Joint Replacement Cartel: headquarters in Warsaw, Indiana

PAYING TILL IT HURTS

A Trip Abroad

Part 3: Joint Replacement

For Medical Tourists, Simple Math

By ELISABETH ROSENTHAL | Published: August 3, 2013 New York Times

FiDA highlight added

WARSAW, Ind. — Michael Shopenn’s artificial hip was made by a company based in this remote town, a global center of joint manufacturing. But he had to fly to Europe to have it installed.

Mr. Shopenn, 67, an architectural photographer and avid snowboarder, had been in such pain from arthritis that he could not stand long enough to make coffee, let alone work. He had health insurance, but it would not cover a joint replacement because his degenerative disease was related to an old sports injury, thus considered a pre-existing condition.

Desperate to find an affordable solution, he reached out to a sailing buddy with friends at a medical device manufacturer, which arranged to provide his local hospital with an implant at what was described as the “list price” of $13,000, with no markup. But when the hospital’s finance office estimated that the hospital charges would run another $65,000, not including the surgeon’s fee, he knew he had to think outside the box, and outside the country.

“That was a third of my savings at the time,” Mr. Shopenn said recently from the living room of his condo in Boulder, Colo. “It wasn’t happening.”

“Very leery” of going to a developing country like India or Thailand, which both draw so-called medical tourists, he ultimately chose to have his hip replaced in 2007 at a private hospital outside Brussels for $13,660. That price included not only a hip joint, made by Warsaw-based Zimmer Holdings, but also all doctors’ fees, operating room charges, crutches, medicine, a hospital room for five days, a week in rehab and a round-trip ticket from America.

“We have the most expensive health care in the world, but it doesn’t necessarily mean it’s the best,” Mr. Shopenn said. “I’m kind of the poster child for that.”

As the United States struggles to rein in its growing $2.7 trillion health care bill, the cost of medical devices like joint implants, pacemakers and artificial urinary valves offers a cautionary tale. Like many medical products or procedures, they cost far more in the United States than in many other developed countries.

Makers of artificial implants — the biggest single cost of most joint replacement surgeries — have proved particularly adept at commanding inflated prices, according to health economists. Multiple intermediaries then mark up the charges. While Mr. Shopenn was offered an implant in the United States for $13,000, many privately insured patients are billed two to nearly three times that amount.

An artificial hip, however, costs only about $350 to manufacture in the United States, according to Dr. Blair Rhode, an orthopedist and entrepreneur whose company is developing generic implants. In Asia, it costs about $150, though some quality control issues could arise there, he said.

So why are implant list prices so high, and rising by more than 5 percent a year? In the United States, nearly all hip and knee implants — sterilized pieces of tooled metal, plastic or ceramics — are made by five companies, which some economists describe as a cartel. Manufacturers tweak old models and patent the changes as new products, with ever-bigger price tags.

Generic or foreign-made joint implants have been kept out of the United States by trade policy, patents and an expensive Food and Drug Administration approval process that deters start-ups from entering the market. The “companies defend this turf ferociously,” said Dr. Peter M. Cram, a physician at the University of Iowa medical school who studies the costs of health care.

Though the five companies make similar models, each cultivates intense brand loyalty through financial ties to surgeons and the use of a different tool kit and operating system for the installation of its products; orthopedists typically stay with the system they learned on. The thousands of hospitals and clinics that purchase implants try to bargain for deep discounts from manufacturers, but they have limited leverage since each buys a relatively small quantity from any one company.

In addition, device makers typically require doctors’ groups and hospitals to sign nondisclosure agreements about prices, which means institutions do not know what their competitors are paying. This secrecy erodes bargaining power and has allowed a small industry of profit-taking middlemen to flourish: joint implant purchasing consultants, implant billing companies, joint brokers. There are as many as 13 layers of vendors between the physician and the patient for a hip replacement, according to Kate Willhite, a former executive director of the Manitowoc Surgery Center in Wisconsin.

Hospitals and orthopedic clinics typically pay $4,500 to $7,500 for an artificial hip, according to MD Buyline and Orthopedic Network News, which track device pricing. But those numbers balloon with the cost of installation equipment and all the intermediaries’ fees, including an often hefty hospital markup.

