Buy! Buy! Medical Device Indu$try Consolidate$/Invert$: Follow the Money

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Sunshine on medical-device makers: Five give $56.7million

By John N. Frank   

Posted: October 2, 2014 - 1:45 pm ET

Device maker payments to providers

Aug. 1, 2013-Dec. 31, 2013

Device maker	Payment
Zimmer*	$17,428,680.83
Medtronic*	$13,024,707.80
Boston Scientific Corp.*	$8,882,851.72
Stryker Corp.	$8,742,778.75
Intuitive Surgical	$8,638,153.40

Created with Datawrapper

Source: Modern Healthcare analysis of CMS’ Open Payments website Get the data

Five prominent medical-device makers gave a total of $56.7 million to doctors and teaching hospitals from Aug. 1-Dec. 31, 2013, for research and general purposes, according to a Modern Healthcare analysis of data posted on the new Open Payments website.

Leading the list of devicemakers is Warsaw, Ind.-based Zimmer, which gave $17.4 million, followed by Minneapolis-based Medtronic, which gave $13 million. Medtronic competitor Boston Scientific gave $8.8 million.

Competition among devicemakers has been intense, and the companies have been pursuing mergers and acquisitions and new contract models with providers, which view high-cost supplies as an area to cut costs. Zimmer, which makes orthopedic reconstructive, spinal and trauma devices, dental implants and related surgical products, is pursuing a $13.35 billion acquisition of competing orthopedic manufacturer Biomet. Medtronic announced plans to buy surgical supplier Covidien for $42.9 billion as the sector continues to consolidate.

The data were published on the Open Payments website, which was required by the Physician Payments Sunshine Act, a provision of the Patient Protection and Affordable Care.

*Zimmer recently purchased Biomet:  the only manufacturer that provided patients a warranty on product. 

*Medtronics will  avoid paying U.S. taxes, as it employed ‘inversion’ to acquire a foreign company and claim that as its corporate headquarters. 

*see FiDA post on Salazar v Boston Scientific Obtryx surgical mesh 73M verdict:  the company executives were aware of the irreversible, permanent, catastrophic harm and the MSDS stating that pp mesh product should not be implanted in humans and did not inform the implanting surgeons and patients.

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Government reveals $3.5 billion in industry ties todoctors, hospitals

September 30, 2014  LA Times

By CHAD TERHUNE, NOAM N. LEVEY

Opening the book on long-hidden industry relationships, the federal government revealed nearly $3.5 billion worth of payments and other ties that U.S. doctors and teaching hospitals have with drug and medical-device companies.

These financial details, published Tuesday under a requirement in the federal health law, have been sought for years by patient advocates and lawmakers from both political parties concerned about conflicts of interest in the medical profession.

Initially, the new federal website includes 4.4 million payments made during the last five months of 2013. More data will be published next summer.

Database

Officials said the data cover financial transactions involving about 546,000 physicians and 1,360 teaching hospitals across the country.

Consumer advocates hope the increased disclosure will ultimately help curb unethical practices by some doctors who prescribe medications and devices after receiving large sums from manufacturers, possibly putting patient care at risk.

Physicians and academic medical centers defend industry collaboration as essential to advance research into life-saving treatments. They have also questioned the accuracy of the government data.

The Physician Payments Sunshine Act was included in the Affordable Care Act that President Obama signed in 2010 amid growing demands for more openness in the U.S. healthcare system, which historically has shielded doctors, hospitals and other medical providers from much public scrutiny.

“The Sunshine Act is a watershed moment,” said Susan Chimonas, associate director of research at Columbia University's Center on Medicine as a Profession. “It’s a tantalizing first look at what kind of industry ties doctors have.”

In the last several years, the Obama administration has published data on how much hospitals charge for medical procedures and how much the massive federal Medicare program pays individual physicians.

At the same time, hospitals, nursing homes and others are being required to report an increasing number of quality measures to the federal government, which posts the data on a public website.

These industry payments have long been a target for patient advocates concerned about the huge sums companies expend to woo physicians with speaking fees, luxury trips and meals.

“It’s a widespread practice that does influence the kind of care patients get,” said Lisa McGiffert, manager of Consumers Union’s Safe Patient Project in San Francisco. “This exposure will require everybody to talk about something that’s been underground.”

In one national survey, nearly 30% of doctors said they received money for consulting, giving lectures or enrolling patients in clinical trials.

Medical groups have cautioned that the data on payments risk jeopardizing crucial collaborations that have helped foster medical breakthroughs that benefit patients.

“If the information made available to the public involves dollar amounts without full context, it can lead to gotcha-style news stories and healthcare providers facing the presumption of ethical wrongdoing even when they have done nothing wrong and their work is benefiting patients,” said Mary Grealy, president of the Healthcare Leadership Council, an association of medical industry leaders.

Major medical societies, including the American Medical Assn., have expressed concerns about the increased disclosures about physicians, often complaining that the data are not always correct.

In advance of the release of the new payment data, medical groups renewed their complaints that physicians had not been given adequate opportunity to review the information before it was published.

