Evelyn Pringle April 25, 2007
According to Johnson and Johnson's SEC filings, as of December 31, 2006, there were 100 lawsuits pending against the company involving the Charite artificial spinal disc, seeking "substantial compensatory and, where available, punitive damages."
The J&J subsidiary, DePuy Spine, has marketed the Charite since the disc was FDA approved for sale in the US in October 2004, to treat patients who have degenerative disc disease at one level in the spine.
In a nutshell, the lawsuits allege that the Charite is defective, it was improperly marketed, and J&J failed to adequately warn doctors and consumers about the dangers of the disc.
In March 2006, J&J filed a motion for summary judgment in attempt to have 4 lawsuits dismissed in the Superior Court in Bristol, Mass, using a legal defense known as preemption where a device maker cannot be sued if the FDA has approved the device.
Its ironic that J&J would try to use this argument when experts say the fault lies with the FDA for approving the Charite to begin with based on one 2-year noninferiority trial that sought only to show that it worked as well as the Bagby and Kuslich (BAK) cage used in spinal fusions, which had already been abandoned due high failure rates.
And even when compared to the outdated surgery, the disc worked no better in relieving pain and most Charite patients were still taking narcotic pain drugs 2 years later.
On April 11, 2007, Judge Susan Garsh denied J&J's motion and noted that the plaintiffs alleged that DePuy made specific performance claims to obtain FDA approval that the device failed to achieve and "there is evidence to support the device does not perform in the manner which DePuy represented to the FDA that it must perform," she wrote.
According to the lawsuits, Charite patients were provided materials by DePuy that stated: "The Charite Artificial Disc has a clinical history spanning 17 years. Its safety, efficiency and remarkable durability have been proven through thousands of implants worldwide."
DePuy also promoted the disc with the phrase: "Natural Motion is Back."
J&J claims that replacement surgery will alleviate chronic back pain, permit natural movement and improve the patient's ability to function under the premise that segmental mobility of the spine will improve, as has been the case with hip and knee replacement.
J&J's main selling point is that disc replacement is more effective than lumbar spinal fusion surgery, where the damaged disc is removed and the vertebrae are joined together using bone grafts, metal screws and/or cages and motion can no longer occur in that area.
However, critics point out that in many of the surgeries listed as successes, the Charite only worked after the auto-fusing of bones together, similar to spinal fusion surgery, which eliminates the possibility of natural motion that leads patients to chose the costly replacement surgery to begin with.
A long line of studies show the odds for revision surgery in Charite patients are high. Back in 1996, Cinotti, David et al, analyzed the follow-up on 46 patients and eight patients had undergone subsequent fusion surgery. "The main cause of poor outcomes appear to be an inappropriate selection of patients undergoing disc replacement," the authors concluded.
In 1997, Lemaire, Skalli, et al, reported on 105 patients with average follow-up of 51 months and found that fifty patients or 48% had undergone at least one operation.
A 1999 study by Zeegers, Bohnen et al in the Netherlands reported the 2-year results for 50 patients and found 12 patients, or 24%, needed re-operation.
In a more recent study from the University Medicine in Berlin (2005), Putzier, Funk et al evaluated 71 patients who received implants between 1984 and 1989, and of the 53 patients available for examination, 12, or 23%, had undergone surgical fusion.
But there were warnings that the Charite was not all it was cracked up to be even before it was approved. In April 2003, the Spine Journal published the paper, "Total Disc Replacement for Chronic Low Back Pain: Background and a Systematic Review of the Literature," that stated: "There is no evidence that disc replacement reliably, reproducibly, and over longer periods of time fulfils the three primary aims of clinical efficacy, continued motion, and few adjacent segment degenerative problems."
Some experts say the Charite itself is the problem. On October 23, 2006, the Street.com reported that researchers at the University of California at Irvine claim the device maker made a crucial mistake when designing the disc that explains why the replacement surgery has resulted in repeated failures with "catastrophic consequences" for patients.
"They've based their center of rotation on a disc space that is in front of the spinal canal," Dr Charles Rosen, a Cal-Irvine spine surgeon, told the Street.
According to Dr Rosen, the makers overlooked the spine's normal function by creating an "artificial center of rotation" in a space that lies in front of the spinal canal instead of behind it and has compromised the body in the process.
"You have a center of rotation that's normally there, and they falsely impose another," he told the Street. "You can't have two because they will neutralize each other. Something has to give."
"To give," he says, "either the back part of the device breaks or the front part dislocates."
J&J has a lot of money riding on the Charite and if it turns out that Dr Rosen is right, its January 1, 2006, projection the total spine market will bring the company $9 billion by 2010 will go right down the tubes.
Spine surgery is a multi-billion dollar industry. According to the August 5, 2006 LA Times, at least $3.2 billion was spent in the US on spinal fusion in 2005, and Medicare payments to hospitals for implant surgery have risen about 40%, in the past 2 years, from $10 billion to $14 billion, according to the September 26, 2006, New York Times.
However, serious questions are being raised about whether doctors and hospitals are practicing surgery for profit, especially since the revelation that surgeons are investing in companies that make the devices and hardware used during spine surgery.
On December 30, 2006, Reed Abelson reported in the New York Times that over the past couple of years, about 30 start-up companies have begun selling spine devices and hardware and about a dozen have doctors investors.
"Because most of the companies are private and the relationships are not publicly disclosed," he wrote, "there is no way to know how many spine surgeons around the country are partial owners of device makers."
Stan Mendenhall, editor of the newsletter, Orthopedic Network News, told the Times that the spine device market has doubled in the last 3 years and there are now about 100 companies and doctors have ownership in some of the newest firms. And there are apparently plenty of profits to spread around because the report says a single screw sells for around $1,000 or 10 times the cost of making it.
Back on June 28, 2006, the Times revealed another funneling scheme set up by doctors and device makers when it reported that, "doctors in private practice have set up tax-exempt charities into which drug companies and medical device makers are, with little fanfare, pouring donations — money that adds up to millions of dollars a year."
"The tax-exempt money also sometimes flows to the for-profit medical groups affiliated with the charities," the Times wrote, "sometimes covering business expenses or even paying parts of the salaries of doctors."
For example, the Times revealed that the tax-exempt, "Blue Ridge Bone and Joint Research Foundation," headed by Dr Joseph Moskal, an orthopedic surgeon, received $75,000 from DePuy in the year ending July 31, 2004, and then paid $30,000 of that money to the for-profit Roanoke Orthopaedic Center, where Dr Moskal practices, to defray the costs of a fellowship program there.
The Department of Justice made it known that J&J's relationships with doctors are under investigation in June 2006, when it served subpoenas and search warrants on DePuy, demanding copies of consulting contracts, professional services agreements, and documents that evidence the company's arrangements with orthopedic surgeons.
Showing posts with label Charite. Show all posts
Showing posts with label Charite. Show all posts
Sunday, August 8, 2010
Friday, August 6, 2010
Injured Charite Spinal Disc Victims and DOJ go after Johnson & Johnson
Evelyn Pringle October 18, 2006
In less than two years, the FDA has received over 130 reports of serious adverse events related to the Charite disc.
Lumbar spinal fusion is a procedure in which the vertebrae of the spine are fused together so that motion can no longer occur. As an alternative, the Charite disc replacement surgery is supposed to restore spinal flexibility, reduce pain and improve the patient's functional activities.
The disc is manufactured by DePuy Spine, a Johnson and Johnson subsidiary, and was approved for use in the US in October 2004, for patients who have degenerative disc disease at one level in the spine and have been unable to obtain relief from low back pain from other spine treatments for a period of at least 6 months.
When seeking approval by the FDA, J&J provided only one 2-year trial purporting to show that the Charite worked as well as the Bagby and Kuslich (BAK) cage, a product used in spinal fusions surgery, which was abandoned years ago by many surgeons due its high failure rate.
Critics say a 2-year trial is far too short for a device that is expected to remain in the spine indefinitely without becoming displaced or causing other problems. Many experts now predict that over the next decade, there will be a slew of Charite patients who will suffer complications and require surgical removal of the disc, which they say is problematic because the removal procedure can be more dangerous than the original implant surgery.
The procedure for replacement involves an anterior approach for exposure for the spine and Santos et al, states, "Revisions surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures."
Expert also warn that other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can occur.
In the study submitted to the FDA for approval, J&J did not include pain relief as a measure of the disc's success and the product's ability to restore natural motion was also not listed as a definition of success. And apparently for good reason, because the disc does not live up to its promise of relief.
One Charite victim states: "I have retained my range of motion that is evidently so important."
"However," he says, "I am still experiencing the same, if not worse pain than prior to the surgery."
"I have no idea what is wrong with the implant," he notes, "if it has moved, broken or was just part of a bigger undiagnosed problem."
He hesitates to investigate, he says, because his hospital experience was "so horrid."
"So if a surgical remedy is needed to fix whatever is wrong," he states, "I'm not going for it again."
In conclusion, the patient says he would not recommend this procedure to anyone.
The same sentiments are shared by many Charite patients. To date, out of the 5,000 patients implanted with the disc, the Houston, Texas Pulaski and Middleman law firm leads a group of firms that represent over 350 patients who have been injured and allege that the Charite disc is defective and that the company failed to adequately warn patients about the potential risks associated with the disc.
In addition, according the Street.com on June 5, 2006, a Chicago law firm has more than 200 clients who have suffered complications from the disc and are seeking reparations from DePuy.
Dr Charles Rosen, founding director of the University of California-Irvine Spine Center, is an outspoken critic of the Charite disc. On June 5, 2006, he told the Street.com, that after much prodding, he finally got the FDA to send him 67 reports on adverse events involving the Charite disc and that he found the information incomplete and worrisome.
Some "71% of reports were generated by 'company representatives' only, [and] not one report to the FDA concluded any device malfunctioned or was defective - including the 11 cases where the device intrinsically malfunctioned with the plastic dissociating from the metal plate," Dr Rosen told the Street.com.
Also, he said, "it is striking that only 15% of retrieved specimens [Charite disc] were sent to the manufacturer for analysis."
"It is accepted widely," he says, "and with little question - that retrieval and analysis of any implant is critical for both evaluation and research."
But the legal troubles of J&J and DePuy are by far not limited to the Charite disc or civil court arena. They now have the US Department of Justice to contend with.
In June 2006, DePuy was served up with a subpoena by the Antitrust Division of the DOJ, requesting documents related to the manufacture and sale of the company's orthopaedic devices. The DOJ even had search warrants executed in connection with the investigation, according to documents filed by J&J with the SEC on August 8, 2006.
The Wall Street Journal, reports that a spokeswoman at the DOJ has said that they are looking into "anticompetitive practices in the implant-device industry."
On September 11, 2006, Dow Jones reported that the subpoenas sought several years' worth of documents regarding possible federal criminal and antitrust-law violations.
The antitrust probe is one of two known DOJ investigations, and Dow Jones notes that "an earlier investigation regarding doctor-company relationships is still an open question."
All total, five firms were slapped with subpoenas including Biomet Inc, Stryker Corp, Zimmer Holdings, Smith & Nephew and Johnson & Johnson's DePuy Orthopaedics
The same five companies, Dow Jones says, reported receiving a separate batch of subpoenas regarding a probe of consulting or professional services agreements between companies and orthopedics surgeons in early 2005.
Analysts say the probe revolves around whether the companies actually received the services for which they paid the surgeons or whether they used the agreements to get the doctors to use their devices.
Lehman Brothers analyst, Bob Hopkins, said in a research note that the original investigation may have escalated. "There is a possibility that this is a completely separate investigation, but it is likely that the two are related," he wrote.
"Either way," he says, "the involvement of the antitrust division and the wording of the subpoena suggest a serious investigation that may be ongoing for some time."
"A number of investigations are under way," Lewis Morris, chief counsel to the inspector general for the Department of Health and Human Services told the New York Time on September 22, 2006.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for valuable services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
"The potential for inappropriately steering medical decisions is always at play, and there is always the risk that doctors will prescribe a particular device because of their own financial interest and not the interest of the patient," Mr Morris said in the Times.
The price spread for medical devices provides plenty of leeway to tack on kickbacks for surgeons. "With manufacturers guarding pricing information closely," the Times reports, "the price of a given device can vary by thousands of dollars from one hospital to the next."
For instance, one hospital in the New York area paid $8,000 more for a DePuy hip than a competitor, according to a recent survey by the Greater New York Hospital Association.
In the August 2006 Health Law Fraud Alert, Gregory J. Naclerio, Esq, says that the subpoenas issued to the five device makers "demanded consulting contracts, professional services agreements, and related documents which could evidence the corporation's arrangements with orthopedic surgeons."
"Clearly," he says, "the thrust of the Justice Department's subpoenas is to establish whether the device companies are in some way offering "remuneration" to orthopedic surgeons to use their products."
Typically, he says, it is through consulting contracts and professional services agreements that ways are found to compensate physicians for ordering a company's products.
"Educational seminars at "resort areas" where the "free time" exceeds the "seminar time,"" he states, "as well as stipends for research and educational programs that require little or no work by the physician only serve to confirm the government's belief that violations of the anti-kickback statute are occurring."
"Under the Medicare/Medicaid anti-kickback statute," Mr Naclerio explains, "it is illegal "to offer" or "to accept" remuneration in return for a referral of a patient or services paid for by Medicare."
Not only does the acceptance of payment constitute a federal felony, with a maximum of 5 years imprisonment, he says, "it can also result in civil federal false claims violations and exclusion from the Medicare/Medicaid program."
Based on reports that the action by the DOJ constitutes a second round of subpoenas that were issued to the same five device makers, Mr Naclerio writes in the alert, "This can only lead one to conclude that the first round of subpoenas led the government to believe that further inquiry was required."
According to the September 26, 2006, New York Times, the rising cost of devices and the relationships between doctors and device makers are "causing profound concern among hospital executives, health care economists and other experts, mirroring recent reactions to the way pharmaceuticals are marketed."