That is why the hip implant for Joe Catugno, a patient at the Hospital for Joint Diseases in New York, accounted for nearly $37,000 of his approximately $100,000 hospital bill; Cigna, his insurer, paid close to $70,000 of the charges. At Mills-Peninsula Health Services in San Mateo, Calif., Susan Foley’s artificial knee, which costs about the same as a hip joint, was billed at $26,000 in a total hospital tally of $112,317. The components of Sonja Nelson’s hip at Sacred Heart Hospital in Pensacola, Fla., accounted for $30,581 of her $50,935 hospital bill. Insurers negotiate discounts on those charges, and patients have limited responsibility for the differences.

The basic design of artificial joints has not changed for decades. But increased volume — about one million knee and hip replacements are performed in the United States annually — and competition have not lowered prices, as would typically happen with products like clothes or cars. “There are a bunch of implants that are reasonably similar,” said James C. Robinson, a health economist at the University of California, Berkeley. “That should be great for the consumer, but it isn’t.”

‘Sticky Pricing’

The American health care market is plagued by such “sticky pricing,” in which prices of products remain high or even increase over time instead of dropping. The list price of a total hip implant increased nearly 300 percent from 1998 to 2011, according to Orthopedic Network News, a newsletter about the industry. That is a result, economists say, of how American medicine generally sets charges: without government regulation or genuine marketplace competition.

“Manufacturers will tell you it’s R&D and liability that makes implants so expensive and that they have the only one like it,” said Dr. Rory Wright, an orthopedist at the Orthopedic Hospital of Wisconsin, a top specialty clinic. “They price this way because they can.”

Zimmer Holdings declined to comment on pricing. But Sheryl Conley, a longtime Zimmer manager who is now the chief executive of OrthoWorx, a local trade group in Warsaw, said that high prices reflected the increasing complexity of the joint implant business, including more advanced materials, new regulatory requirements and the logistics of providing a now huge array of devices. “When I started, there weren’t even left and right knee components,” she said. “It was one size fits all.”

Mr. Shopenn’s Zimmer hip has transformed his life, as did the replacement joint for Mr. Catugno, a TV director; Ms. Foley, a lawyer; and Ms. Nelson, a software development executive. Mr. Shopenn, an exuberant man who maintains a busy work schedule, recently hosted his son’s wedding and spent 26 days last winter teaching snowboarding to disabled people.

His joint implant and surgery in Belgium were priced according to a different logic. Like many other countries, Belgium oversees major medical purchases, approving dozens of different types of implants from a selection of manufacturers, and determining the allowed wholesale price for each of them, for example. That price, which is published, currently averages about $3,000, depending on the model, and can be marked up by about $180 per implant. (The Belgian hospital paid about $4,000 for Mr. Shopenn’s high-end Zimmer implant at a time when American hospitals were paying an average of over $8,000 for the same model.)

“The manufacturers do not have the right to sell an implant at a higher rate,” said Philip Boussauw, director of human resources and administration at St. Rembert’s, the hospital where Mr. Shopenn had his surgery. Nonetheless, he said, there was “a lot of competition” among American joint manufacturers to work with Belgian hospitals. “I’m sure they are making money,” he added.

Dr. Cram, the Iowa health cost expert, points out that joint manufacturers are businesses, operating within the constraints of varying laws and markets.

“Imagine you’re the C.E.O. of Zimmer,” he said. “Why charge $1,000 for the implant in the U.S. when you can charge $14,000? How would you answer to your shareholders?” Expecting device makers “to do otherwise is like asking, ‘Couldn’t Apple just charge $50 for an iPhone?’ because that’s what it costs to make them.”

But do Americans want medical devices priced like smartphones? “That,” Dr. Cram said, “is a different question.”

A Miracle for Many

When joint replacement surgery first became widely used in the 1970s, it was reserved for older patients with crippling pain from arthritis, to offer relief and restore some mobility. But as technology and techniques improved, its use broadened to include younger, less debilitated patients who wanted to maintain an active lifestyle, including vigorous sports or exercise.

In the first few decades, implants were typically cemented into place. But since the 1980s, many surgeons have used implants made of more sophisticated materials that allow the patient’s own bone to grow in to hold the device in place. For most patients, implants have proved miraculous in improving quality of life, which is why socialized medical systems tend to cover them. Per capita, more hip replacements are done in Britain, Sweden and the Netherlands, for example, than in the United States.

