New Jersey Goes After Rampant Conflicts of Interest in Medical Device Industry

Evelyn Pringle May 11, 2009

On May 5, 2009, New Jersey Attorney General, Anne Milgram, announced that the State had entered into a settlement agreement with medical device maker Synthes, Inc to resolve allegations that Synthes failed to disclose financial conflicts-of-interest among doctors who conducted clinical testing on its products.

In announcing the settlement, Milgram said it is vital that the medical device industry change the way it approaches clinical testing. "We cannot allow financial conflicts-of-interest to infect the clinical trial process. It is a betrayal of the public trust, and has the potential to jeopardize patient well-being," she said in a press release.

The same day, Milgram's office also issued subpoenas to five major medical device makers seeking information about their business practices.

"Medical device makers have a duty to make certain that clinical trial results are accurate and unbiased," she said. "In creating these financial incentives for doctors, Synthes and the rest of the industry have done the exact opposite."

"Going forward," she warned, "if the industry will not address this problem voluntarily, we most certainly will.”

Milgram said the apparently common industry practice of clinical trial investigators being paid by – or holding considerable stock in -- companies whose products they are testing is wrong, and leaves the trial process lacking in integrity.

"It is outrageous that doctors who are testing and, in many cases, recommending the use of certain high-risk medical devices are being compensated with stock in the very companies that make the devices," she said. "All patients – but especially those considering high-risk devices such as spinal disc replacements -- deserve honest, objective clinical trial information about the products available."

"As things stand,” Milgram added, “the public often has no knowledge that a 'clinically tested and recommended' medical device was evaluated and endorsed by people with a financial stake in seeing it sell. This is simply wrong and it must stop."

In a May 5, 2009 letter to the FDA, Milgram described the problem of undisclosed conflicts-of-interest among clinical investigators as "rampant," and called on the FDA to adopt rules that require full public disclosure.

New Jersey's investigation of Synthes centered on allegations that most doctors conducting trials for the ProDisc Total Disc Replacement System, ProDisc-L and ProDisc-C had a financial stake in the outcome.

The FDA approved Synthes’ applications for pre-market approval of ProDisc, even though the financial conflict disclosures were clearly inadequate, Milgram reports.
In the letter to the FDA, she pointed out that a number of the company's disclosure forms in submissions were signed and dated, but otherwise were left blank. Others indicated that investigators had significant equity interests in a product they were testing, but offered no details.

Synthes’ failure to adequately disclose "should have been obvious from even a cursory review of its FDA submissions," Milgram wrote, yet the FDA "did nothing to regulate these conflicts" and approved Synthes applications for pre-market approval without delay or further inquiry.

The "investigation revealed that a majority of the physicians who participated in these clinical trials had significant investments in the products – investments that would have been worthless had the product failed to obtain regulatory approval from the FDA," she noted.

A copy of the letter sent to the FDA was forward to Senator Max Baucus, Chairman of the US Senate Finance Committee, and Senator Charles Grassley, ranking member of that committee.

Under the terms of the settlement Synthes has agreed to:

Prohibit compensation of clinical investigators tied to the outcome of the clinical trial

Pay clinical investigators “fair market value compensation” for their clinical trial work, as well any other consulting services they provide to the company

Collect information on financial interests from clinical investigators

Create a Financial Interest Information Database that will record all relevant financial interests related to clinical investigators

Disclose all financial interests of all clinical investigators on the company’s Web site

Provide complete disclosure of financial interests to the FDA and conduct reasonable due diligence to insure that the disclosures are complete and accurate

Disclose all financial interests directly to health care facilities serving as clinical trial sites

Provide Financial Interest and Disclosure training to employees.

In addition, Synthes will pay the state $236,000 as reimbursement to cover the fees and costs related to the investigation.