"In the last two years," it reports, "Medicare payments to hospitals for implant surgery have risen about 40 percent, from $10 billion to $14 billion, according to an analysis of Medicare records."
And that's why, the Times says, federal prosecutors are questioning the deals between device makers and doctors, trying to determine if they amount to payoffs.
One example of payoffs described involved Dr William Overdyke, an assistant professor at the Louisiana State University Health Sciences Center, who oversaw operations to replace worn-down knees. From 2000 to the middle of 2001, whenever a patient needed an artificial knee, he or the residents he supervised, implanted one made by Sulzer Medical, state documents show.
Dr Overdyke claims he used the Sulzer knee because it was the best available. But Louisiana officials say he had another incentive, the $175,000 a year that he stood to make from contracts with Sulzer that called for him to consult on product design and "promote and educate other surgeons" on the virtues of Sulzer products.
Before signing with Sulzer, Dr Overdyke said that he had never used the company's artificial knee but as it turns out, he previously had a contract with another company, Wright Medical and while under that contract, he and his residents largely used Wright's artificial knees.
Wright Medical paid him $150,000 to $200,000 annually, according to the Times, quoting a court deposition.
Dr Overdyke paid $10,000 in fines after Louisiana officials determined that his consulting arrangements with Sulzer were an improper conflict of interest under the state ethics code.
"There is another central figure helping cement the company-doctor relationship," according to the New York Times, "the sales representative."
The representatives work on commission of as much as 10 to 20% and according to the Times, can make as much, if not more, from an operation than the surgeon, industry consultants say.
They frequently make several hundred thousand dollars a year, the Times says.
One former salesman who refused to be identified because he still worked in the industry, told the Times that to encourage a surgeon's loyalty, he used to pay the doctor's assistant $200 a case. "It was a bonus they didn't have to pay with their money," he said.
In addition to all of its legal problems, J&J has also run into trouble with retaining coverage by public and private health care insurance plans to pay for the Charite disc surgery.
Medicare will no longer pay for the procedure with patients over 60. That decision to deny coverage for the Charite has prompted private health insurance companies to not cover the device.
For instance, on September 1, 2006, Tufts Health Plan announced that it does not cover the use of an artificial disc in the treatment of degenerative disc disease, because according to the Plan's Evidence of Coverage (EOC), a treatment or procedure is considered experimental or investigative "if reliable evidence shows that prevailing opinion among experts regarding the treatment is that more studies or clinical trials are necessary to determine its safety, efficacy, toxicity, maximum tolerated dose, or its efficacy as compared with a standard means of treatment or diagnosis."
On August 18, 2006 the US Department of Labor and Industry put into rule an existing medical coverage decision to not authorize the Charite disc for the care and treatment of injured workers and victims of crime, based in part it said, on the fact that the disc had only been on the market since October 2004 and yet "more than 133 serious adverse events have been reported to the FDA from its use."
"The department reviewed the best scientific evidence on artificial discs and made a noncoverage decision," it said, "because there was not substantial scientific support and thus the device has not been proven to be safe and efficacious."
"Putting this noncoverage decision in rule," the department advised, "will give the department more legal support if challenged about the noncoverage decision and ensure the safety of treatment provided to injured workers since the Charite III disc is a treatment option not proven by scientific evidence. "
The Department also noted that Blue Cross Blue Shield reviewed the Charite disc and came to the conclusion that "the evidence is insufficient to determine whether the use of artificial vertebral discs improves the net health outcome or whether they are as beneficial as any established alternative... Therefore, the use of artificial vertebral discs for degenerative disc disease does not meet the Technology Evaluation Center (TEC) criteria."
However, for what its worth, according to the July 12, 2006 Orange Country Regiser, J&J is educating doctors and patients on the appeals process when coverage is denied and the company's Web site offers a bibliography of articles about Charite to "enhance your case," as well as addresses for contacting state insurance regulators.
Charite disc overall sales will also be much lower from here on in since it recently gained a competitor. In August 2006, Synthes Inc, a Swiss medical device maker, won FDA approval for the artificial spine disc ProDisc-L . According to Dow Jones, financial analysts estimate that around $100 million sales in 2007 will stem from ProDisc-L.
In less than two years, the FDA has received over 130 reports of serious adverse events related to the Charite disc.
Lumbar spinal fusion is a procedure in which the vertebrae of the spine are fused together so that motion can no longer occur. As an alternative, the Charite disc replacement surgery is supposed to restore spinal flexibility, reduce pain and improve the patient's functional activities.
The disc is manufactured by DePuy Spine, a Johnson and Johnson subsidiary, and was approved for use in the US in October 2004, for patients who have degenerative disc disease at one level in the spine and have been unable to obtain relief from low back pain from other spine treatments for a period of at least 6 months.
When seeking approval by the FDA, J&J provided only one 2-year trial purporting to show that the Charite worked as well as the Bagby and Kuslich (BAK) cage, a product used in spinal fusions surgery, which was abandoned years ago by many surgeons due its high failure rate.
Critics say a 2-year trial is far too short for a device that is expected to remain in the spine indefinitely without becoming displaced or causing other problems. Many experts now predict that over the next decade, there will be a slew of Charite patients who will suffer complications and require surgical removal of the disc, which they say is problematic because the removal procedure can be more dangerous than the original implant surgery.
The procedure for replacement involves an anterior approach for exposure for the spine and Santos et al, states, "Revisions surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures."
Expert also warn that other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can occur.
In the study submitted to the FDA for approval, J&J did not include pain relief as a measure of the disc's success and the product's ability to restore natural motion was also not listed as a definition of success. And apparently for good reason, because the disc does not live up to its promise of relief.
One Charite victim states: "I have retained my range of motion that is evidently so important."
"However," he says, "I am still experiencing the same, if not worse pain than prior to the surgery."
"I have no idea what is wrong with the implant," he notes, "if it has moved, broken or was just part of a bigger undiagnosed problem."
He hesitates to investigate, he says, because his hospital experience was "so horrid."
"So if a surgical remedy is needed to fix whatever is wrong," he states, "I'm not going for it again."
In conclusion, the patient says he would not recommend this procedure to anyone.
The same sentiments are shared by many Charite patients. To date, out of the 5,000 patients implanted with the disc, the Houston, Texas Pulaski and Middleman law firm leads a group of firms that represent over 350 patients who have been injured and allege that the Charite disc is defective and that the company failed to adequately warn patients about the potential risks associated with the disc.
In addition, according the Street.com on June 5, 2006, a Chicago law firm has more than 200 clients who have suffered complications from the disc and are seeking reparations from DePuy.
Dr Charles Rosen, founding director of the University of California-Irvine Spine Center, is an outspoken critic of the Charite disc. On June 5, 2006, he told the Street.com, that after much prodding, he finally got the FDA to send him 67 reports on adverse events involving the Charite disc and that he found the information incomplete and worrisome.
Some "71% of reports were generated by 'company representatives' only, [and] not one report to the FDA concluded any device malfunctioned or was defective - including the 11 cases where the device intrinsically malfunctioned with the plastic dissociating from the metal plate," Dr Rosen told the Street.com.
Also, he said, "it is striking that only 15% of retrieved specimens [Charite disc] were sent to the manufacturer for analysis."
"It is accepted widely," he says, "and with little question - that retrieval and analysis of any implant is critical for both evaluation and research."
But the legal troubles of J&J and DePuy are by far not limited to the Charite disc or civil court arena. They now have the US Department of Justice to contend with.
In June 2006, DePuy was served up with a subpoena by the Antitrust Division of the DOJ, requesting documents related to the manufacture and sale of the company's orthopaedic devices. The DOJ even had search warrants executed in connection with the investigation, according to documents filed by J&J with the SEC on August 8, 2006.
The Wall Street Journal, reports that a spokeswoman at the DOJ has said that they are looking into "anticompetitive practices in the implant-device industry."
On September 11, 2006, Dow Jones reported that the subpoenas sought several years' worth of documents regarding possible federal criminal and antitrust-law violations.
The antitrust probe is one of two known DOJ investigations, and Dow Jones notes that "an earlier investigation regarding doctor-company relationships is still an open question."
All total, five firms were slapped with subpoenas including Biomet Inc, Stryker Corp, Zimmer Holdings, Smith & Nephew and Johnson & Johnson's DePuy Orthopaedics
The same five companies, Dow Jones says, reported receiving a separate batch of subpoenas regarding a probe of consulting or professional services agreements between companies and orthopedics surgeons in early 2005.
Analysts say the probe revolves around whether the companies actually received the services for which they paid the surgeons or whether they used the agreements to get the doctors to use their devices.
Lehman Brothers analyst, Bob Hopkins, said in a research note that the original investigation may have escalated. "There is a possibility that this is a completely separate investigation, but it is likely that the two are related," he wrote.
"Either way," he says, "the involvement of the antitrust division and the wording of the subpoena suggest a serious investigation that may be ongoing for some time."
"A number of investigations are under way," Lewis Morris, chief counsel to the inspector general for the Department of Health and Human Services told the New York Time on September 22, 2006.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for valuable services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
"The potential for inappropriately steering medical decisions is always at play, and there is always the risk that doctors will prescribe a particular device because of their own financial interest and not the interest of the patient," Mr Morris said in the Times.
The price spread for medical devices provides plenty of leeway to tack on kickbacks for surgeons. "With manufacturers guarding pricing information closely," the Times reports, "the price of a given device can vary by thousands of dollars from one hospital to the next."
For instance, one hospital in the New York area paid $8,000 more for a DePuy hip than a competitor, according to a recent survey by the Greater New York Hospital Association.
In the August 2006 Health Law Fraud Alert, Gregory J. Naclerio, Esq, says that the subpoenas issued to the five device makers "demanded consulting contracts, professional services agreements, and related documents which could evidence the corporation's arrangements with orthopedic surgeons."
"Clearly," he says, "the thrust of the Justice Department's subpoenas is to establish whether the device companies are in some way offering "remuneration" to orthopedic surgeons to use their products."
Typically, he says, it is through consulting contracts and professional services agreements that ways are found to compensate physicians for ordering a company's products.
"Educational seminars at "resort areas" where the "free time" exceeds the "seminar time,"" he states, "as well as stipends for research and educational programs that require little or no work by the physician only serve to confirm the government's belief that violations of the anti-kickback statute are occurring."
"Under the Medicare/Medicaid anti-kickback statute," Mr Naclerio explains, "it is illegal "to offer" or "to accept" remuneration in return for a referral of a patient or services paid for by Medicare."
Not only does the acceptance of payment constitute a federal felony, with a maximum of 5 years imprisonment, he says, "it can also result in civil federal false claims violations and exclusion from the Medicare/Medicaid program."
Based on reports that the action by the DOJ constitutes a second round of subpoenas that were issued to the same five device makers, Mr Naclerio writes in the alert, "This can only lead one to conclude that the first round of subpoenas led the government to believe that further inquiry was required."
According to the September 26, 2006, New York Times, the rising cost of devices and the relationships between doctors and device makers are "causing profound concern among hospital executives, health care economists and other experts, mirroring recent reactions to the way pharmaceuticals are marketed."
"In the last two years," it reports, "Medicare payments to hospitals for implant surgery have risen about 40 percent, from $10 billion to $14 billion, according to an analysis of Medicare records."
And that's why, the Times says, federal prosecutors are questioning the deals between device makers and doctors, trying to determine if they amount to payoffs.
One example of payoffs described involved Dr William Overdyke, an assistant professor at the Louisiana State University Health Sciences Center, who oversaw operations to replace worn-down knees. From 2000 to the middle of 2001, whenever a patient needed an artificial knee, he or the residents he supervised, implanted one made by Sulzer Medical, state documents show.
Dr Overdyke claims he used the Sulzer knee because it was the best available. But Louisiana officials say he had another incentive, the $175,000 a year that he stood to make from contracts with Sulzer that called for him to consult on product design and "promote and educate other surgeons" on the virtues of Sulzer products.
Before signing with Sulzer, Dr Overdyke said that he had never used the company's artificial knee but as it turns out, he previously had a contract with another company, Wright Medical and while under that contract, he and his residents largely used Wright's artificial knees.
Wright Medical paid him $150,000 to $200,000 annually, according to the Times, quoting a court deposition.
Dr Overdyke paid $10,000 in fines after Louisiana officials determined that his consulting arrangements with Sulzer were an improper conflict of interest under the state ethics code.
"There is another central figure helping cement the company-doctor relationship," according to the New York Times, "the sales representative."
The representatives work on commission of as much as 10 to 20% and according to the Times, can make as much, if not more, from an operation than the surgeon, industry consultants say.
They frequently make several hundred thousand dollars a year, the Times says.
One former salesman who refused to be identified because he still worked in the industry, told the Times that to encourage a surgeon's loyalty, he used to pay the doctor's assistant $200 a case. "It was a bonus they didn't have to pay with their money," he said.
In addition to all of its legal problems, J&J has also run into trouble with retaining coverage by public and private health care insurance plans to pay for the Charite disc surgery.
Medicare will no longer pay for the procedure with patients over 60. That decision to deny coverage for the Charite has prompted private health insurance companies to not cover the device.
For instance, on September 1, 2006, Tufts Health Plan announced that it does not cover the use of an artificial disc in the treatment of degenerative disc disease, because according to the Plan's Evidence of Coverage (EOC), a treatment or procedure is considered experimental or investigative "if reliable evidence shows that prevailing opinion among experts regarding the treatment is that more studies or clinical trials are necessary to determine its safety, efficacy, toxicity, maximum tolerated dose, or its efficacy as compared with a standard means of treatment or diagnosis."