Motivated in part by science and in part by the need to create new markets, joint makers churn out new designs that are patented, priced higher and introduced with free training courses for surgeons. Some use more durable materials so that a patient requiring a hip implant at age 40 or 50 might rely on it longer than the standard 20 years, while other models are streamlined and require smaller incisions.

Zimmer got a big sales bump a few years ago when it began promoting its new “female knee,” a slightly slimmer version of its standard design, in an advertising campaign directed at patients. Hospitals on average pay about $800 more to buy the gender-specific knee implants, according to MD Buyline.

Many doctors say that for most patients, older, standard implants with a successful track record are appropriate. Expensive modifications make no difference for the typical patient, but they drive up prices for all models and have sometimes proved to be deeply flawed, they say.

In the last few years, joint manufacturers have faced lawsuits and have settled claims with patients after new, all-metal implants, which were meant to be more durable than the standard version, had unusually high failure rates. As for those “female knees,” a study featured at the meeting of the American College of Orthopedic Surgeons this year concluded, “While we certainly use the female components frequently in surgery, we don’t detect any objective improvement in clinical outcomes.”

That is why Dr. Scott S. Kelley, an orthopedist affiliated with Duke University Medical Center, generally tries to dissuade patients who request “new, improved” joints. “I tell them: ‘That’s taking a big risk for the potential of a few percentage points of improvement. You wouldn’t invest your retirement account this way.’ ”

A Town’s Lifeblood

The power and profits of the medical device industry are on display here in Warsaw, which has trademarked itself the Orthopedic Capital of the World. Four of the big five joint manufacturers in the world are based in the United States; the other is in Britain. Three of these giants — Zimmer, Biomet and DePuy, a division of Johnson & Johnson — have their headquarters here, a town of 14,000.

An industry that began as a splint-making shop in 1895 has made Warsaw the center of a global multibillion-dollar business. The companies based here produce about 60 percent of the hip and knee devices used in the United States and one-third of the world’s orthopedic sales volume, local officials said. Nearly half the jobs in Kosciusko County, where Warsaw is, are tied to the industry. Residents joke that a mixed marriage is when one spouse works for Zimmer and the other for DePuy.

The industry’s benefits are evident. The county has the lowest unemployment rate in Northern Indiana, and the median family income of $50,000 puts it significantly above the state average. The town boasts lush golf courses and streets lined with spacious homes. The lobby of the elegant City Hall, which is in a restored 1912 bank, features plaques about device manufacturers.

“We eat, sleep and breathe orthopedics,” said Ms. Conley of OrthoWorx, which she said was set up to “plan for the future of the orthopedic industry here.” OrthoWorx’s board of directors includes executives from Biomet and DePuy.

With a high-tech industry as its lifeblood, Ms. Conley said, Warsaw needed to attract engineers and doctors from afar and train local youths for “the business.” It has upgraded the public schools and helped create programs at local colleges in orthopedic regulation and advanced machinist techniques.

Officials at OrthoWorx say the device makers do not discuss “competitive issues” among themselves, including the prices of implants, even as employees stand together watching their children play baseball. Still, it is in everyone’s interest not to undercut the competition. In 2011, all three manufacturers had joint implant sales exceeding $1 billion and spent about only 5 percent of revenues on research and development, compared with 20 percent in the pharmaceutical industry, said Stan Mendenhall, the editor of Orthopedic Network News. They each paid their chief executives over $8 million.

“It’s amazing to think there is $5 billion to $6 billion going through this little place in Northern Indiana,” said Mr. Mendenhall, adding that the recession has meant only single-digit annual revenue growth rather than the double-digit growth of the past.

Device makers have used some of their profits to lobby Congress and to buy brand loyalty. In 2007, joint makers paid $311 million to settle Justice Department accusations that they were paying kickbacks to surgeons who used their devices; Zimmer paid the biggest fine, $169.5 million. That year, nearly 1,000 orthopedists in the United States received a total of about $200 million in payments from joint manufacturers for consulting, royalties and other activities, according to data released as part of the settlement.

Despite that penalty, payments continued, according to a paper published in The Archives of Internal Medicine in 2011. While some of the orthopedists are doing research for the companies, the roles of others is unclear, said Dr. Cram, one of the study’s authors.

Although only a tiny percentage of orthopedists receive payments directly from manufacturers, the web of connections is nonetheless tangled.

