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Zimmer Blinks First on Physician Payments

By | April 21, 2008
Source; bnet.com

Is the ethical backlash against drug and medical-device company payments to doctors finally changing behavior in the industry’s executive suites?

Zimmer Holdings logoThat’s certainly the impression you’d get from the announcement last week by Zimmer Holdings, a major manufacturer of hip, knee and spinal implants that declared it was adopting “an enhanced standard for ethical business practices” that will “aggressively reduce potential or perceived conflicts of interest” inherent in paying doctors as consultants.

Once you get past the corporate-speak, the details are actually pretty interesting. Zimmer has banned all gift-giving to all healthcare professionals, ended the practice of sponsoring doctor presentations at medical conferences, and is “moving toward” eliminating quotations and endorsements of its products by doctors except for references from scientific papers. The company also says it has “suspended” consultant payments during a review intended to bring that program in line with an internal “corporate compliance program.”

Zimmer, however, doesn’t exactly deserve a gold star for good corporate citizenship. The company was one of five device makers accused by federal prosecutors of paying kickbacks to doctors who used its artificial knee and hip replacements. Last September, Zimmer and three other companies paid a total of $311 million in fines and agreed to federal monitoring of reform efforts in order to avoid prosecution. (Zimmer’s share was $169.5 million, just over twice the next-largest fine. A fifth company, Stryker Orthopedics, cooperated with the probe and avoided a fine, although it’s also making internal changes.)

That said, it’s a welcome first step, although given how prevalent these unsavory practices seem to have been — at least according to the U.S. Attorney’s office in New Jersey — I can’t help wondering just how thorough or lasting these changes are likely to be. (Short answer: At least 18 months, since that’s how long the feds will be looking over their shoulders.)

The orthopedic-implant industry’s newfound commitment to ethical business practices also parallels a similar effort in the drug industry. There, many companies are now offering to voluntarily disclose their own payments to doctors in apparent hopes of warding off new regulations that will force them to do so.