On August 18, 2006 the US Department of Labor and Industry put into rule an existing medical coverage decision to not authorize the Charite disc for the care and treatment of injured workers and victims of crime, based in part it said, on the fact that the disc had only been on the market since October 2004 and yet "more than 133 serious adverse events have been reported to the FDA from its use."
"The department reviewed the best scientific evidence on artificial discs and made a noncoverage decision," it said, "because there was not substantial scientific support and thus the device has not been proven to be safe and efficacious."
"Putting this noncoverage decision in rule," the department advised, "will give the department more legal support if challenged about the noncoverage decision and ensure the safety of treatment provided to injured workers since the Charite III disc is a treatment option not proven by scientific evidence. "
The Department also noted that Blue Cross Blue Shield reviewed the Charite disc and came to the conclusion that "the evidence is insufficient to determine whether the use of artificial vertebral discs improves the net health outcome or whether they are as beneficial as any established alternative... Therefore, the use of artificial vertebral discs for degenerative disc disease does not meet the Technology Evaluation Center (TEC) criteria."
However, for what its worth, according to the July 12, 2006 Orange Country Regiser, J&J is educating doctors and patients on the appeals process when coverage is denied and the company's Web site offers a bibliography of articles about Charite to "enhance your case," as well as addresses for contacting state insurance regulators.
Charite disc overall sales will also be much lower from here on in since it recently gained a competitor. In August 2006, Synthes Inc, a Swiss medical device maker, won FDA approval for the artificial spine disc ProDisc-L . According to Dow Jones, financial analysts estimate that around $100 million sales in 2007 will stem from ProDisc-L.
Sunday, August 1, 2010
Johnson & Johnson Chirate Spinal Disc Under Fire
Evelyn Pringle September 2006
The Pulaski and Middleman law firm in Houston, Texas head's a group of law firms that represent over 350 injured Charite spinal disc recipients. The patients allege that the disc is defective, that the device was improperly marketed and that the company did not adequately warn of the disc's dangers.
The Charite artificial disc was first approved for use in the US in October 2004, although it had been used in the European market since 1987. The device was approved to relieve pain by replacing the damaged disc with the Chirate disc, as an alternative to the surgical procedure known as lumbar spinal fusion surgery.
The disc was developed with the premise that segmental mobility will improve outcomes, as has been the case for artificial hip and knee replacements. The current Charite disc is the third modification of a device first developed in 1982 by Buttener-Janz and Schellnack at the Charite Clinic in the former East Germany.
DePuy Spine, a division of Johnson & Johnson, acquired the Link Spine Group in 2003, and gained exclusive worldwide rights to the Charite disc. Since the disc was approved, more than 5,000 people have received the implant in the US, according to DePuy Spine's Bill Christianson, vice president of regulatory affairs, in USA Today on July 25, 2006.
At present, experts claim, the best candidates for disc replacement are adults who have disc degeneration in only one disc in the lumbar spine, either the disc between the fourth and fifth lumbar vertebrae or the disc between the fifth lumbar vertebra and the sacrum.
Under FDA guidelines, before disc surgery, individuals must have undergone at least 6 months of treatment, such as physical therapy, pain medication, or wearing a back brace, without showing improvement, and must be in overall good health with no signs of infection, osteoporosis or arthritis.
Experts stress the importance of making sure a patient is the right candidate for this surgery. According to Dr Stephen Hochschler and Dr Paul McAfee, examples of how inappropriate patient selection can have serious consequences are:
"If a patient receives an artificial disc, but the disc that was replaced was not actually the cause of the patient’s pain, then the patient will have undergone an extensive, invasive and costly procedure but still have the same level of pain. This may seem like an incredibly obvious point, but with back pain it is often difficult to pinpoint the precise cause of a patient’s pain. Accurate and careful diagnosis of the patient’s pain generator is crucial and cannot be overemphasized.
"If the patient does have a painful disc, but other factors (such as significant degenerative changes in the facet joint) are present, then the patient may have to undergo a revision surgery after the initial surgery to either correct the placement of the disc or fuse the spine—a situation that is definitely best avoided by correctly assessing all the risk factors prior to the first surgery."
Many critics contend that the Chirate disc is just as big a threat to patients as the problems it is supposed to cure. The disc has been promoted as an alternative to fusion; yet, even in the short term studies, spontaneous and surgical fusion occurred.
The disc is required to function for many years, but information about long term benefits and risks, such as satisfaction, adjacent segment problems, and rate of re-operations, is not available because only one short term study, with a 24 month follow-up, was presented to the FDA when the disc was approved.
And even that study has come under attack because the benefits of the Charite in the context of a noninferiority trial, were shown to be noninferior to Bagby and Kuslich cages (BAK), used in spinal fusion, a failed procedure critics say that has not been performed in years.
The 2- year trial showed only that the disc was no worse than this specific type of spinal fusion surgery, according to a May 2005 FDA report.
Overall, the study found that 57% of Charite patients achieved "overall clinical success," compared with 47% of the spinal fusion patients. However, more than 3 out of 5 Charite patients, deemed successes, were still taking narcotic painkillers 24 months after surgery.
In addition, a higher number of Charite patients suffered severe or life-threatening events than spinal fusion patients, 15% compared to 9%, according to the FDA review.
Clinical success in the trial was defined by four criteria: (1) more than 25% improvement at 24 months after surgery, (2) no device failure, (3) no major complication, and (4) and no neurologic deterioration.
This composite outcome is unconvincing as a demonstration of net health benefit, according to a February 15, 2006, Memorandum, from the Centers for Medicare and Medicaid Services (CMS), particularly when these points are also considered:
"1) only 57% of disc replacement patients and 46% of BAK fusion patients met these four limited criteria; 2) in patients who were considered a clinical success at 24 months, 64% of the Charite group and 80.4% of the control were using narcotics; 3) at 24 months the change in VAS and ODI did not differ statistically from control; 4) the SF-36 PCS and MCS composite scores did not differ statistically from control; 5) no difference in operative time or blood loss between the two groups."
According to the CMS Memorandum, the surgical procedure for disc replacement involves an anterior approach for exposure of the spine. With this approach, complications of vessel injury can occur and have the potential to be life threatening (Santos, Polly et al. 2004). As to revision surgery, Santos, et al, state:
“Revision surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge. Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures.”
Other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can also occur (Santos, Polly et al. 2004).
In recent years, the cost benefit of surgery for degenerative disc disease has come under scrutiny. The 2005 Cochrane review of surgery for degenerative lumbar spondylosis states, “There is no good evidence on cost-effectiveness” (Gibson, Wassell 2005).
Concern over the cost benefit has been expressed specifically for the artificial disc. Within 5 years of its release, the CMS noted, it was predicted that spinal arthroplasty (lumbar and cervical) could reach an annual cost of $2.18 billion in the US, with the suggestion by Singh that this estimate is conservative (Singh, Vaccaro et al. 2004).
Santos stated, “…long-term clinical outcome using validated instruments are necessary to justify the added cost of these procedures."
Dr Sohail Mirza, a medical professor at the University of Washington, criticized Charite's marketing slogan of "natural motion is back." It "implies that the artificial disc creates a normal spine; it does not," he stated last year in the journal Spine.
"Contrary to optimistic marketing, the data," he wrote, "argue for caution by patients and surgeons. Hope for a cure of back pain and a marketing bonanza must be held in check."
As of July 2006, more than 130 serious adverse events have been reported to the FDA associated with the Chirate disc.
In 2005, the FDA performed an analysis of adverse events reported in the Manufacturer and User Facility Device Experience Database (MAUDE), at the request of CMS. The analysis includes Medical Device Reports (MDRs) that were entered into the database between August 11, 2003 (first report received) and November 16, 2005.
A total of 101 MDRs were analyzed for 96 patients, with 1 MDR for the Prodisc device in addition to the Charite devices.
The most frequently reported event was device migration out of the implanted location, with 54 of 96 patients (56%) experiencing this effect. Seventy-six patients (79%) had a second surgery to remove all or part of the implant, to correct problems with the device, or to correct problems produced during the surgery. Fifty of the 76 (66%) patients had second surgery due to device migration.
The most common second surgery was to remove all or part of the disc followed by spinal fusion of the implanted motion segment. Twelve patients had 2 prostheses placed despite the device labeling for only one device implantation. Most adverse events that required second surgery occurred in the first 2 months after implantation. Two deaths were reported which were both attributed to pulmonary emboli.
Dr Charles Rosen, associate clinical professor of spine surgery at the University of California, Irvine, told the LA Times on August 5, 2006, that he has seen 10 patients since late last year, complaining of worsening pain after receiving the Charite disc and that some patients suffered fracturing and an abnormal pulling apart of the joints of the spine.
He says the Chirate is unsafe and should never have been approved because a 2-year study is too short for a disc that will remain in the spine for many years with implant patients averaging 40-years old.
"There is no solid evidence that this will last for more than five or 10 years and they will not need to have another operation," Dr Rosen said.
According to Times, Dr Allyson Fried-Cain, 52, a former foot-and-ankle surgeon, has sued the device maker, saying she suffered such an increase in pain after a Charite disc implantation that she lost her practice and had to sell her home in Marina del Rey, California.
Dr Fried-Cain, a former marathon runner whose back injury resulted from a car accident, told the Times, "I couldn't do surgery anymore. I couldn't bend over,"
"This implant has destroyed my life," she said.
According to the LA Times on August 5, 2006, spinal surgery is becoming a very lucrative business, "with at least $3.2 billion spent last year in the U.S. on spinal fusion."
In August 2006, the FDA approved the ProDisc-L, made by Swiss medical device maker Synthes Inc, which is expected to compete against the Charite.
In its approval letter to Synthes, the FDA said patients receiving the disc should have tried at least 6 months of "conservative" treatment with other therapies such as exercise and medication.
As a condition of approval, Synthes agreed to continue studying the disc for long term safety and effectiveness in a study involving at least 286 patients. The company is also required to conduct a yearly analysis of major adverse events and report the number of devices sold and implanted each year.
The booming spine surgery industry suffered a serious financial set-back earlier this year, when the Medicare program stopped paying for the Charite disc in patients over 60, noting that the surgery costs between $30,000 and $50,000, and has not sufficiently been tested for long term affects. The CMS stated "that the evidence is not adequate to conclude that the Charite lumbar artificial disc is reasonable and necessary."
"Therefore," the CMS memo concluded, "we propose to issue a national noncoverage determination."
The Pulaski and Middleman law firm in Houston, Texas head's a group of law firms that represent over 350 injured Charite spinal disc recipients. The patients allege that the disc is defective, that the device was improperly marketed and that the company did not adequately warn of the disc's dangers.
The Charite artificial disc was first approved for use in the US in October 2004, although it had been used in the European market since 1987. The device was approved to relieve pain by replacing the damaged disc with the Chirate disc, as an alternative to the surgical procedure known as lumbar spinal fusion surgery.
The disc was developed with the premise that segmental mobility will improve outcomes, as has been the case for artificial hip and knee replacements. The current Charite disc is the third modification of a device first developed in 1982 by Buttener-Janz and Schellnack at the Charite Clinic in the former East Germany.
DePuy Spine, a division of Johnson & Johnson, acquired the Link Spine Group in 2003, and gained exclusive worldwide rights to the Charite disc. Since the disc was approved, more than 5,000 people have received the implant in the US, according to DePuy Spine's Bill Christianson, vice president of regulatory affairs, in USA Today on July 25, 2006.
At present, experts claim, the best candidates for disc replacement are adults who have disc degeneration in only one disc in the lumbar spine, either the disc between the fourth and fifth lumbar vertebrae or the disc between the fifth lumbar vertebra and the sacrum.
Under FDA guidelines, before disc surgery, individuals must have undergone at least 6 months of treatment, such as physical therapy, pain medication, or wearing a back brace, without showing improvement, and must be in overall good health with no signs of infection, osteoporosis or arthritis.
Experts stress the importance of making sure a patient is the right candidate for this surgery. According to Dr Stephen Hochschler and Dr Paul McAfee, examples of how inappropriate patient selection can have serious consequences are:
"If a patient receives an artificial disc, but the disc that was replaced was not actually the cause of the patient’s pain, then the patient will have undergone an extensive, invasive and costly procedure but still have the same level of pain. This may seem like an incredibly obvious point, but with back pain it is often difficult to pinpoint the precise cause of a patient’s pain. Accurate and careful diagnosis of the patient’s pain generator is crucial and cannot be overemphasized.
"If the patient does have a painful disc, but other factors (such as significant degenerative changes in the facet joint) are present, then the patient may have to undergo a revision surgery after the initial surgery to either correct the placement of the disc or fuse the spine—a situation that is definitely best avoided by correctly assessing all the risk factors prior to the first surgery."
Many critics contend that the Chirate disc is just as big a threat to patients as the problems it is supposed to cure. The disc has been promoted as an alternative to fusion; yet, even in the short term studies, spontaneous and surgical fusion occurred.
The disc is required to function for many years, but information about long term benefits and risks, such as satisfaction, adjacent segment problems, and rate of re-operations, is not available because only one short term study, with a 24 month follow-up, was presented to the FDA when the disc was approved.
And even that study has come under attack because the benefits of the Charite in the context of a noninferiority trial, were shown to be noninferior to Bagby and Kuslich cages (BAK), used in spinal fusion, a failed procedure critics say that has not been performed in years.
The 2- year trial showed only that the disc was no worse than this specific type of spinal fusion surgery, according to a May 2005 FDA report.
Overall, the study found that 57% of Charite patients achieved "overall clinical success," compared with 47% of the spinal fusion patients. However, more than 3 out of 5 Charite patients, deemed successes, were still taking narcotic painkillers 24 months after surgery.
In addition, a higher number of Charite patients suffered severe or life-threatening events than spinal fusion patients, 15% compared to 9%, according to the FDA review.
Clinical success in the trial was defined by four criteria: (1) more than 25% improvement at 24 months after surgery, (2) no device failure, (3) no major complication, and (4) and no neurologic deterioration.