Companies “build a personal relationship with the doctor,” said Professor Robinson, the Berkeley economist. “The companies hire sales reps who are good at engineering and good at golf. They bring suitcases into the operating room,” advising which tools might work best among the hundreds they carry, he said. And some studies have shown that operations attended by a company representative are more likely to use more and costlier medical equipment. While some hospitals have banned manufacturers’ representatives from the operating room, or have at least blocked salesmanship there, most have not.

No Gift Shop

There are, of course, a number of factors that explain why Mr. Shopenn’s surgery in Belgium would cost many times more in the United States. In America, fees for hospitals, scans, physical therapy and surgeons are generally far higher. And in Belgium, even private hospitals are more spartan.

When Mr. Shopenn arrived at the hospital, he was taken aback by the contrast with NewYork-Presbyterian Hospital, where his father had been a patient a year before. The New York facility had “comfortable waiting rooms, an elegant lobby and newsstands,” Mr. Shopenn remembered.

But in Belgium, he said, “I was immediately scared because at first I thought, this is really old. The chairs in the waiting rooms were metal, the walls were painted a pale green, there was no gift shop. But then I realized everything was new. It was just functional. There wasn’t much of a nod to comfort because they were there to provide health care.”

The pricing system in Belgium does not encourage amenities, though the country has among the lowest surgical infection rates in the world — lower than in the United States — and is known for good doctors. While most Belgian physicians and hospitals are in business for themselves, the government sets pricing and limits profits. Hospitals get a fixed daily rate and surgeons receive a fee for each surgery, which are negotiated each year between national medical groups and the state.

While doctors may charge more than the rate, few do so because most patients would refuse to pay it, said Mr. Boussauw, the hospital administrator. Doctors and hospitals must provide estimates. European orthopedists tend to make about half the income of their American counterparts, whose annual income averaged $442,450 in 2011, according to a survey by the Commonwealth Fund, a foundation that studies health policy.

Belgium pays for health care through a mandatory national insurance plan, which requires contributions from employers and workers and pays for 80 percent of each treatment. Except for the poor, patients are generally responsible for the remaining 20 percent of charges, and many get private insurance to cover that portion.

Mr. Shopenn’s surgery, which was uneventful, took place on a Tuesday. On Friday he was transferred for a week to the hospital’s rehabilitation unit, where he was taught exercises to perform once he got home.

Twelve days after his arrival, he paid the hospital’s standard price for hip replacements for foreign patients. Six weeks later he saw an orthopedist in Seattle, where he was living at the time, to remove stitches and take a postoperative X-ray. “He said there was no need for further visits, that the hip looked great, to go out and enjoy myself,” Mr. Shopenn said.

                       

With baby boomers determined to continue skiing, biking and running into their 60s and beyond, economists predict a surge in joint replacement surgeries, and more procedures for younger patients. The number of hip and knee replacements is expected to roughly double between 2010 and 2020, according to Exponent, a scientific consulting firm, and perhaps quadruple by 2030. If insurers paid $36,000 for each surgery, a fairly typical price in the commercial sector, the total cost would be $144 billion, about a sixth of the nation’s military budget last year.

So far, attempts to bring down the price of medical devices have been undercut by the industry.

When Dr. Daniel S. Elliott of the Mayo Clinic decided to continue using an older, cheaper valve to cure incontinence because studies showed that it was just as good as a newer, more expensive model, the manufacturer raised its price.

“If there was a generic, I’d be there tomorrow,” he said.

With artificial joints, cost-trimming efforts have been similarly ineffective. Medicare does not negotiate directly with manufacturers, but offers all-inclusive payments for surgery to hospitals to prompt them to bargain harder for better implant prices. Instead, hospitals complain that acquiring the implant consumes 50 percent to 70 percent of Medicare’s reimbursement, which now averages $12,099, up 25 percent from $9,645 in 1993. Meanwhile, surgeons’ fees have dropped by nearly half.

With the federal government unwilling to intervene directly, some doctors and insurance plans are themselves trying to reduce the costs by mandating preset prices or forcing more competition and transparency.

After concluding that hip replacements billed at $100,000 yielded no better results than less expensive ones, the California Public Employees’ Retirement System, or Calpers, told members that it would pay hospitals $30,000 for a hip or knee replacement, and dozens of hospitals have met that number.

