctors to use their products.

Much of the controversy has surrounded artificial joint manufacturers. In 2007, four implant makers — DePuy, Biomet,Smith & Nephew and Zimmer Holdings — agreed to pay $310 million in fines to settle federal charges over questionable doctor payments. A fifth company, Stryker, was also investigated, but escaped prosecution because it cooperated.

Benefits for Patients

While the new regulation should help curb Medicare fraud and lower health care costs, it will also benefit individual patients.

In studies of patients in clinical trials, research suggests that people are particularly troubled when they find out that doctors treating them in the trials are receiving stock in the medical companies. "They somehow felt that this physician could do something in the trial that could make the company a lot of money, which would then make him a lot of money," Kevin P. Weinfurt of Duke University told Kaiser Health News.

More recently, the controversy over medical device companies paying doctors consulting fees has resurfaced. Stryker, which escaped federal prosecution in 2007 over doctor kickbacks, is now facing mounting lawsuits over its Rejuvenate and ABG II hip implants after recalling them in 2012.

Branko Obradovic and Scott Ebert are two of the patients who have filed lawsuits against Stryker, claiming crippling injury from the faulty hips. Both were disturbed to learn that the surgeon who implanted the devices, Robert B. Zann, received $225,000 to $250,000 from Stryker for his consulting services, plus between $25,000 and $50,000 for other services and less than $25,000 for research services.

Critics Say Database Will Impede Innovation

The new regulation also has its critics, most notably doctors.

Some doctors believe that the new program will impede innovation by curbing collaboration between doctors and drug and device companies. Dr. Thomas Stossel, a professor at Harvard – who has accepted consulting fees from pharmaceutical companies — believes the issue has been blown out of proportion.

"What's wrong with a company buying me lunch or giving me a tote bag?" Stossel commented to Kaiser Health News.

Other critics say that the law only applies to physicians and teaching hospitals, while gifts to other medical professionals like nurses may still go unreported.

The database is expected to be accessible by Sept. 13, 2013, and will include detailed searches by name, type of gift received and other specifics.