Dr. Shantanu Agrawal, a deputy administrator at the Centers for Medicare & Medicaid Services, said the new database "does not identify which financial relationships are beneficial and which could cause conflicts of interest. It simply makes the data available to the public."

The government website details a wide range of payments and financial information, from consulting fees, meals and travel expenses to physician ownership stakes in medical companies.

But the Obama administration said about 40% of the records published Tuesday don't include physician names because officials are still working to confirm the accuracy of the payouts. An additional 199,000 records are being withheld for now because they are either exempt from the reporting requirement or under dispute, federal officials said.

The law requires medical companies to report payments and gifts to physicians that exceed $10.

U.S. Sen. Charles E. Grassley (R-Iowa) authored the Sunshine Act after numerous investigations into conflicts of interest among physicians. He said the rollout may be rocky but the data will eventually become a valuable resource for consumers, insurers and taxpayers.

"It should empower consumers to learn whether their doctors take payments and if so, why and whether that matters to them," Grassley said.

Twitter: @chadterhune @noamlevey

HealthwatchUSA conference focuses on device implants.

 Video/slides of HealthwatchUSA 2013 presentations

Business

Annual HealthwatchUSA conference comes to Lexington, KY

Published: October 31, 2013 

By Jim Warren — jwarren@herald-leader.com   FiDA highlight

A health conference Friday in Lexington will explore various patient safety issues, including the potential risks of joint replacement implants.

"Many people in their 40s and 50s are having these devices put in today, expecting them to last 30 or 40 years. But anything mechanical eventually fails," said Dr. Kevin Kavanagh, the conference coordinator.

The meeting also will focus on the new federal Sunshine Act, which requires public disclosure of payments to doctors by pharmaceutical companies and manufacturers of medical devices.

Kavanagh said that medical devices like artificial joint implants offer advantages, but they can pose risks to patients. "They are largely unregulated, and many of them have had inadequate testing," he said.

Implants don't come with a guarantee, he said.

"You buy a toaster, you get a guarantee," Kavanagh said. "But you get a complex hip implant that may cost tens of thousands of dollars, and it comes with no guarantee. Without that, it's very hard to find out how long these devices are even supposed to last."

The Consumers Union contends that implant manufacturers should be required to guarantee their products.

Joleen Chambers, founder of the Failed Implant Device Alliance, is a keynote speaker at Friday's conference.

Jim Warren (859) 231-3255.

Sunshine Act exemption is a missed opportunity to fund/include patients at medical conferences.

Doctors Face New Scrutiny Over Gifts

New Health Law Calls for Increased Disclosures

            By PETER LOFTUS CONNECT  Wall Street Journal

FiDA highlight added

U.S. doctors are bracing for increased public scrutiny of the payments and gifts they receive from pharmaceutical and medical-device companies as a result of the new health law.

Starting this month, companies must record nearly every transaction with doctors—from sales reps bearing pizza to compensation for expert advice on research—to comply with the so-called Sunshine Act provision of the U.S. health-care overhaul. The companies must report data on individual doctors and how much they received to a federal health agency, which will post it on a searchable, public website beginning September 2014.

Many doctors say the increased disclosures are making them rethink their relationships with industry, citing concerns about privacy and accuracy, and worry that the public will misinterpret the information. Some fear patients will view the payments as tainting their medical decisions, and will lump together compensation for research-related services with payments of a more promotional nature.

Drug companies collectively pay hundreds of millions of dollars in fees and gifts to doctors every year. In 2012, Pfizer Inc., PFE +0.64% the biggest drug maker by sales, paid $173.2 million to U.S. health-care professionals. Some companies including Pfizer have decreased these payments in recent years; Pfizer's total was $195.4 million for 2011.

Consulting and speaking fees are an important source of income for some physicians, who can be paid tens of thousands of dollars a year for such services. But now physicians say they will be much more selective about the work they do and what they will accept from industry representatives. Some are even restricting access to their offices by sales reps, or requiring forms that document the value of anything brought to the office, according to medical societies.

John Mandrola, a cardiologist in Louisville, Ky., said he has been paid a total of $1,500 to $2,000 this year by medical-device makers for speaking engagements. Knowing that such transactions will become public has caused him to be more cautious about what fees to accept, he said. He avoids industry reps visiting his office, believing he can get information on new drugs elsewhere.

"I'll continue to weigh the benefits and the negatives, and I think the Sunshine Act and the public reporting of all this stuff makes us think about that," said Dr. Mandrola. "And I think that's a good thing."

A benefit of transparency, Dr. Mandrola said, is that it will help doctors evaluate medical research from peers if they know whether the researchers receive payments from certain companies. Still, he worries that the disclosures could squelch legitimate interactions—for example, when doctors receive consulting fees to help companies develop drugs and determine their best use.

"I don't think all physician-industry interaction is bad," he said.

The push for greater transparency was driven by concerns that doctors' prescribing decisions are tainted by the payments and gifts, as well as allegations that drug companies have used payments to induce doctors to prescribe drugs for unapproved, "off-label" uses. Several drug companies have paid large penalties to settle government allegations of off-label marketing, and were required to disclose physician-payment data as conditions of the settlements.