Dr. Wright’s orthopedic hospital near Milwaukee has driven down payments for joints by more than 30 percent by resolving to use only two types of hip implants and requiring blind bids directly from the manufacturers; part of the savings is passed on to patients.

The Affordable Care Act tries to recoup some of the medical device manufacturers’ profits by imposing a 2.3 percent tax on their revenues, effective this year. But Brad Bishop, the executive director of OrthoWorx and a former Zimmer executive, said that the approach would harm an innovative American industry, and that the cost would ultimately be borne by joint replacement patients “whose average age is 67.” He argued that the best way to reduce the cost of joint replacement surgery was to rescind the tax and decrease government interference.

The medical device industry spent nearly $30 million last year on lobbying, according to the Center for Responsive Politics. The Senate moved to repeal the tax, and the House is expected to take it up this fall. The bill’s supporters included both senators from Indiana.

Mr. Shopenn’s new hip worked so well that a few months after returning from Belgium he needed a hernia operation — a result of too much working out at the gym. He was home by 4 p.m. the day of the outpatient surgery, but the bill came to $16,500. Though his insurance company covered the procedure, he called the hospital’s finance department for an explanation.

He remembers in particular a “surreal” discussion with a “very nice” administrator about a $750 bill for a surgical drain, which he called “a piece of plastic in a sealed bag.”

“It was mind-boggling to me that the surgery could possibly cost this much,” he said, “after what I’d just done in Belgium.”

http://www.npr.org/2013/08/07/209585018/paying-till-it-hurts-why-american-health-care-is-so-pricey

NPR Fresh Air: Terry Gross interviews NYT ElisabethRosenthal 8/7/2013

It costs $13,660 for an American to have a hip replacement in Belgium; in the U.S., it's closer to $100,000.

Americans pay more for health care than people in many other developed countries, and Elisabeth Rosenthal is trying to find out why. The New York Times correspondent is spending a year investigating the high cost of health care. The first article in her series, "Paying Till It Hurts," examined what the high cost of colonoscopies reveals about our health care system; the second explained why the American way of birth is the costliest in the world; and the third, published this week in The Times, told the story of one man who found it cheaper to fly to Belgium and have his hip replaced there, than to have the surgery performed in the U.S.

Rosenthal has also been investigating why costs for the same procedure can vary so much within the U.S. — by thousands of dollars, in some cases — depending on where it's being performed. Before becoming a journalist, Rosenthal trained as a doctor and worked in the emergency room of New York Hospital, now part of New York-Presbyterian Hospital.

She joins Fresh Air's Terry Gross to talk about why American medical bills are so high, and what needs to change.

Enlarge image

Rosenthal has worked at The New York Times as an international environmental correspondent, a reporter in the Beijing bureau, and a metro reporter covering health and hospitals.

Courtesy of The New York Times

Interview Highlights

On the goal of her health care series

"[The purpose is] to make Americans aware of the costs we pay for our health care. Because so many of us have insurance and we don't see the bills, we tend to think of health care as free. 'Why not get that colonoscopy? It doesn't cost anything. What's the difference if my hip replacement costs $100,000? I'm not paying.' But, in fact, we're all paying. And as we know, health care is a huge cause of individual bankruptcies now. Copays and deductibles are going up, and the nation — because it pays for a lot of medical care and subsidizes a lot of medical care — just can't afford the way we're doing this anymore."

On the man who went to Belgium to get a hip replacement

"In Belgium, he paid $13,660 for everything. That included his new hip implant, the surgeon's fees, the hospital fees, a week in rehab and a round-trip plane ticket from the U.S., soup to nuts.

"Now, if he had done that surgery in the U.S, it would've been billed at somewhere between $100,000 and $130,000 at a private hospital. ... So there's a huge difference. In fact, this gentleman, Mr. Shopenn, was a great consumer, and he tried to have it done in the U.S., and he priced out joint implants and found that the wholesale joint implant cost ... was $13,000. So in the U.S., for that $13,000 he could get a joint — a piece of metal and plastic and ceramic — whereas in Europe he could get everything."

On joint-makers keeping prices high

"You would think that if five different companies were making candy bars, that would drive the price of candy bars lower. But if five different companies are making joints and trying to sell them at $10,000 a piece, it's really in no one's interest to say, 'Hey, guess what guys? I'm going to sell mine for $1,000 because that's what it really costs me to make it.' Because then everyone loses money; the whole industry kind of implodes."