This composite outcome is unconvincing as a demonstration of net health benefit, according to a February 15, 2006, Memorandum, from the Centers for Medicare and Medicaid Services (CMS), particularly when these points are also considered:
"1) only 57% of disc replacement patients and 46% of BAK fusion patients met these four limited criteria; 2) in patients who were considered a clinical success at 24 months, 64% of the Charite group and 80.4% of the control were using narcotics; 3) at 24 months the change in VAS and ODI did not differ statistically from control; 4) the SF-36 PCS and MCS composite scores did not differ statistically from control; 5) no difference in operative time or blood loss between the two groups."
According to the CMS Memorandum, the surgical procedure for disc replacement involves an anterior approach for exposure of the spine. With this approach, complications of vessel injury can occur and have the potential to be life threatening (Santos, Polly et al. 2004). As to revision surgery, Santos, et al, state:
“Revision surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge. Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures.”
Other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can also occur (Santos, Polly et al. 2004).
In recent years, the cost benefit of surgery for degenerative disc disease has come under scrutiny. The 2005 Cochrane review of surgery for degenerative lumbar spondylosis states, “There is no good evidence on cost-effectiveness” (Gibson, Wassell 2005).
Concern over the cost benefit has been expressed specifically for the artificial disc. Within 5 years of its release, the CMS noted, it was predicted that spinal arthroplasty (lumbar and cervical) could reach an annual cost of $2.18 billion in the US, with the suggestion by Singh that this estimate is conservative (Singh, Vaccaro et al. 2004).
Santos stated, “…long-term clinical outcome using validated instruments are necessary to justify the added cost of these procedures."
Dr Sohail Mirza, a medical professor at the University of Washington, criticized Charite's marketing slogan of "natural motion is back." It "implies that the artificial disc creates a normal spine; it does not," he stated last year in the journal Spine.
"Contrary to optimistic marketing, the data," he wrote, "argue for caution by patients and surgeons. Hope for a cure of back pain and a marketing bonanza must be held in check."
As of July 2006, more than 130 serious adverse events have been reported to the FDA associated with the Chirate disc.
In 2005, the FDA performed an analysis of adverse events reported in the Manufacturer and User Facility Device Experience Database (MAUDE), at the request of CMS. The analysis includes Medical Device Reports (MDRs) that were entered into the database between August 11, 2003 (first report received) and November 16, 2005.
A total of 101 MDRs were analyzed for 96 patients, with 1 MDR for the Prodisc device in addition to the Charite devices.
The most frequently reported event was device migration out of the implanted location, with 54 of 96 patients (56%) experiencing this effect. Seventy-six patients (79%) had a second surgery to remove all or part of the implant, to correct problems with the device, or to correct problems produced during the surgery. Fifty of the 76 (66%) patients had second surgery due to device migration.
The most common second surgery was to remove all or part of the disc followed by spinal fusion of the implanted motion segment. Twelve patients had 2 prostheses placed despite the device labeling for only one device implantation. Most adverse events that required second surgery occurred in the first 2 months after implantation. Two deaths were reported which were both attributed to pulmonary emboli.
Dr Charles Rosen, associate clinical professor of spine surgery at the University of California, Irvine, told the LA Times on August 5, 2006, that he has seen 10 patients since late last year, complaining of worsening pain after receiving the Charite disc and that some patients suffered fracturing and an abnormal pulling apart of the joints of the spine.
He says the Chirate is unsafe and should never have been approved because a 2-year study is too short for a disc that will remain in the spine for many years with implant patients averaging 40-years old.
"There is no solid evidence that this will last for more than five or 10 years and they will not need to have another operation," Dr Rosen said.
According to Times, Dr Allyson Fried-Cain, 52, a former foot-and-ankle surgeon, has sued the device maker, saying she suffered such an increase in pain after a Charite disc implantation that she lost her practice and had to sell her home in Marina del Rey, California.
Dr Fried-Cain, a former marathon runner whose back injury resulted from a car accident, told the Times, "I couldn't do surgery anymore. I couldn't bend over,"
"This implant has destroyed my life," she said.
According to the LA Times on August 5, 2006, spinal surgery is becoming a very lucrative business, "with at least $3.2 billion spent last year in the U.S. on spinal fusion."
In August 2006, the FDA approved the ProDisc-L, made by Swiss medical device maker Synthes Inc, which is expected to compete against the Charite.
In its approval letter to Synthes, the FDA said patients receiving the disc should have tried at least 6 months of "conservative" treatment with other therapies such as exercise and medication.
As a condition of approval, Synthes agreed to continue studying the disc for long term safety and effectiveness in a study involving at least 286 patients. The company is also required to conduct a yearly analysis of major adverse events and report the number of devices sold and implanted each year.
The booming spine surgery industry suffered a serious financial set-back earlier this year, when the Medicare program stopped paying for the Charite disc in patients over 60, noting that the surgery costs between $30,000 and $50,000, and has not sufficiently been tested for long term affects. The CMS stated "that the evidence is not adequate to conclude that the Charite lumbar artificial disc is reasonable and necessary."
"Therefore," the CMS memo concluded, "we propose to issue a national noncoverage determination."
Charite Spine Victims and DOJ Go After J&J
Evelyn Pringle October 2006
Lumbar spinal fusion is a procedure in which the vertebrae of the spine are fused together so that motion can no longer occur. As an alternative, the Chirate disc replacement surgery is supposed to restore spinal flexibility, reduce pain and improve the patient's functional activities. However, in less than two years, the FDA has received over 130 reports of serious adverse events related to the Chirate.
The disc is manufactured by DePuy Spine, a Johnson and Johnson subsidiary, and was approved for use in the US in October 2004, for patients who have degenerative disc disease at one level in the spine and have been unable to obtain relief from low back pain from other spine treatments for a period of at least 6 months.
When seeking approval by the FDA, J&J provided only one 2-year trial purporting to show that the Charite worked as well as the Bagby and Kuslich (BAK) cage, a product used in spinal fusions surgery, which was abandoned years ago by many surgeons due its high failure rate.
Critics say a 2-year trial is far too short for a device that is expected to remain in the spine indefinitely without becoming displaced or causing other problems. Many experts now predict that over the next decade, there will be a slew of Charite patients who will suffer complications and require surgical removal of the disc, which they say is problematic because the removal procedure can be more dangerous than the original implant surgery.
The procedure for replacement involves an anterior approach for exposure for the spine and Santos et al, states, “Revisions surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures.”
Expert also warn that other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can occur.
In the study submitted to the FDA for approval, J&J did not include pain relief as a measure of the disc's success and the product's ability to restore natural motion was also not listed as a definition of success. And apparently for good reason, because the disc does not live up to its promise of relief.
One Charite victim states: "I have retained my range of motion that is evidently so important."
"However," he says, "I am still experiencing the same, if not worse pain than prior to the surgery."
"I have no idea what is wrong with the implant," he notes, "if it has moved, broken or was just part of a bigger undiagnosed problem."
He hesitates to investigate, he says, because his hospital experience was "so horrid."
"So if a surgical remedy is needed to fix whatever is wrong," he states, "I'm not going for it again."
In conclusion, the patient says he would not recommend this procedure to anyone.
The same sentiments are shared by many Charite patients. To date, out of the 5,000 patients implanted with the disc, the Houston, Texas Pulaski and Middleman law firm leads a group of firms that represent over 350 patients who have been injured and allege that the Charite disc is defective and that the company failed to adequately warn patients about the potential risks associated with the disc.
In addition, according the Street.com on June 5, 2006, a Chicago law firm has more than 200 clients who have suffered complications from the disc and are seeking reparations from DePuy.
Dr Charles Rosen, founding director of the University of California-Irvine Spine Center, is an outspoken critic of the Charite disc. On June 5, 2006, he told the Street.com, that after much prodding, he finally got the FDA to send him 67 reports on adverse events involving the Charite disc and that he found the information incomplete and worrisome.
Some "71% of reports were generated by 'company representatives' only, [and] not one report to the FDA concluded any device malfunctioned or was defective -- including the 11 cases where the device intrinsically malfunctioned with the plastic dissociating from the metal plate," Dr Rosen told the Street.com.
Also, he said, "it is striking that only 15% of retrieved specimens [Charite disc] were sent to the manufacturer for analysis."
"It is accepted widely," he says, "and with little question -- that retrieval and analysis of any implant is critical for both evaluation and research."
But the legal troubles of J&J and DePuy are by far not limited to the Charite disc or civil court arena. They now has the US Department of Justice to contend with.
In June 2006, DePuy was served up with a subpoena by the Antitrust Division of the DOJ, requesting documents related to the manufacture and sale of the company's orthopaedic devices. The DOJ even had search warrants executed in connection with the investigation, according to documents filed by J&J with the SEC on August 8, 2006.
The Wall Street Journal, reports that a spokeswoman at the DOJ has said that they are looking into "anticompetitive practices in the implant-device industry."
On September 11, 2006, Dow Jones reported that the subpoenas sought several years' worth of documents regarding possible federal criminal and antitrust-law violations.
The antitrust probe is one of two known DOJ investigations, and Dow Jones notes that "an earlier investigation regarding doctor-company relationships is still an open question."
All total, five firms were slapped with subpoenas including Biomet Inc, Stryker Corp, Zimmer Holdings, Smith & Nephew and Johnson & Johnson's DePuy Orthopaedics
The same five companies, Dow Jones says, reported receiving a separate batch of subpoenas regarding a probe of consulting or professional services agreements between companies and orthopedics surgeons in early 2005.
Analysts say the probe revolves around whether the companies actually received the services for which they paid the surgeons or whether they used the agreements to get the doctors to use their devices.
Lehman Brothers analyst, Bob Hopkins, said in a research note that the original investigation may have escalated. "There is a possibility that this is a completely separate investigation, but it is likely that the two are related," he wrote.
"Either way," he says, "the involvement of the antitrust division and the wording of the subpoena suggest a serious investigation that may be ongoing for some time."
"A number of investigations are under way," Lewis Morris, chief counsel to the inspector general for the Department of Health and Human Services told the New York Time on September 22, 2006.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for valuable services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
"The potential for inappropriately steering medical decisions is always at play, and there is always the risk that doctors will prescribe a particular device because of their own financial interest and not the interest of the patient," Mr Morris said in the Times.
The price spread for medical devices provides plenty of leeway to tack on kickbacks for surgeons. "With manufacturers guarding pricing information closely," the Times reports, "the price of a given device can vary by thousands of dollars from one hospital to the next."
For instance, one hospital in the New York area paid $8,000 more for a DePuy hip than a competitor, according to a recent survey by the Greater New York Hospital Association.
In the August 2006 Health Law Fraud Alert, Gregory J. Naclerio, Esq, says that the subpoenas issued to the five device makers "demanded consulting contracts, professional services agreements, and related documents which could evidence the corporation's arrangements with orthopedic surgeons."
"Clearly," he says, "the thrust of the Justice Department's subpoenas is to establish whether the device companies are in some way offering “remuneration” to orthopedic surgeons to use their products."
Typically, he says, it is through consulting contracts and professional services agreements that ways are found to compensate physicians for ordering a company's products.
"Educational seminars at "resort areas" where the "free time" exceeds the "seminar time," he states, "as well as stipends for research and educational programs that require little or no work by the physician only serve to confirm the government's belief that violations of the anti-kickback statute are occurring."
"Under the Medicare/Medicaid anti-kickback statute," Mr Naclerio explains, "it is illegal "to offer" or "to accept" remuneration in return for a referral of a patient or services paid for by Medicare."
Not only does the acceptance of payment constitute a federal felony, with a maximum of 5 years imprisonment, he says, "it can also result in civil federal false claims violations and exclusion from the Medicare/Medicaid program."
Based on reports that the action by the DOJ constitutes a second round of subpoenas that were issued to the same five device makers, Mr Naclerio writes in the alert, "This can only lead one to conclude that the first round of subpoenas led the government to believe that further inquiry was required."
According to the September 26, 2006, New York Times, the rising cost of devices and the relationships between doctors and device makers are "causing profound concern among hospital executives, health care economists and other experts, mirroring recent reactions to the way pharmaceuticals are marketed."
"In the last two years," it reports, "Medicare payments to hospitals for implant surgery have risen about 40 percent, from $10 billion to $14 billion, according to an analysis of Medicare records."
And that's why, the Times says, federal prosecutors are questioning the deals between device makers and doctors, trying to determine if they amount to payoffs.
One example of payoffs described involved Dr William Overdyke, an assistant professor at the Louisiana State University Health Sciences Center, who oversaw operations to replace worn-down knees. From 2000 to the middle of 2001, whenever a patient needed an artificial knee, he or the residents he supervised, implanted one made by Sulzer Medical, state documents show.
Dr Overdyke claims he used the Sulzer knee because it was the best available. But Louisiana officials say he had another incentive, the $175,000 a year that he stood to make from contracts with Sulzer that called for him to consult on product design and "promote and educate other surgeons" on the virtues of Sulzer products.
Before signing with Sulzer, Dr Overdyke said that he had never used the company's artificial knee but as it turns out, he previously had a contract with another company, Wright Medical and while under that contract, he and his residents largely used Wright's artificial knees.
Wright Medical paid him $150,000 to $200,000 annually, according to the Times, quoting a court deposition.
Dr Overdyke paid $10,000 in fines after Louisiana officials determined that his consulting arrangements with Sulzer were an improper conflict of interest under the state ethics code.
"There is another central figure helping cement the company-doctor relationship," according to the New York Times, "the sales representative."
The representatives work on commission of as much as 10 to 20% and according to the Times, can make as much, if not more, from an operation than the surgeon, industry consultants say.
They frequently make several hundred thousand dollars a year, the Times says.
