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Five US manufacturers of hip and knee replacements have settled with the federal government after being accused of paying orthopaedic surgeons to use their products. Four of the companies will pay $311m (£150m; €212m) in fines to the federal government.
The companies have admitted paying many orthopaedic surgeons “consulting fees” to use their devices.
The settlement was announced on 27 September by Christopher Christie, US Department of Justice attorney for northern New Jersey. When the Department of Justice was asked whether any action would be taken against the surgeons who accepted the payments, a spokesman would say only that the investigation was ongoing.
Criminal complaints were filed against four of the companies, charging them with conspiring to violate federal laws against kickbacks (unlawful payments by companies to individuals to use the companies' products). The four companies are Zimmer, DePuy Orthopaedics, Biomet, and Smith & Nephew. A fifth company, Stryker Orthopedics, cooperated with the US attorney's office and will not pay a fine.
The amount of the fines reflects the companies' market share, the justice department said. Zimmer will pay $170m, DePuy $85m, Smith & Nephew $29m, and Biomet $27m.
The four companies were accused in the criminal complaint of “using consulting agreements with orthopaedic surgeons as inducements to use a particular company's artificial hip and knee reconstruction and replacement products.”
The complaint said, “The investigation revealed that this was a common practice by the companies from at least 2002 through 2006.”
Surgeons who had agreements were paid “tens to hundreds of thousands of dollars per year for consulting contracts and were often lavished with trips and other expensive perquisites,” the justice department's press release says.
It also says that the five companies account for nearly 95% of the US market in hip and knee replacement devices.
As part of the settlement the companies agreed to change their practices in dealing with doctors, educate their sales staff, follow rules on compliance, and be monitored by government appointed supervisors for 18 months to avoid further prosecution.
By signing the settlement agreement the companies avoid civil penalties and will not be excluded from the Medicare reimbursement programme, which provides health insurance for elderly people.
About two thirds of hip and knee replacements are given to people aged over 65 years, says the 5 November issue of the “Integrity in Science Watch” newsletter of the Center for Science in the Public Interest, which includes a list of about 50 surgeons who each received more than $1m in payments (www.cspinet.org/integrity/watch/index.html). Medicare records showed that a typical knee replacement costs $33000, the centre said, and that Medicare spent $16bn on hip and knee replacements in 2006.
The justice department's investigation began several years ago and was then reported by national newspapers in the United States.
In response to those articles and the present settlements the American Academy of Orthopedic Surgeons posted information for its members on its website (www.aaos.org). The academy receives funding from manufacturers of joint replacements.
The academy president, James Beatty, told the BMJ the money was used for continuing medical education and companies had no input in its content.
Dr Beatty sent a letter to members in which he said, “AAOS [the academy] supports appropriate financial disclosures to patients regarding relationships between orthopaedic surgeons and implant manufacturers . . . Many of our AAOS colleagues choose to work in partnership with implant manufacturers to provide consulting advice, conduct research, and educate orthopaedic surgeons and the public. A number of AAOS members are engaged in developing new medical devices to better serve patient needs. The appearance of a physician's name on any disclosure filing . . . indicates only that he or she has received compensation from the implant manufacturer.”
Surgeons who violate the academy's professional standards may be censured, suspended, or terminated from membership.
The academy unsuccessfully tried to have information on the web show whether payments to doctors were for royalty payments, consulting agreements, research, or medical education.
Two prominent surgeons issued a statement saying that they did not keep any of the money that they received from manufacturers but instead donated it to charity.
The US Department of Justice's press release and documents related to the settlement are available at www.usdoj.gov/usao/nj/press/index.html.