On the challenge of standardizing medical equipment

"It's hard to get the companies to, say, standardize the equipment ... so you can use a generic system to implant any brand of joint. It's not in their interest to do that. It's like saying to Apple and Microsoft, 'We want all of your programs to be completely interchangeable.' At some level, at a business level, you want your brand distinct, and you want to keep people in the universe of your brand. In many ways, it's a business decision as much as a medical decision."

On how billing practices in the U.S. compare to those in Europe

"Routinely, for most procedures in other countries, patients stay in the hospital longer; their hospital bills are much less. They tend to see things as a package. I think one of the most striking things when you look at the Belgian hospital bill, as opposed to the U.S. one, is on the U.S. hospital bill for a joint replacement, you see things like operating room fees, recovery room fees. And those [were on] one of the bills I looked at: operating room fees, $13,000; recovery room fees, $6,000; facility fees, x-thousand dollars.

"If you look at a European bill, those things don't exist. And you know, in fact, it was kind of funny when I started on this series — although sad in another way — when I would call some of the European hospitals and say, 'Well, what's your facility fee on that? What's your operating room fee?' and there was this puzzled pause at the other end of the line where they said, 'What do you mean an operating room fee? You can't do the surgery without an operating room. That's a part of our day rate for the hospital. It's all included.' "

On pregnancy costs in the U.S. versus Europe

"Because we pay one by one by one, we have this kind of more-is-better attitude, or 'Why not check and see if the baby is in good position? Why not check and see if the baby is growing?' Whereas in most other countries, the care of a pregnant woman is kind of dictated purely by medicine, what needs to be done. So it's not that in these European countries they aren't getting their prenatal testing and they're not getting their prenatal scans — they are, they're just not getting as many as we do. Because we kind of tend to use a lot of them for like-to-know rather than need-to-know, and again, that gets very, very expensive."

On what needs to change

"Every part of the system needs to rethink the way it's working. Or maybe what I'm really saying is we need a system instead of 20, 40 components, each one having its own financial model, and each one making a profit."

My testimony to scrap 510(k) FDA approvals of implanted medical devices 6/13/13

Implanted transvaginal mesh is a bad idea: you think!

Tempers Flare at First FederalTransvaginal Mesh Trial

Posted July 31st, 2013  FiDA highlight

By Doug Allen

CHARLESTON, W.Va. – Physicians dominated the second day of testimony Tuesday in the country’s first federal trial to determine if a transvaginal mesh manufacturer is responsible for injuries to a patient. A doctor who consulted for C.R. Bard Inc. testified that the company knew the resin used to manufacture the mesh should not be permanently implanted in the human body but refused to disclose that to surgeons.

Cisson v. C.R. Bard Inc. is a bellwether case for the more than 23,000 cases involving transvaginal mesh combined in the U.S. District Court for the Southern District of West Virginia. Judge Joseph R. Goodwin is overseeing all of the cases.

In 2009, Dr. Brian Raybon implanted Bard’s Avaulta Plus device into Donna Cisson, the patient at the center of the lawsuit. He spent several hours on the witness stand Tuesday, describing Cisson’s condition and the steps he took to treat it.

Cisson suffered from symptoms like involuntary loss of gas and urine and was diagnosed with pelvic organ prolapse and stress urinary incontinence, Raybon said. He recommended the Avaulta Plus, and Cisson, a nurse, agreed.

“I liked it,” said Raybon, referring to the mesh device. “I felt like it was a good system at that time, and I thought it was appropriate for Mrs. Cisson.”

The urogynecologist from Georgia said he felt confident in the mesh product based on the information he had at the time. He had consulted with Bard on the Avaulta brand for several years, and gained notoriety as the first surgeon to implant an Avaulta product in a patient in the United States.

Concern Grows over Complications

It was only after patients began showing up with complications requiring multiple surgeries to remove the mesh that Raybon discovered the company that manufactured the resin used to make the mesh told Bard it was not to be permanently implanted in the human body.

“How could (Bard) use it with that (warning)?” he asked, when pressed by Cisson’s attorneys. “That’s the part that really concerns me about this. I was astounded when I saw (the warning).”