One former salesman who refused to be identified because he still worked in the industry, told the Times that to encourage a surgeon's loyalty, he used to pay the doctor's assistant $200 a case. "It was a bonus they didn't have to pay with their money," he said.
In addition to all of its legal problems, J&J has also run into trouble with retaining coverage by public and private health care insurance plans to pay for the Charite disc surgery.
Medicare will no longer pay for the procedure with patients over 60. That decision to deny coverage for the Charite has prompted private health insurance companies to not cover the device.
For instance, on September 1, 2006, Tufts Health Plan announced that it does not cover the use of an artificial disc in the treatment of degenerative disc disease, because according to the Plan's Evidence of Coverage (EOC), a treatment or procedure is considered experimental or investigative “if reliable evidence shows that prevailing opinion among experts regarding the treatment is that more studies or clinical trials are necessary to determine its safety, efficacy, toxicity, maximum tolerated dose, or its efficacy as compared with a standard means of treatment or diagnosis.”
On August 18, 2006 the US Department of Labor and Industry put into rule an existing medical coverage decision to not authorize the Charite disc for the care and treatment of injured workers and victims of crime, based in part it said, on the fact that the disc had only been on the market since October 2004 and yet "more than 133 serious adverse events have been reported to the FDA from its use."
"The department reviewed the best scientific evidence on artificial discs and made a noncoverage decision," it said, "because there was not substantial scientific support and thus the device has not been proven to be safe and efficacious."
"Putting this noncoverage decision in rule," the department advised, "will give the department more legal support if challenged about the noncoverage decision and ensure the safety of treatment provided to injured workers since the Charite III disc is a treatment option not proven by scientific evidence. "
The Department also noted that Blue Cross Blue Shield reviewed the Charite disc and came to the conclusion that “the evidence is insufficient to determine whether the use of artificial vertebral discs improves the net health outcome or whether they are as beneficial as any established alternative… Therefore, the use of artificial vertebral discs for degenerative disc disease does not meet the Technology Evaluation Center (TEC) criteria.”
However, for what its worth, according to the July 12, 2006 Orange Country Regiser, J&J is educating doctors and patients on the appeals process when coverage is denied and the company's Web site offers a bibliography of articles about Charite to "enhance your case," as well as addresses for contacting state insurance regulators.
Charite disc overall sales will also be much lower from here on in since it recently gained a competitor. In August 2006, Synthes Inc, a Swiss medical device maker, won FDA approval for the artificial spine disc ProDisc-L According to Dow Jones, financial analysts estimate that around $100 million sales in 2007 will stem from ProDisc-L.
Lumbar spinal fusion is a procedure in which the vertebrae of the spine are fused together so that motion can no longer occur. As an alternative, the Chirate disc replacement surgery is supposed to restore spinal flexibility, reduce pain and improve the patient's functional activities. However, in less than two years, the FDA has received over 130 reports of serious adverse events related to the Chirate.
The disc is manufactured by DePuy Spine, a Johnson and Johnson subsidiary, and was approved for use in the US in October 2004, for patients who have degenerative disc disease at one level in the spine and have been unable to obtain relief from low back pain from other spine treatments for a period of at least 6 months.
When seeking approval by the FDA, J&J provided only one 2-year trial purporting to show that the Charite worked as well as the Bagby and Kuslich (BAK) cage, a product used in spinal fusions surgery, which was abandoned years ago by many surgeons due its high failure rate.
Critics say a 2-year trial is far too short for a device that is expected to remain in the spine indefinitely without becoming displaced or causing other problems. Many experts now predict that over the next decade, there will be a slew of Charite patients who will suffer complications and require surgical removal of the disc, which they say is problematic because the removal procedure can be more dangerous than the original implant surgery.
The procedure for replacement involves an anterior approach for exposure for the spine and Santos et al, states, “Revisions surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures.”
Expert also warn that other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can occur.
In the study submitted to the FDA for approval, J&J did not include pain relief as a measure of the disc's success and the product's ability to restore natural motion was also not listed as a definition of success. And apparently for good reason, because the disc does not live up to its promise of relief.
One Charite victim states: "I have retained my range of motion that is evidently so important."
"However," he says, "I am still experiencing the same, if not worse pain than prior to the surgery."
"I have no idea what is wrong with the implant," he notes, "if it has moved, broken or was just part of a bigger undiagnosed problem."
He hesitates to investigate, he says, because his hospital experience was "so horrid."
"So if a surgical remedy is needed to fix whatever is wrong," he states, "I'm not going for it again."
In conclusion, the patient says he would not recommend this procedure to anyone.
The same sentiments are shared by many Charite patients. To date, out of the 5,000 patients implanted with the disc, the Houston, Texas Pulaski and Middleman law firm leads a group of firms that represent over 350 patients who have been injured and allege that the Charite disc is defective and that the company failed to adequately warn patients about the potential risks associated with the disc.
In addition, according the Street.com on June 5, 2006, a Chicago law firm has more than 200 clients who have suffered complications from the disc and are seeking reparations from DePuy.
Dr Charles Rosen, founding director of the University of California-Irvine Spine Center, is an outspoken critic of the Charite disc. On June 5, 2006, he told the Street.com, that after much prodding, he finally got the FDA to send him 67 reports on adverse events involving the Charite disc and that he found the information incomplete and worrisome.
Some "71% of reports were generated by 'company representatives' only, [and] not one report to the FDA concluded any device malfunctioned or was defective -- including the 11 cases where the device intrinsically malfunctioned with the plastic dissociating from the metal plate," Dr Rosen told the Street.com.
Also, he said, "it is striking that only 15% of retrieved specimens [Charite disc] were sent to the manufacturer for analysis."
"It is accepted widely," he says, "and with little question -- that retrieval and analysis of any implant is critical for both evaluation and research."
But the legal troubles of J&J and DePuy are by far not limited to the Charite disc or civil court arena. They now has the US Department of Justice to contend with.
In June 2006, DePuy was served up with a subpoena by the Antitrust Division of the DOJ, requesting documents related to the manufacture and sale of the company's orthopaedic devices. The DOJ even had search warrants executed in connection with the investigation, according to documents filed by J&J with the SEC on August 8, 2006.
The Wall Street Journal, reports that a spokeswoman at the DOJ has said that they are looking into "anticompetitive practices in the implant-device industry."
On September 11, 2006, Dow Jones reported that the subpoenas sought several years' worth of documents regarding possible federal criminal and antitrust-law violations.
The antitrust probe is one of two known DOJ investigations, and Dow Jones notes that "an earlier investigation regarding doctor-company relationships is still an open question."
All total, five firms were slapped with subpoenas including Biomet Inc, Stryker Corp, Zimmer Holdings, Smith & Nephew and Johnson & Johnson's DePuy Orthopaedics
The same five companies, Dow Jones says, reported receiving a separate batch of subpoenas regarding a probe of consulting or professional services agreements between companies and orthopedics surgeons in early 2005.
Analysts say the probe revolves around whether the companies actually received the services for which they paid the surgeons or whether they used the agreements to get the doctors to use their devices.
Lehman Brothers analyst, Bob Hopkins, said in a research note that the original investigation may have escalated. "There is a possibility that this is a completely separate investigation, but it is likely that the two are related," he wrote.
"Either way," he says, "the involvement of the antitrust division and the wording of the subpoena suggest a serious investigation that may be ongoing for some time."
"A number of investigations are under way," Lewis Morris, chief counsel to the inspector general for the Department of Health and Human Services told the New York Time on September 22, 2006.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for valuable services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
The question for investigators, he said, is whether the companies and the doctors have crossed a line from legitimate compensation for services rendered in the development of the devices to unethical payoffs for securing competitive advantage in a crowded marketplace.
"The potential for inappropriately steering medical decisions is always at play, and there is always the risk that doctors will prescribe a particular device because of their own financial interest and not the interest of the patient," Mr Morris said in the Times.
The price spread for medical devices provides plenty of leeway to tack on kickbacks for surgeons. "With manufacturers guarding pricing information closely," the Times reports, "the price of a given device can vary by thousands of dollars from one hospital to the next."
For instance, one hospital in the New York area paid $8,000 more for a DePuy hip than a competitor, according to a recent survey by the Greater New York Hospital Association.
In the August 2006 Health Law Fraud Alert, Gregory J. Naclerio, Esq, says that the subpoenas issued to the five device makers "demanded consulting contracts, professional services agreements, and related documents which could evidence the corporation's arrangements with orthopedic surgeons."
"Clearly," he says, "the thrust of the Justice Department's subpoenas is to establish whether the device companies are in some way offering “remuneration” to orthopedic surgeons to use their products."
Typically, he says, it is through consulting contracts and professional services agreements that ways are found to compensate physicians for ordering a company's products.
"Educational seminars at "resort areas" where the "free time" exceeds the "seminar time," he states, "as well as stipends for research and educational programs that require little or no work by the physician only serve to confirm the government's belief that violations of the anti-kickback statute are occurring."
"Under the Medicare/Medicaid anti-kickback statute," Mr Naclerio explains, "it is illegal "to offer" or "to accept" remuneration in return for a referral of a patient or services paid for by Medicare."
Not only does the acceptance of payment constitute a federal felony, with a maximum of 5 years imprisonment, he says, "it can also result in civil federal false claims violations and exclusion from the Medicare/Medicaid program."
Based on reports that the action by the DOJ constitutes a second round of subpoenas that were issued to the same five device makers, Mr Naclerio writes in the alert, "This can only lead one to conclude that the first round of subpoenas led the government to believe that further inquiry was required."
According to the September 26, 2006, New York Times, the rising cost of devices and the relationships between doctors and device makers are "causing profound concern among hospital executives, health care economists and other experts, mirroring recent reactions to the way pharmaceuticals are marketed."
"In the last two years," it reports, "Medicare payments to hospitals for implant surgery have risen about 40 percent, from $10 billion to $14 billion, according to an analysis of Medicare records."
And that's why, the Times says, federal prosecutors are questioning the deals between device makers and doctors, trying to determine if they amount to payoffs.
One example of payoffs described involved Dr William Overdyke, an assistant professor at the Louisiana State University Health Sciences Center, who oversaw operations to replace worn-down knees. From 2000 to the middle of 2001, whenever a patient needed an artificial knee, he or the residents he supervised, implanted one made by Sulzer Medical, state documents show.
Dr Overdyke claims he used the Sulzer knee because it was the best available. But Louisiana officials say he had another incentive, the $175,000 a year that he stood to make from contracts with Sulzer that called for him to consult on product design and "promote and educate other surgeons" on the virtues of Sulzer products.
Before signing with Sulzer, Dr Overdyke said that he had never used the company's artificial knee but as it turns out, he previously had a contract with another company, Wright Medical and while under that contract, he and his residents largely used Wright's artificial knees.
Wright Medical paid him $150,000 to $200,000 annually, according to the Times, quoting a court deposition.
Dr Overdyke paid $10,000 in fines after Louisiana officials determined that his consulting arrangements with Sulzer were an improper conflict of interest under the state ethics code.
"There is another central figure helping cement the company-doctor relationship," according to the New York Times, "the sales representative."
The representatives work on commission of as much as 10 to 20% and according to the Times, can make as much, if not more, from an operation than the surgeon, industry consultants say.
They frequently make several hundred thousand dollars a year, the Times says.
One former salesman who refused to be identified because he still worked in the industry, told the Times that to encourage a surgeon's loyalty, he used to pay the doctor's assistant $200 a case. "It was a bonus they didn't have to pay with their money," he said.
In addition to all of its legal problems, J&J has also run into trouble with retaining coverage by public and private health care insurance plans to pay for the Charite disc surgery.
Medicare will no longer pay for the procedure with patients over 60. That decision to deny coverage for the Charite has prompted private health insurance companies to not cover the device.
For instance, on September 1, 2006, Tufts Health Plan announced that it does not cover the use of an artificial disc in the treatment of degenerative disc disease, because according to the Plan's Evidence of Coverage (EOC), a treatment or procedure is considered experimental or investigative “if reliable evidence shows that prevailing opinion among experts regarding the treatment is that more studies or clinical trials are necessary to determine its safety, efficacy, toxicity, maximum tolerated dose, or its efficacy as compared with a standard means of treatment or diagnosis.”
On August 18, 2006 the US Department of Labor and Industry put into rule an existing medical coverage decision to not authorize the Charite disc for the care and treatment of injured workers and victims of crime, based in part it said, on the fact that the disc had only been on the market since October 2004 and yet "more than 133 serious adverse events have been reported to the FDA from its use."
"The department reviewed the best scientific evidence on artificial discs and made a noncoverage decision," it said, "because there was not substantial scientific support and thus the device has not been proven to be safe and efficacious."
"Putting this noncoverage decision in rule," the department advised, "will give the department more legal support if challenged about the noncoverage decision and ensure the safety of treatment provided to injured workers since the Charite III disc is a treatment option not proven by scientific evidence. "
The Department also noted that Blue Cross Blue Shield reviewed the Charite disc and came to the conclusion that “the evidence is insufficient to determine whether the use of artificial vertebral discs improves the net health outcome or whether they are as beneficial as any established alternative… Therefore, the use of artificial vertebral discs for degenerative disc disease does not meet the Technology Evaluation Center (TEC) criteria.”
However, for what its worth, according to the July 12, 2006 Orange Country Regiser, J&J is educating doctors and patients on the appeals process when coverage is denied and the company's Web site offers a bibliography of articles about Charite to "enhance your case," as well as addresses for contacting state insurance regulators.
Charite disc overall sales will also be much lower from here on in since it recently gained a competitor. In August 2006, Synthes Inc, a Swiss medical device maker, won FDA approval for the artificial spine disc ProDisc-L According to Dow Jones, financial analysts estimate that around $100 million sales in 2007 will stem from ProDisc-L.
Spine Surgery Performed Much Too Often
Evelyn Pringle November 2006
For senior citizens, the chances of receiving spine surgery, along with the serious complications that often follow, depends on where a patient lives, according to researchers from Dartmouth Medical School in the November 2006 medical journal Spine.
