Artificial Joint Makers Paid More Than $200 Million to Doctors, Hospitals This Year

Artificial Joint Makers Paid More Than $200 Million to Doctors, Hospitals
This Year
MINNEAPOLIS, Minnesota
Tuesday, November 2, 2007 00:33 EDT


The hips and knees are synthetic, but it's real money changing hands. Five
makers of artificial joints have paid more than $200 million this year to
doctors and hospitals, often the same ones who are deciding which company's
joints to buy, according to a calculation of disclosures required this week
by a settlement with federal prosecutors.

The five companies were scrutinized by the U.S. attorney's office in New
Jersey over allegations they gave money and trips to surgeons who used their
products. Four of them - Biomet Inc., DePuy Orthopaedics Inc., Smith &
Nephew Inc. and Zimmer Holdings Inc. - had their charges dropped when they
paid a total of $310 million in fines and agreed to monitoring in a
settlement announced in September. The fifth company, Stryker Corp., was
never charged and paid no fines but agreed to disclose its payments.

The payments to doctors and hospitals ranged from a few dollars to
individual doctors to about $3.9 million to Mayo Clinic. And the
calculation is conservative, because the companies were required to disclose
payments within a $25,000 range, and the low end in the calculation was
used.

The money includes items like royalties for inventions and payments for
teaching classes. Prosecutors alleged that from at least 2002 through 2006,
the companies paid exorbitant amounts for doctors to be consultants and to
use their products exclusively.

They did not allege that all the money was illegitimate.

"Certainly it was not a majority of doctors who had contracts that were
operating illegally," said Mike Drewniak, a spokesman for the U.S.
attorney's office in New Jersey. Drewniak said the investigation into the
five companies in the settlement has wrapped up, but that prosecutors are
still looking into payments by smaller medical device companies.

The settlement required the companies to disclose who it paid during 2007,
and to update the information quarterly. Later this year, it will also
require them to disclose non-monetary payments, such as trips.

Mayo took in money from all the companies except Biomet, including almost
$2.1 million from DePuy, which is a unit of Johnson & Johnson. Mayo
spokesman Lee Aase said nearly all of the money it received was for
royalties, as well as sponsored research. Doctors who invent medical devices
get paid some of the royalty money through the clinic, he said.

"By lumping all this stuff together, you have some places like Mayo look
like one of the bigger recipients of this, but it's because they're
inventing things," Aase said.

Zimmer Holdings, the biggest maker of artificial hips and knees, paid the
most to doctors - $85.8 million, according to the disclosure made on its Web
site on Wednesday. DePuy paid $48.8 million, Stryker paid $27.8 million,
Biomet paid $19.6 million, and Smith & Nephew paid $19.3 million.

DePuy said in a statement that it had begun to change its interactions with
doctors before the Justice Department investigation was announced. It said
that the payments are "critical to advancing patient care and keeping the
orthopaedic community appropriately educated and trained on new products and
surgical techniques."

Spokesmen for Zimmer, Stryker, and Smith & Nephew all declined to comment.
Stryker posted its information in a way that made it difficult to sort the
data and declined a request to make it available in a more usable format. A
Biomet spokeswoman did not return a phone message seeking comment.

Cincinnati orthopedist Dr. Edward Lim has written about the relationship
between doctors and the implant industry. He also was listed as receiving
$14,794 from Zimmer.

He said the money was for teaching classes that demonstrate joint
replacements, such as a new shoulder he put into a cadaver last week.

"By and large I think the industry is fairly up front in terms of, you
provide a service and you expect to get paid for a service," he said. "What
you're not expected to do is, say, get a kickback for doing a certain number
of joints."

"I'm paid for my time and my expertise. I'm not paid for being their
mouthpiece," he said.

The settlements with the companies include a limit of $500 per hour for
consulting services. Companies that want to pay more must get a third-party
evaluation of a fair price for the consulting.

Rosamond Rhodes, who is director of bioethics at Mount Sinai School of
Medicine in New York, said the relationship between doctors and companies is
more necessary with medical devices than in other areas, such as
pharmaceuticals. Doctors need to learn how to implant an artificial joint,
and that probably needs to happen at an event the company paid for, she
said.

But even though those relationships may be necessary, she also believes they
influence doctors to buy the product made by the company paying the bills.

"The amazing thing is each doctor who is involved believes with a totally
pure heart that they are immune. So the influence is silent," she said. "But
we know that it affects their judgment."