Under cross-examination, lead defense attorney Lori Cohen pressed Raybon on his failure to contact Bard to ask about the warning, which was disclosed on a Chevron Phillips Material Safety Data Sheet (MSDS) for the resin, once he found out about it.

The jury of four men and four women listened intently as Raybon became visibly agitated and raised his voice while explaining why Bard’s lack of disclosure of the MSDS sheet caused him great concern.

“As someone who spent four or five years at Bard teaching other physicians (about Bard products), and there‘s this MSDS sheet around,” he said. “I’m really concerned I’ve put something in these patients that shouldn’t have been put in. I’m sorry … it was a little irritating to work with someone four or five years, and they didn’t tell me.”

‘Transvaginal Mesh is a Bad Idea’

Late in the afternoon, Dr. Lennox Hoyte, whose response to a question from an attorney caused the first trial to end in a mistrial, returned to the witness stand. Hoyte is a professor of urogynecology and pelvic reconstructive surgery at the University of South Florida, and the chief of urogynecology and robotic surgery at Tampa General Hospital

After being recognized by the court as an expert witness in female pelvic medicine and reconstructive surgery, Hoyte demonstrated how prolapse affects women, using a 3-D model of a woman’s pelvis and a sock.

Hoyte said 50 to 60 percent of women who deliver a baby vaginally will develop some sort of pelvic organ prolapse over time. He also said that he’s performed more than 400 mesh repair operations since 2009, and about 100 of those involved Bard’s Avaulta line.

The net-like device at the heart of the lawsuit includes small mesh “arms” that extend from the device to help hold it in place. Hoyte said he believes the arms are the problem.

“It’s dangerous to go after the arms (during revision surgery) because of the location,” he said.

The mesh implant allows fatty tissue, nerves, blood vessels and muscles to grow through and around it, and Hoyte said it’s not easy to remove. Hematomas (collections of blood) can form, and the vaginal flesh becomes ingrown so tightly around the mesh that surgical removal can destroy so much tissue that the vagina can be difficult to reconstruct.

“Armed transvaginal mesh is a bad idea,” he said. “It never made sense to me. … I always had a feeling the mesh would shrink and cause pain to patients.”

Testimony continues today, with defense attorneys cross-examining Hoyte on Day 3 of what is scheduled to be a 12-day trial.

Doug Allen is a freelance reporter based in Aspen, Colo. His work has appeared in local and national print and radio outlets, including The Washington Post and Aspen Public Radio.

Last modified: July 31, 2013  Drugwatch.com

Exposing device/physician financial relationships!

For doctors and med firms, a new eraof disclosure

•                Article by: JIM SPENCER , Star Tribune Updated: July 28, 2013 - 11:53 AM

FiDA highlight added

New federal law will expose ties to medical device, drug companies.

WASHINGTON – The nation’s medical device makers and drug companies will begin collecting this week what is expected to become a massive stockpile of data on their financial relationships with doctors, researchers and teaching hospitals.

A new federal disclosure law mandates that an array of pharmaceutical and medical manufacturers report payments to physicians, hospitals and other health care businesses that are more than $100 a year. Payments can include travel expenses, entertainment, consulting fees and research support.

The new rules emerged after six years of legislative and regulatory battles to address growing concerns that health companies were gaining inappropriate influence over research, education and clinical decisions. The provisions were eventually folded into the Affordable Care Act in 2010.

“Patients should have the right to know if their physician is getting paid by a certain drug company or has a financial interest in something that they are prescribing,” said Sen. Amy Klobuchar, D-Minn., who co-sponsored the 2007 bill to require disclosures.

Executives within Minnesota’s multibillion-dollar medical technology sector, as well as other health-related companies, say they hope the data will dispel worries that their financial ties with doctors and researchers lead to unethical behavior or unsafe patient outcomes.

“We need to restore public confidence in why a company like [ours] would be interacting with doctors,” said Tom Schumacher, vice president of ethics and compliance at Medtronic Inc.

Those ties lead to innovation and better care, said Chris White, the general counsel for the Advanced Medical Technology Association (AdvaMed). “The public needs to understand the value of these relationships,” he said.

A recent case that highlighted worries over doctor payments involved Fridley-based Medtronic, one of the world’s largest device makers.