For the study, the researchers analyzed data on lower back (lumbar) surgery among Medicare recipients aged 65 and older nationwide, between 1992 and 2003, and found a dramatic increase in spine surgery during this time period.
The researchers found that surgery rates in 2002-2003 were almost 8 times higher than in 1992 in some areas of the US, and in 2003 Medicare spent over $1 billion on spine surgery.
Although the number of people with back problems does not differ that much in different parts of the country, high surgery rates were found in places like Casper, Wyoming, and Mason City, Iowa, and the lowest rate areas included Honolulu, the Bronx, New York, East Long Island, New York, and South Bend, Indiana.
According to the study, nearly five out of every 1,000 Medicare patients in some parts of the country underwent spinal surgery, compared to as low as 0.2 per every 1,000 in Bangor, Maine and 0.3 in Terre Haute, Indiana.
Johnson & Johnson's DePuy Spine Unit began marketing the Charite artificial spinal disc in the US in 2004. It was supposed to reduce the need for spinal fusion and other back surgeries. However, the Charite has now been linked to life threatening side effects leaving many surgeons reluctant to use the device.
Some surgeons say the artificial spine discs currently on the market are based on flawed science. Researchers at the University of California at Irvine say they believe the device makers have made a crucial mistake in designing the discs.
According to the doctors, the error stems from a lack of understanding of spinal biomechanics. A crucial miscalculation, they say, explains why the artificial discs have experienced repeated failures with serious consequences for many patients.
"They've based their center of rotation on a disc space that is in front of the spinal canal," says Dr Charles Rosen, a Cal-Irvine spine surgeon who has been critical of the Charite disc, in an interview with The Street.com on October 23, 2006.
"Our model," he explains, "which takes into account the complications that have occurred with these discs, suggests that the center of rotation is in the back of the spinal canal instead."
"So their design is wrong, period," he told Street.
According to Dr Rosen, the artificial discs disrupt the spine's normal function by creating an "artificial center of rotation" in a disc space that lies in front of the spinal canal, rather than behind it, which compromises the body in the process.
"You have a center of rotation that's normally there, and they falsely impose another," Dr Rosen told Street.
"You can't have two because they will neutralize each other," he explains. "Something has to give."
"To give, either the back part of the device breaks or the front part dislocates," he notes. "Then you have a failure."
Dr Rosen says he has seen the problem in the Charite and also in ProDiscs, a recently FDA approved disc now being marketed in the US by Swiss device maker Synthes.
According to Dr Rosen, many of the discs that do work, do so only after "auto-fusing" bones together, simulating fusion surgery and ruining the prospect of natural motion that makes the artificial discs so appealing in the first place, he told Street.
Indeed, in announcing the FDA approval of the Charite disc in a press release on October 26, 2004, the company did tout the Charite as "a high-tech device made of two metallic endplates and a movable high-density plastic center that, once implanted, is designed to help align the spine and preserve its ability to move."
"Spinal discs," the press release said, "maintain the position of the spine and allow for the flexibility to bend and twist."
"Lumbar spinal fusion surgery," J&J said, "is often effective in reducing pain, but limits range of motion and may transfer extra stress to discs above and below the fusion site."
"In clinical trials comparing artificial disc replacement to spinal fusion surgery," the company said, "patients maintained flexibility, experienced improvements in pain and function, left the hospital sooner and were more satisfied with the procedure."
It would certainly seem that Dr Rosen is correct when he says that if auto-fusing bones together is also needed in order for the Charite implant to be successful that it would negate the reason that people would be willing to pay for the expensive disc replacement surgery instead of the much cheaper spinal fusion surgery.
Critics point out that the cost of the disc and accompanying surgery can run as high as $50,000, while the cost of lumbar fusions surgery, on average, is less than half that amount at about $23,000.
If informed of the facts, people probably would not opt to have disc replacement especially when according to the J&J press release, "Complication rates for both groups of patients were similar."
Once implanted, the artificial discs are expected to last a life-time but experts say an analysis of several discs that were removed from patients showed wear similar to that found in artificial hips and knees that typically last up to 10 years. While this might be acceptable in older patients, they say, it is not acceptable for younger patients who would have to undergo life-threatening surgery to remove the disc once it wears out.
Since the Charite was approved for use in the US, more than 5,000 patients have received the implant, according to DePuy Spine's vice president, Bill Christianson, in USA Today on July 25, 2006.
However, as of the same month, July 2006, the FDA had received more than 130 reports of serious adverse events associated with the Chirate.
In addition, the Houston law firm of Pulaski and Middleman, leads a group of firms that represent over 350 patients who have been injured by the Charite. And according the Street.com on June 5, 2006, a Chicago law firm has more than 200 clients who have suffered complications from the disc and are seeking reparations.
Some experts are predicting that in the not too distant future the situation will get much worse and there will be a surge of patients who will experience complications which will be extremely problematic because the disc removal surgery can be more dangerous than the original implant procedure.
According to the Texas Back Institute’s Center for Spine Arthroplasty, in the standard artificial disc implantation procedure, two surgeons work together:
"A general surgeon approaches the spine through an incision in the abdomen and carefully moves blood vessels and internal organs out of the way to provide access to the spine. A spine surgeon then removes the damaged disc to create a space between two vertebrae for the implantation of the artificial disc, which is done using fluoroscopic guidance. Generally, the procedure takes about 60 to 90 minutes for a single level."
Although the disc implant surgery described above sounds simple enough, if problems develop, experts say, corrective procedures are far more complicated, if they can be done at all. According to Santos et al:
“Revisions surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge.
"Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures.”
Experts say that other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can also occur.
Many critics fault the FDA for approving the Charite in the first place. The original 2-year study submitted to the FDA in support of the application for approval, showed only that the disc worked no worse than one specific outdated type of spinal fusion surgery.
But even when compared to a procedure hardly used anymore, the study found that only 57% of Charite patients achieved "overall clinical success," compared with 47% in the spinal fusion patients, and more than 3 out of every 5 Charite patients, reported as successes, were still taking narcotic painkillers 2 years after the surgery, compared to 4 of 5 patients in the control group.
In addition, the study found Charite patients suffered more severe or life-threatening adverse events than patients in the spinal fusion group by a difference of 15% and 9%, according to an FDA review.
Amidst allegations that the expensive Charite disc replacement was being overly performed on Medicare patients with poor results, the government recently took measures to put a stop to that situation. On June 1, 2006, the Centers for Medicare & Medicaid Services finalized its national noncoverage decision regarding the Charite disc, banning reimbursement for the device among recipients over the age of 60.
"The Centers for Medicare & Medicaid Services has found that lumbar artificial disc replacement ... with the Charite lumbar artificial disc is not reasonable and necessary for the Medicare population over sixty years of age," the CMS decision said.
And just as expected, many private insurance companies have followed suit.
For senior citizens, the chances of receiving spine surgery, along with the serious complications that often follow, depends on where a patient lives, according to researchers from Dartmouth Medical School in the November 2006 medical journal Spine.
For the study, the researchers analyzed data on lower back (lumbar) surgery among Medicare recipients aged 65 and older nationwide, between 1992 and 2003, and found a dramatic increase in spine surgery during this time period.
The researchers found that surgery rates in 2002-2003 were almost 8 times higher than in 1992 in some areas of the US, and in 2003 Medicare spent over $1 billion on spine surgery.
Although the number of people with back problems does not differ that much in different parts of the country, high surgery rates were found in places like Casper, Wyoming, and Mason City, Iowa, and the lowest rate areas included Honolulu, the Bronx, New York, East Long Island, New York, and South Bend, Indiana.
According to the study, nearly five out of every 1,000 Medicare patients in some parts of the country underwent spinal surgery, compared to as low as 0.2 per every 1,000 in Bangor, Maine and 0.3 in Terre Haute, Indiana.
Johnson & Johnson's DePuy Spine Unit began marketing the Charite artificial spinal disc in the US in 2004. It was supposed to reduce the need for spinal fusion and other back surgeries. However, the Charite has now been linked to life threatening side effects leaving many surgeons reluctant to use the device.
Some surgeons say the artificial spine discs currently on the market are based on flawed science. Researchers at the University of California at Irvine say they believe the device makers have made a crucial mistake in designing the discs.
According to the doctors, the error stems from a lack of understanding of spinal biomechanics. A crucial miscalculation, they say, explains why the artificial discs have experienced repeated failures with serious consequences for many patients.
"They've based their center of rotation on a disc space that is in front of the spinal canal," says Dr Charles Rosen, a Cal-Irvine spine surgeon who has been critical of the Charite disc, in an interview with The Street.com on October 23, 2006.
"Our model," he explains, "which takes into account the complications that have occurred with these discs, suggests that the center of rotation is in the back of the spinal canal instead."
"So their design is wrong, period," he told Street.
According to Dr Rosen, the artificial discs disrupt the spine's normal function by creating an "artificial center of rotation" in a disc space that lies in front of the spinal canal, rather than behind it, which compromises the body in the process.
"You have a center of rotation that's normally there, and they falsely impose another," Dr Rosen told Street.
"You can't have two because they will neutralize each other," he explains. "Something has to give."
"To give, either the back part of the device breaks or the front part dislocates," he notes. "Then you have a failure."
Dr Rosen says he has seen the problem in the Charite and also in ProDiscs, a recently FDA approved disc now being marketed in the US by Swiss device maker Synthes.
According to Dr Rosen, many of the discs that do work, do so only after "auto-fusing" bones together, simulating fusion surgery and ruining the prospect of natural motion that makes the artificial discs so appealing in the first place, he told Street.
Indeed, in announcing the FDA approval of the Charite disc in a press release on October 26, 2004, the company did tout the Charite as "a high-tech device made of two metallic endplates and a movable high-density plastic center that, once implanted, is designed to help align the spine and preserve its ability to move."
"Spinal discs," the press release said, "maintain the position of the spine and allow for the flexibility to bend and twist."
"Lumbar spinal fusion surgery," J&J said, "is often effective in reducing pain, but limits range of motion and may transfer extra stress to discs above and below the fusion site."
"In clinical trials comparing artificial disc replacement to spinal fusion surgery," the company said, "patients maintained flexibility, experienced improvements in pain and function, left the hospital sooner and were more satisfied with the procedure."
It would certainly seem that Dr Rosen is correct when he says that if auto-fusing bones together is also needed in order for the Charite implant to be successful that it would negate the reason that people would be willing to pay for the expensive disc replacement surgery instead of the much cheaper spinal fusion surgery.
Critics point out that the cost of the disc and accompanying surgery can run as high as $50,000, while the cost of lumbar fusions surgery, on average, is less than half that amount at about $23,000.
If informed of the facts, people probably would not opt to have disc replacement especially when according to the J&J press release, "Complication rates for both groups of patients were similar."
Once implanted, the artificial discs are expected to last a life-time but experts say an analysis of several discs that were removed from patients showed wear similar to that found in artificial hips and knees that typically last up to 10 years. While this might be acceptable in older patients, they say, it is not acceptable for younger patients who would have to undergo life-threatening surgery to remove the disc once it wears out.
Since the Charite was approved for use in the US, more than 5,000 patients have received the implant, according to DePuy Spine's vice president, Bill Christianson, in USA Today on July 25, 2006.
However, as of the same month, July 2006, the FDA had received more than 130 reports of serious adverse events associated with the Chirate.
In addition, the Houston law firm of Pulaski and Middleman, leads a group of firms that represent over 350 patients who have been injured by the Charite. And according the Street.com on June 5, 2006, a Chicago law firm has more than 200 clients who have suffered complications from the disc and are seeking reparations.
Some experts are predicting that in the not too distant future the situation will get much worse and there will be a surge of patients who will experience complications which will be extremely problematic because the disc removal surgery can be more dangerous than the original implant procedure.
According to the Texas Back Institute’s Center for Spine Arthroplasty, in the standard artificial disc implantation procedure, two surgeons work together:
"A general surgeon approaches the spine through an incision in the abdomen and carefully moves blood vessels and internal organs out of the way to provide access to the spine. A spine surgeon then removes the damaged disc to create a space between two vertebrae for the implantation of the artificial disc, which is done using fluoroscopic guidance. Generally, the procedure takes about 60 to 90 minutes for a single level."
Although the disc implant surgery described above sounds simple enough, if problems develop, experts say, corrective procedures are far more complicated, if they can be done at all. According to Santos et al:
“Revisions surgery for a failed disc arthroplasty is life threatening. Dealing with the scarring around the great vessels is the main challenge.
"Indeed, the location of vital vascular structures may make it altogether impossible to perform such anterior abdominal exposures.”
Experts say that other postoperative difficulties such as infection, persistent pain, instability, and osteolysis can also occur.
Many critics fault the FDA for approving the Charite in the first place. The original 2-year study submitted to the FDA in support of the application for approval, showed only that the disc worked no worse than one specific outdated type of spinal fusion surgery.
But even when compared to a procedure hardly used anymore, the study found that only 57% of Charite patients achieved "overall clinical success," compared with 47% in the spinal fusion patients, and more than 3 out of every 5 Charite patients, reported as successes, were still taking narcotic painkillers 2 years after the surgery, compared to 4 of 5 patients in the control group.
In addition, the study found Charite patients suffered more severe or life-threatening adverse events than patients in the spinal fusion group by a difference of 15% and 9%, according to an FDA review.
Amidst allegations that the expensive Charite disc replacement was being overly performed on Medicare patients with poor results, the government recently took measures to put a stop to that situation. On June 1, 2006, the Centers for Medicare & Medicaid Services finalized its national noncoverage decision regarding the Charite disc, banning reimbursement for the device among recipients over the age of 60.