"The idea is that transparency will encourage doctors to evaluate whether these are appropriate relationships with companies or not," said Daniel Carlat, a psychiatrist and director of the prescription project at the Pew Charitable Trusts, which supported the Sunshine Act. He expects patients won't have much of a problem if their doctors receive $200 worth of company-provided lunches, but may question doctors who receive tens or hundreds of thousands of dollars from the industry annually.

Several drug and device makers—including Pfizer and Eli Lilly LLY +0.30% & Co.—have been posting physician-payment data online for the past few years. Some U.S. states already require companies to report such information. But the Sunshine Act will significantly widen the scope because it applies to most companies—any company whose products are covered by Medicare—and the government's launch of the database could draw greater public attention.

Richard B. Aguilar, a diabetes-care specialist, received a total of $42,339 from Lilly for the first three months of 2013, according to Lilly's online payment database. Dr. Aguilar, who has a private practice in Downey, Calif., said he speaks about Lilly drugs at programs to teach other doctors, and the information is consistent with the FDA-approved prescribing labels. He says the payments are fair compensation for his expertise and travel.

Dr. Aguilar plans to continue serving as a paid speaker, but he says other doctors are increasingly opting out of attending or speaking at such programs for fear of what the public will think about the payment disclosures.

Dr. Aguilar said he hopes the public would see the value of physicians learning new information about drugs from an expert at speaker programs, rather than having to rely upon their own educational resources to keep current. "This, in essence, is reducing the number of valuable expert educational speakers who might otherwise have provided teaching and experience to many health-care providers," he said.

Some doctors fear the payment data will be inaccurate and could mislead the public about the nature of their relationships with the industry. Gary M. Cowan, an ophthalmologist in Fort Worth, Texas, said he has occasionally attended company-sponsored dinners to hear a lecture from an expert in his field. He plans to monitor the payments that companies report in his name.

"I think it behooves every physician to look and see what's said about him," he said.

Drug makers said they've been preparing for the new reporting requirements and have implemented technology systems to collect the data, but they will continue to work with physicians because the interactions improve science and medicine.

The Centers for Medicare & Medicaid Services, which is implementing the Sunshine Act, is advising doctors to keep records of all payments and transfers of value received from industry. Once the agency receives payment data from manufacturers, it will give doctors about two months to review the data and work with companies to make any corrections before it is made public.

CMS also will break down the payment data into more than a dozen categories—such as meals, travel, research or speaking fees—to give a clearer idea of the nature of a doctor's relationship with industry.

One key exemption: Companies won't have to report compensation to doctors who speak at certain accredited events where physicians receive continuing medical education—as long the sponsoring company doesn't select or directly pay the speaker, but rather delegates those duties to a third-party organization. CMS initially proposed to require that such payments be reported, but granted the exemption in its final rule issued earlier this year, saying industry support for accredited or certified continuing medical education is a "unique relationship." Continuing-medical education providers pushed for the exemption, arguing that industry support would dwindle if the payments had to be reported.

Stefanie A. Doebler, an attorney with Covington & Burling LLP who represents health-care companies, said the exemption for indirect payments to speakers at continuing-medical education events could help sustain industry support for such programs. However, companies will be required to report certain other expenses for these programs, such as meals provided to physician attendees if the cost of each meal is separately identifiable. Some companies have decided not to fund such meals, she said, which could cause program providers to charge attendees for the meals.

To ensure accuracy, CMS is required to conduct audits of the data submitted and levy civil monetary penalties against companies for failing to submit data, or for submitting inaccurate data. Companies that fail to report information in a timely, accurate or complete manner face penalties of at least $1,000 per transaction, with a total maximum annual penalty of up to $1.15 million per company, according to CMS.

CMS plans to publish the data each year on a public website starting in the fall of 2014. CMS says patients will be able to look up their doctors and see if they have any financial relationships with companies, which types of payments they receive and how much.

Some companies are taking steps to prepare the doctors with whom they do business. Later this year, Roche AG's RHHBY -0.06% Genentech unit, which sells the cancer drug Avastin, will launch an online portal called "Sunshine Track," which will allow doctors to review payment data before it is reported to CMS. "We have implemented extensive processes to validate all payment information we collect," said a spokeswoman.

Genentech also allows physicians to opt out of receiving meals from the company at speaker programs or during office visits by sales reps. Doctors opting out of meals at speaker programs must certify this on a sign-in sheet and can either pay for the meal themselves or not partake, the spokeswoman said.

Write to Peter Loftus at peter.loftus@dowjones.com

Joleen Chambers comment:

More empty talk about being patient-centered:  with the exemption allowing industry to support medical education through a third party, the legislation FAILS to include a % of the funding to go to consumer organization scholarships making participation in the conferences possible.  Treatment decision makers and healthcare system designers are notorious for ignoring the patient stakeholder!   Engaged patient advocates are otherwise unfunded and pay a big price to compete for conference slots competing with those with professional credentials and a sponsoring organization.