The U.S. Senate Finance Committee alleged in October that Medtronic heavily influenced the content of medical-journal reports about its spinal fusion product, Infuse. The committee questioned whether doctors who supervised the studies understated Infuse’s risk and overstated its benefits while receiving $210 million in royalties and consulting fees from Medtronic over a 15-year period.

Medtronic has denied that it improperly influenced peer-reviewed reports or sought to minimize potential harm.

Sen. Chuck Grassley, an Iowa Republican who was the principal sponsor of the original bill, said Americans need a way to assess whether there’s an unethical relationship between a doctor advocating a product and the company that makes it.

“[Infuse] is an example of what this is aimed at, but it isn’t just aimed at Medtronic,” said Grassley, adding that his staff has found many other instances.

Dr. Eugene Carragee, a Stanford University surgeon and editor of the Spine Journal, was among those who revealed the links between Medtronic and the Infuse scholarship. “If your main mission is taking care of patients, you have an obligation not to be so financially vested in the outcome of the ­equipment you’re using,” ­Carragee said.

The new law doesn’t outlaw payments or business deals between companies and doctors or teaching hospitals, but it makes those transactions easily accessible to all Americans.

Starting Thursday, drug and medical companies must track transactions with doctors, teaching hospitals and some other health-related businesses. The first round of data must be submitted to federal regulators by the end of the year and will be made public by next September.

The new law comes with fines of up to $1.15 million for companies that fail to disclose. It also requires senior managers to sign off on the data, making them personally accountable to the Centers for Medicare & Medicaid Services, the agency compiling the information.

The federal disclosure law is much broader than a Minnesota one that since 1993 has banned certain gifts and required drug companies to reveal certain payments to doctors. The federal rules require disclosure of various forms of compensation to doctors or their immediate family members, including consulting fees, speaking fees, gifts, charitable contributions, royalty or license fees, stock options or other investment incentives. This includes payments of more than $10 or payments under $10 that together top $100 in a year.

“Virtually every interaction with a covered recipient has to be kept and analyzed,” said AdvaMed’s White.

Medtronic has spent more than a year and an estimated $10 million preparing to track interactions with an estimated 60,000 physicians.

Medtronic had to integrate and make adjustments to computer systems to make sure they capture information consistently. In particular, it meant identifying doctors who might have done business with different departments or company locations.

Schumacher said some doctors have told the firm they are uncomfortable with the change, saying “it’s not worth the stigma of having their income posted on a website.”

A greater concern may be that doctors don’t realize those dealings with will now be tracked.

The American Medical Association has a website devoted to the change and the AMA president posted tips in a blog.

Schumacher believes that may not have been enough. “I’m not sure the physician community knows this is coming,” he said.

At Advanced Circulatory, a 25-person company in Roseville, CEO Mike Black had to create a system for gathering payments and other valuable transfers to doctors or their immediate families. That includes more than software: It means making sure salespeople get information they never had to gather before.

Black estimates that the adjustments will cost his firm $20,000 a year to implement.

He already has heard from doctors who don’t want to participate in his company’s symposiums because they are afraid the free lunch might land them in a government database. Black worries that the new law will cause doctors “to shy away from perfectly legitimate educational opportunities” about his products, which are used to increase blood circulation.

Black has his doubts that many Americans will make use of this new trove of information. “I don’t believe the average consumer is going to take the time to go look at a database for a particular device or a

particular company,” he said.

Grassley counters that even if individuals don’t, the media will. Concern about negative publicity will discourage doctors from giving biased information, the senator said.

Doctors may not like it, Carragee acknowledged, but the law should help ensure that “research done with industry financing will have to be vetted.”

That’s “how science is supposed to work,” Carragee added.

Jim Spencer • 202-383-6123

gemie1

Jul. 28, 13

12:27 PM

Excellent! The patient has a right to know the relationship between a doctor and the manufactures of drugs and medical devices. A patient or a consumer has the right to know that their doctor does not have a conflict of interest when prescribing medical care.

3

0

explanthis

Aug. 1, 13

1:05 PM

The legislation is commendable if data is accurately compiled and shared with patients. The resistance to transparency is understandable, given the easy access that pharma and medical device industry operatives had to doctors for so many years. The conflicted doctors that miss this cozy relationship are not the doctors I wish to support with my trust and tax dollars. Thank you, Jim Spencer and StarTribune for reporting on this important story.