"The Centers for Medicare & Medicaid Services has found that lumbar artificial disc replacement ... with the Charite lumbar artificial disc is not reasonable and necessary for the Medicare population over sixty years of age," the CMS decision said.
And just as expected, many private insurance companies have followed suit.
Feds Investigate Profits From Off-Label Stent Procedures - Part II
Evelyn Pringle May 2007
In addition to the federal investigations into the off-label marketing of drug eluting stent by Boston Scientific and Johnson & Johnson, on May 10, 2007, Rep Maurice Hinchey (D-NY), who serves on the House Appropriations Subcommittee, announced the introduction of the FDA reform bill which addresses the issue of doctors using products for unapproved uses, which usually occurs without the patient's knowledge or consent.
If a doctor does not inform a patient that the FDA has not approved the use of a device or procedure, medical experts say, the patient cannot give meaningful consent because the potential problems that can result from the off-label use must be explained so that the patient can weigh the risks and benefits to determine whether to consent to the treatment.
Medical professionals point out that if a doctor wants to use a treatment that is not FDA approved because of a true belief that a certain patient would benefit from a specific treatment more than from others that are FDA approved, the doctor would not hesitate to explain the reasoning to the patient.
The FDA Improvement Act reform bill introduced by Rep Hinchey would require doctors to inform patients when a product is used off-label and also provide more resources to the FDA to go after companies that promote off-label use of their products despite the fact that doing so is illegal.
In recent months, lawmakers have made it clear that investigation of the stenting for profit industry is a top priority and will include not only the device makers, but also the doctors and medical facilities performing the procedures.
Being Congress oversees the spending by public programs like Medicare and Medicaid, lawmakers would have to be blind not to notice the obscene rise in profits. According to the May 17, 2007 Wall Street Journal, “Americans spent at least $14 billion on coronary-stent procedures last year, including surgical and hospital fees.”
Stenting doctors are very well paid. The median salary for invasive cardiologists who perform the procedures is roughly half-a-million dollars a year, says Darshak Sanghavi, a pediatric cardiologist and assistant professor of pediatrics at the University of Massachusetts Medical School, in Slate Magazine on May 8, 2007.
However, doctors and medical facilities may now be reevaluating the benefits of continued off-label stenting since law enforcement officials released information this month from an investigation by the FBI and the US Department of Health and Human Services of a cardiologist at a facility in Maryland that found 25 unnecessary stents implanted in patients in 2006 alone, with the majority billed to Medicare.
The bare-metal stenting procedure was originally marketed as a cheaper alternative to heart bypass surgery, but since the arrival of the DES, that claim is bogus. On February 25, 2007, the New York Times quoted the American College of Cardiology in reporting that the average cost of the DES procedure has risen to about $30,000, or almost equal to the price of open heart surgery for patients with multiple blockages.
The DES were promoted as being safer than bare-metal stents, but on March 8, 2007, the New England Journal of Medicine published an analysis of 4 studies that compared the DES and bare-metal stents with 4 years of follow-up, and found no significant differences in the rates of death, myocardial infarction, or stent thrombosis with the survival rate in the DES group at 93.3%, and 94.6% in the bare-metal group.
In December 2006, the FDA's Circulatory System Devices Advisory Committee held a hearing to review data on the outcome of DES stenting when they were implanted according to their label compared to when they were used off-label. Dr Ron Waksman, of the Washington Hospital Center, told the panel the rate of stent thrombosis almost doubled in patients with off-label use versus on-label use at 30 days and at 12 months.
He also said, "when we look at on-label and at off-label, the drug‑eluting stents are more thrombogenic than bare-metal stents."
With both on-label and off-label use, he informed the panel, over time, "late stent thrombosis is seen more in the DES versus the bare-metal stents."
Dr Waksman said that careful patient selection for DES is mandatory, and "off-label use should be reconsidered or restricted."
Diabetic patients with multi vessel disease should always be referred for bypass surgery, he added. DES should be contraindicated, he said, "for patients with poor compliance or allergic to Plavix or aspirin and need for upcoming surgery, and warning labeling should be considered for those when used off-label."
But experts point out that some studies have shown little benefit from taking the anti-clotting, blood-thinning drug Plavix to prevent stent-thrombosis. In October 2006, Dr Alaide Chieffo, made a presentation at a Transcatheter Cardiovascular Therapeutics meeting and reported a study of 3,021 DES patients that found 9 out of 16 patients who had developed late stent-thrombosis were being treated with Plavix at the time.
At the FDA meeting, Dr Peter Smith of Duke University discounted the claims that stenting is safer or as effective as bypass surgery and warned of the importance of weighing the risks and benefits to patients treated with the different procedures.
He stressed that since the introduction of DES, too many patients in need of bypass surgery are instead receiving off-label stenting procedures. "A current perspective," he said, "is that America's number one killer is predominantly treated with percutaneous methodology that has not been demonstrated to provide a survival advantage."
"And this is particularly important," he advised, "for the treatment of multi vessel coronary disease where substantial quality of life and survival benefits have been conclusively demonstrated for bypass grafting."
Dr Smith informed the panel of some of the outcomes reported in peer-reviewed published trials, the first a study of 14,000 patients, which demonstrated a significant survival advantage for bypass grafting compared to stenting in three vessel heart disease, he said.
The ROBUST New York State audited database, he reported, of 23,000 patients with three vessel disease published in the New England Journal of Medicine also showed a significant survival advantage for bypass grafting compared to stenting at 3 years.
Dr Smith explained that bypass grafting is more effective because it provides complete revascularization. While stenting treats the isolated blockage, grafting bypasses about two-thirds of the vessel where current and future blockage can occur.
In addition, he noted, bypass risks increase little with increasing coronary disease severity while risks with stenting appear to increase with each additional stent.
He also told the panel, "surprisingly, when we looked at the bare-metal stent era data, we saw point estimate trends favoring bypass grafting even for low and intermediate severity disease, and an extension of the significant advantage that bypass grafting provides compared to intervention for high severity coronary disease."
Dr Smith said the introduction of the DES led to a tripling of the use of stenting for high severity coronary disease. "And for the first time," he noted, "less than half the patients were initially offered coronary bypass grafting."
"How can this happen," he pointed out, "with the absolute survival advantage that I've shown you from these observational data on 40,000 patients showing that at 1 year, there's a 2.3 percent advantage, absolute advantage in bypass grafting versus stenting; 4.3 percent at 3 years; 5.1 percent at 5 years."
That means 1 out of every 20 patients, he said, who were treated with stenting would have survived if they had had bypass grafting. When you translate into real world application, assuming that drug‑eluting stents are equivalent to bare-metal stents for the mortality outcome, he advised, approximately 1.5 million drug‑eluting stents are implanted worldwide, 850,000 in the US.
Using data from the DEScover trial about stents per patient in the incidence of three vessel disease, he said, we estimate that 160,000 are with DES worldwide and 92,000 in the US.
Dr Smith informed the panel that this translates into a rate of premature death at 1 year to 3,800 patients worldwide, with 2,000 in the US, and 16,000 patients deaths at 3 years, with 9,000 in the US.
"Annualized," he said, "this is 6,500 worldwide, 3,600 in the U.S."
At the end of his presentation Dr Smith addressed previous claims made to the panel by the industry that off-label extension of DES was meeting "an unserved need."
"We're not certain whose unserved need that is," he said, "but we're fairly certain that it's not the need of our patients."
Another major selling point used by the stent makers has been to claim that bypass surgery is riskier. However, a study presented at the American Heart Association's Annual Conference in April 2007, determined that the DES procedure and surgery have about the same risk for a major cardiac event based on an analysis of 799 DES patients and 799 bypass patients for outcomes in the first 30 days and during the following 3 years.
Lead author, Dr Wilson, a program director at St. Luke's Episcopal Hospital and Texas Heart Institute, said in Science Daily on April 21, 2007, “We found that the likelihood of any complication in the hospital was the same whether you had a drug-eluting stent or bypass.”
“Five percent of drug-eluting stent patients,” he said, “had some major complication in the hospital, mostly heart attack, as opposed to about 3.8 percent of the patients who had bypass.” At 3 years, the study found, the death rate with bypass was 6.6% and 9% with drug-eluting stents.
The results of a study called COURAGE released in March 2007, may turn out to be the final nail in the coffin for Boston and J&J. The study involved over 2,000 patients who were treated for chronic, stable chest pain, and revealed that medication therapy alone reduced chest pain almost as well as when the drugs were combined with stenting.
Experts say the outcome is probably due to the fact that stenting only fixes one artery blockage at a time while drug treatment affects all arteries.
Many stable heart patients are conned into stenting because they believe that it will extend their lives and lower their risks for heart attack but according to the New York Times, the COURAGE study found that patients who received stents and drugs had the same life expectancy and same number of heart attacks as patients who received drugs only.
The study reported the rate of heart attack, stroke or death in patients who received stents was 20%, compared to 19.5% in patients who used drugs alone. At the end of 4.6 years, there were 211 deaths, or 19% among patients in the group who received stenting compared with to only 202 deaths, or 18.5% in the medication group.
"Our findings parallel those reported in recent trials," said William Boden, chief of cardiology at Buffalo General and Millard Fillmore Hospitals.
"In the aggregate,” he told United Press International on March 26, 2007, “these studies ... show that percutaneous coronary intervention -- angioplasty plus stenting -- has no effect in reducing major cardiovascular events."
"There are hundreds of thousands of Americans who are currently getting stents placed who do not need it as initial therapy," said Dr Raymond Gibbons, professor of medicine at the Mayo Medical School and president of the American Heart Association, to UPI.
In response to the study, on the March 28, 2007, WSJ Health Blog, Dr Andy Demajio wrote, "It has been distressing to see how interventional cardiologists have been happily stenting their patients to fatten their wallets."
"This immoral practice should come to a stop," he wrote. "My hope is that the COURAGE data may help payers take action against these doctors."
It appears that doctors and hospital administrators are thinking twice about off-label DES stenting. On May 17, the Wall Street Journal reported that April marked the 10th consecutive month of share decline for DES, quoting the Millennium Research Group, a firm that surveys about 140 US hospitals, that put the percentage of stentings with a coated stent at 69.7%, down from almost 90% last in June 2006.
Until April doctors had largely replaced the more-expensive DES with older, bare-metal stents, the Journal said. “The new data,” it notes, “indicate that doctors and patients may be skipping stentings completely in favor of drug treatment.”
It sure looks that way according to Boston's first quarter SEC filing, that reported worldwide sales of its DES had dropped to $468 million in the first quarter of 2007, down from $633 million during the first quarter of 2006.
The SEC filing also shows that J&J has plenty of other problems. For instance, the company is currently facing over 75 class action lawsuits and 1,100 individual lawsuits related to potentially defective defibrillators and pacemakers manufactured by Guidant, a company Boston acquired in April 2006.
J&J future isn't looking too rosy either. Sales of the Cypher stent are down by more than 25%, according to the firm's first quarter SEC filing and in addition to DES, J&J is currently under federal investigation over the marketing practices for several other products including the antipsychotic Risperdal, the anti-seizure medication Topamax, the heart-failure drug Natrecor, and paying kickbacks to doctors for using the firm’s orthopedic devices.
In March 2007, J&J received new subpoenas from US attorneys in Philadelphia, Boston and San Francisco pertaining to the investigations of the 3 drugs seeking information about corporate supervision and oversight of the subsidiaries that market the drugs including Janssen, Ortho-McNeil and Scios.
In addition, according to SEC filings, as of December 31, 2006, 100 lawsuits were pending against J&J related to the Charite artificial spinal disc, basically alleging that the company knew the disc was defective and boosted profits by marketing the device for off-label uses.
On May 10, 2007, the Wall Street Journal reported the filing of a lawsuit against J&J by two former salesmen with documents showing how the company “sought to boost sales of its blockbuster anti-anemia drug Procrit by offering contracts that fattened doctors' profits and urging its salespeople to push higher-than-approved doses.”
This bit of news came shortly after federal lawmakers ordered J&J to cease all direct-to-consumer advertising and physician incentives for Procrit until the FDA could determine whether steps needed to be taken to protect the public following investigations that revealed the rampant off-label sale of the anemia drug was causing serious injuries and death among kidney and cancer patients.
Unfortunately, there is no way to medically reverse the stenting procedure and therefore, the millions of unsuspecting patients who received the DES face a life-time of every day worry because a blot clot lodged in a stent can cause a stroke or heart attack without any warning.
Legal experts are predicting that Boston and J&J will be swamped with lawsuits over the off-label marketing of DES, but say the defendants listed in the complaints will likely include the names of doctors and medical facilities that helped the device makers turn the stenting industry into a billion dollar baby.
In addition to the federal investigations into the off-label marketing of drug eluting stent by Boston Scientific and Johnson & Johnson, on May 10, 2007, Rep Maurice Hinchey (D-NY), who serves on the House Appropriations Subcommittee, announced the introduction of the FDA reform bill which addresses the issue of doctors using products for unapproved uses, which usually occurs without the patient's knowledge or consent.
If a doctor does not inform a patient that the FDA has not approved the use of a device or procedure, medical experts say, the patient cannot give meaningful consent because the potential problems that can result from the off-label use must be explained so that the patient can weigh the risks and benefits to determine whether to consent to the treatment.
Medical professionals point out that if a doctor wants to use a treatment that is not FDA approved because of a true belief that a certain patient would benefit from a specific treatment more than from others that are FDA approved, the doctor would not hesitate to explain the reasoning to the patient.
The FDA Improvement Act reform bill introduced by Rep Hinchey would require doctors to inform patients when a product is used off-label and also provide more resources to the FDA to go after companies that promote off-label use of their products despite the fact that doing so is illegal.
In recent months, lawmakers have made it clear that investigation of the stenting for profit industry is a top priority and will include not only the device makers, but also the doctors and medical facilities performing the procedures.
