Medical device makers influence surgeons with billions in payments

The relationship between spine and joint surgeons and medical device manufacturers is coming under increased scrutiny as the former has received billions in payments from the latter in recent years.

Medical device makers have paid $ 3.1 billion to orthopedic and neurosurgeons from 2013 to 2019, based on data from the federal government website OpenPayments, according to Kaiser Health News.

Under federal law, it is illegal for physicians to take anything of value from a medical device manufacturer in exchange for using its products. Yet, it is legal for physicians to receive speaking and consulting fees from such companies. They may also receive royalties in exchange for assisting in the design of medical devices.

Critics contend the in-practice kickbacks are often camouflaged as consulting and other fees. They claim this can lead to physicians using inferior products and conducting unnecessary surgeries that harm the patient.

“It is simply so much money that it is staggering,” Dr. Eugene Carragee, a professor of orthopedic surgery at Stanford University Medical Center, told KHN.

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However, Scott Whitaker defended the practice.

“Doctors help develop and refine medical devices, and they even create new devices themselves, sharing their intellectual property with companies to help save and improve patients’ lives,” Whitaker, president and CEO of AdvaMed, the medical device industry’s trade group, told KHN.

Indeed, the interaction between physicians and device makers is crucial for producing better medical technology.

But accusations that some spine and joint surgeons have taken illegal kickbacks from medical device makers have resulted in over 100 federal fraud and whistleblower actions over the last decade. The targets of these legal actions have not only been surgeons but also big companies such as Johnson & Johnson and Medtronic. In some cases, companies have paid millions in fines without admitting to any wrongdoing.

Spine and joint surgeries are a $ 20 billion-a-year industry. The equipment a hospital uses for joint and spine surgery can be heavily influenced by its surgeons, so it is no mystery why manufacturers pursue them. Orthopedic and neurosurgeons make up about 5% of physicians but receive nearly 25% of medical device industry payments.

Most of these surgeons receive very little from the industry. About eight in 10 received less than $ 5,000 in 2019. But a relatively small number of them account for about two-thirds of the physicians who received at least $ 1 million from the device and drug industry.

Dr. Charles Rose, co-founder of the Association for Medical Ethics, told KHN he thinks a small number of those receiving large amounts of money have enough influence to “help direct medical care.”

Patients can be the ultimate victims in a kickback scheme.

In one case, three plaintiffs filed a lawsuit against Arthrex, saying they had to undergo knee surgery to replace defective devices from the company. The Arthrex devices were all installed by a Pennsylvania orthopedic surgeon, Dr. Thomas Meade. The suit alleged Arthrex paid Meade $ 250,000 for consulting and other work, and Meade misled the patients about the safety of the knee devices.

Arthrex admitted to paying Meade and settled the cases out of court in 2020.

In 2020, the Department of Justice filed a complaint in two whistleblower suits against medical device maker Spine Frontier, Inc. The complaint alleged Spine Frontier and its owner, Dr. Kinsley Chin, funneled over $ 8 million in kickbacks to 35 spine surgeons. One of those surgeons has pleaded guilty to criminal charges, while another six have admitted to wrongdoing and paid settlement fines totaling $ 3.3 million.