Being Congress oversees the spending by public programs like Medicare and Medicaid, lawmakers would have to be blind not to notice the obscene rise in profits. According to the May 17, 2007 Wall Street Journal, “Americans spent at least $14 billion on coronary-stent procedures last year, including surgical and hospital fees.”
Stenting doctors are very well paid. The median salary for invasive cardiologists who perform the procedures is roughly half-a-million dollars a year, says Darshak Sanghavi, a pediatric cardiologist and assistant professor of pediatrics at the University of Massachusetts Medical School, in Slate Magazine on May 8, 2007.
However, doctors and medical facilities may now be reevaluating the benefits of continued off-label stenting since law enforcement officials released information this month from an investigation by the FBI and the US Department of Health and Human Services of a cardiologist at a facility in Maryland that found 25 unnecessary stents implanted in patients in 2006 alone, with the majority billed to Medicare.
The bare-metal stenting procedure was originally marketed as a cheaper alternative to heart bypass surgery, but since the arrival of the DES, that claim is bogus. On February 25, 2007, the New York Times quoted the American College of Cardiology in reporting that the average cost of the DES procedure has risen to about $30,000, or almost equal to the price of open heart surgery for patients with multiple blockages.
The DES were promoted as being safer than bare-metal stents, but on March 8, 2007, the New England Journal of Medicine published an analysis of 4 studies that compared the DES and bare-metal stents with 4 years of follow-up, and found no significant differences in the rates of death, myocardial infarction, or stent thrombosis with the survival rate in the DES group at 93.3%, and 94.6% in the bare-metal group.
In December 2006, the FDA's Circulatory System Devices Advisory Committee held a hearing to review data on the outcome of DES stenting when they were implanted according to their label compared to when they were used off-label. Dr Ron Waksman, of the Washington Hospital Center, told the panel the rate of stent thrombosis almost doubled in patients with off-label use versus on-label use at 30 days and at 12 months.
He also said, "when we look at on-label and at off-label, the drug‑eluting stents are more thrombogenic than bare-metal stents."
With both on-label and off-label use, he informed the panel, over time, "late stent thrombosis is seen more in the DES versus the bare-metal stents."
Dr Waksman said that careful patient selection for DES is mandatory, and "off-label use should be reconsidered or restricted."
Diabetic patients with multi vessel disease should always be referred for bypass surgery, he added. DES should be contraindicated, he said, "for patients with poor compliance or allergic to Plavix or aspirin and need for upcoming surgery, and warning labeling should be considered for those when used off-label."
But experts point out that some studies have shown little benefit from taking the anti-clotting, blood-thinning drug Plavix to prevent stent-thrombosis. In October 2006, Dr Alaide Chieffo, made a presentation at a Transcatheter Cardiovascular Therapeutics meeting and reported a study of 3,021 DES patients that found 9 out of 16 patients who had developed late stent-thrombosis were being treated with Plavix at the time.
At the FDA meeting, Dr Peter Smith of Duke University discounted the claims that stenting is safer or as effective as bypass surgery and warned of the importance of weighing the risks and benefits to patients treated with the different procedures.
He stressed that since the introduction of DES, too many patients in need of bypass surgery are instead receiving off-label stenting procedures. "A current perspective," he said, "is that America's number one killer is predominantly treated with percutaneous methodology that has not been demonstrated to provide a survival advantage."
"And this is particularly important," he advised, "for the treatment of multi vessel coronary disease where substantial quality of life and survival benefits have been conclusively demonstrated for bypass grafting."
Dr Smith informed the panel of some of the outcomes reported in peer-reviewed published trials, the first a study of 14,000 patients, which demonstrated a significant survival advantage for bypass grafting compared to stenting in three vessel heart disease, he said.
The ROBUST New York State audited database, he reported, of 23,000 patients with three vessel disease published in the New England Journal of Medicine also showed a significant survival advantage for bypass grafting compared to stenting at 3 years.
Dr Smith explained that bypass grafting is more effective because it provides complete revascularization. While stenting treats the isolated blockage, grafting bypasses about two-thirds of the vessel where current and future blockage can occur.
In addition, he noted, bypass risks increase little with increasing coronary disease severity while risks with stenting appear to increase with each additional stent.
He also told the panel, "surprisingly, when we looked at the bare-metal stent era data, we saw point estimate trends favoring bypass grafting even for low and intermediate severity disease, and an extension of the significant advantage that bypass grafting provides compared to intervention for high severity coronary disease."
Dr Smith said the introduction of the DES led to a tripling of the use of stenting for high severity coronary disease. "And for the first time," he noted, "less than half the patients were initially offered coronary bypass grafting."
"How can this happen," he pointed out, "with the absolute survival advantage that I've shown you from these observational data on 40,000 patients showing that at 1 year, there's a 2.3 percent advantage, absolute advantage in bypass grafting versus stenting; 4.3 percent at 3 years; 5.1 percent at 5 years."
That means 1 out of every 20 patients, he said, who were treated with stenting would have survived if they had had bypass grafting. When you translate into real world application, assuming that drug‑eluting stents are equivalent to bare-metal stents for the mortality outcome, he advised, approximately 1.5 million drug‑eluting stents are implanted worldwide, 850,000 in the US.
Using data from the DEScover trial about stents per patient in the incidence of three vessel disease, he said, we estimate that 160,000 are with DES worldwide and 92,000 in the US.
Dr Smith informed the panel that this translates into a rate of premature death at 1 year to 3,800 patients worldwide, with 2,000 in the US, and 16,000 patients deaths at 3 years, with 9,000 in the US.
"Annualized," he said, "this is 6,500 worldwide, 3,600 in the U.S."
At the end of his presentation Dr Smith addressed previous claims made to the panel by the industry that off-label extension of DES was meeting "an unserved need."
"We're not certain whose unserved need that is," he said, "but we're fairly certain that it's not the need of our patients."
Another major selling point used by the stent makers has been to claim that bypass surgery is riskier. However, a study presented at the American Heart Association's Annual Conference in April 2007, determined that the DES procedure and surgery have about the same risk for a major cardiac event based on an analysis of 799 DES patients and 799 bypass patients for outcomes in the first 30 days and during the following 3 years.
Lead author, Dr Wilson, a program director at St. Luke's Episcopal Hospital and Texas Heart Institute, said in Science Daily on April 21, 2007, “We found that the likelihood of any complication in the hospital was the same whether you had a drug-eluting stent or bypass.”
“Five percent of drug-eluting stent patients,” he said, “had some major complication in the hospital, mostly heart attack, as opposed to about 3.8 percent of the patients who had bypass.” At 3 years, the study found, the death rate with bypass was 6.6% and 9% with drug-eluting stents.
The results of a study called COURAGE released in March 2007, may turn out to be the final nail in the coffin for Boston and J&J. The study involved over 2,000 patients who were treated for chronic, stable chest pain, and revealed that medication therapy alone reduced chest pain almost as well as when the drugs were combined with stenting.
Experts say the outcome is probably due to the fact that stenting only fixes one artery blockage at a time while drug treatment affects all arteries.
Many stable heart patients are conned into stenting because they believe that it will extend their lives and lower their risks for heart attack but according to the New York Times, the COURAGE study found that patients who received stents and drugs had the same life expectancy and same number of heart attacks as patients who received drugs only.
The study reported the rate of heart attack, stroke or death in patients who received stents was 20%, compared to 19.5% in patients who used drugs alone. At the end of 4.6 years, there were 211 deaths, or 19% among patients in the group who received stenting compared with to only 202 deaths, or 18.5% in the medication group.
"Our findings parallel those reported in recent trials," said William Boden, chief of cardiology at Buffalo General and Millard Fillmore Hospitals.
"In the aggregate,” he told United Press International on March 26, 2007, “these studies ... show that percutaneous coronary intervention -- angioplasty plus stenting -- has no effect in reducing major cardiovascular events."
"There are hundreds of thousands of Americans who are currently getting stents placed who do not need it as initial therapy," said Dr Raymond Gibbons, professor of medicine at the Mayo Medical School and president of the American Heart Association, to UPI.
In response to the study, on the March 28, 2007, WSJ Health Blog, Dr Andy Demajio wrote, "It has been distressing to see how interventional cardiologists have been happily stenting their patients to fatten their wallets."
"This immoral practice should come to a stop," he wrote. "My hope is that the COURAGE data may help payers take action against these doctors."
It appears that doctors and hospital administrators are thinking twice about off-label DES stenting. On May 17, the Wall Street Journal reported that April marked the 10th consecutive month of share decline for DES, quoting the Millennium Research Group, a firm that surveys about 140 US hospitals, that put the percentage of stentings with a coated stent at 69.7%, down from almost 90% last in June 2006.
Until April doctors had largely replaced the more-expensive DES with older, bare-metal stents, the Journal said. “The new data,” it notes, “indicate that doctors and patients may be skipping stentings completely in favor of drug treatment.”
It sure looks that way according to Boston's first quarter SEC filing, that reported worldwide sales of its DES had dropped to $468 million in the first quarter of 2007, down from $633 million during the first quarter of 2006.
The SEC filing also shows that J&J has plenty of other problems. For instance, the company is currently facing over 75 class action lawsuits and 1,100 individual lawsuits related to potentially defective defibrillators and pacemakers manufactured by Guidant, a company Boston acquired in April 2006.
J&J future isn't looking too rosy either. Sales of the Cypher stent are down by more than 25%, according to the firm's first quarter SEC filing and in addition to DES, J&J is currently under federal investigation over the marketing practices for several other products including the antipsychotic Risperdal, the anti-seizure medication Topamax, the heart-failure drug Natrecor, and paying kickbacks to doctors for using the firm’s orthopedic devices.
In March 2007, J&J received new subpoenas from US attorneys in Philadelphia, Boston and San Francisco pertaining to the investigations of the 3 drugs seeking information about corporate supervision and oversight of the subsidiaries that market the drugs including Janssen, Ortho-McNeil and Scios.
In addition, according to SEC filings, as of December 31, 2006, 100 lawsuits were pending against J&J related to the Charite artificial spinal disc, basically alleging that the company knew the disc was defective and boosted profits by marketing the device for off-label uses.
On May 10, 2007, the Wall Street Journal reported the filing of a lawsuit against J&J by two former salesmen with documents showing how the company “sought to boost sales of its blockbuster anti-anemia drug Procrit by offering contracts that fattened doctors' profits and urging its salespeople to push higher-than-approved doses.”
This bit of news came shortly after federal lawmakers ordered J&J to cease all direct-to-consumer advertising and physician incentives for Procrit until the FDA could determine whether steps needed to be taken to protect the public following investigations that revealed the rampant off-label sale of the anemia drug was causing serious injuries and death among kidney and cancer patients.
Unfortunately, there is no way to medically reverse the stenting procedure and therefore, the millions of unsuspecting patients who received the DES face a life-time of every day worry because a blot clot lodged in a stent can cause a stroke or heart attack without any warning.
Legal experts are predicting that Boston and J&J will be swamped with lawsuits over the off-label marketing of DES, but say the defendants listed in the complaints will likely include the names of doctors and medical facilities that helped the device makers turn the stenting industry into a billion dollar baby.
Saturday, July 31, 2010
Implant For-Profit Industry Not Deserving of Preemption Protection - Part I
Evelyn Pringle July 9, 2007
In addition to the question of how many soldiers will be dead or injured by the time self-proclaimed "war President" George Bush leaves office, Americans need to ask themselves how many citizens will be dead or injured as a result of an FDA controlled by the industry most credited with funding his move to the White House.
Last year, the FDA announced that the agency's approval of a pharmaceutical product preempts product liability lawsuits against the industry giants in state courts, even when a company actively conceals information that shows serious injury and death are known to be associated with a product.
With the solid backing of the FDA, preemption is now being used as an argument to dismiss lawsuits filed by injured citizens in state courts against medical device makers.
Critics point out that many risks associated with a new product will not be known at the time of FDA approval and that additional safety information often surfaces only after a device is widely used on the market.
Furthermore, FDA regulations allow device makers to add stronger warnings when a risk becomes known, without requiring FDA approval. However, all too often, company documents which surface as a result of litigation show that the device maker was aware of safety risks long before the product was approved and that they actively concealed the information from the FDA.
Legal experts say the legal remedies available under state laws are set up to give additional protection to consumers over and above the minimal protection provided by the FDA approval process, and especially at times like this, when the FDA is run by appointed industry insiders who refuse to police the medical device industry.
The Medical Device Amendments to the Federal Food, Drug and Cosmetic Act establish a federal statutory and regulatory scheme governing the sale of devices in the U.S., but the MDA provides no private cause of action against device makers and therefore, the preemption of state law claims would eliminate most, if not all, legal remedies for persons injured by defective products.
Whether or not the administration has succeeded in immunizing device makers will likely be known in 2008, because on June 25, 2007, the U.S. Supreme Court agreed to hear an appeal in Riegel v Medtronic, involving a case against Medtronic which could determine whether patients will have the right to file lawsuits against device makers under consumer protection laws enacted by the individual states.
The Public Citizen Litigation Group is representing Charles Reigel, who was injured in 1996 when a balloon catheter burst while he was undergoing an angioplasty, a procedure used to open clogged arteries.
After the Second Circuit Court found the lawsuit was preempted based on FDA approval, Public Citizen attorneys Allison Zieve, Wayne Smith and Brian Wolfman, filed a petition asking the Supreme Court to consider whether the Food, Drug, and Cosmetic Act expressly preempts state-law actions brought by patients who have been injured by devices that received pre-market approval, and to issue a ruling due to the inconsistent rulings on the preemption issue in cases filed in the lower courts.
The petition argues that the FDA has switched positions on whether pre-market approval preempts state law claims since the government's views were solicited by the Court in 1997, when the FDA supported the right to pursue state law claims.
The Supreme Court asked the Solicitor General to offer the government's views and, of course, the FDA used tax dollars collected in large part from the injured plaintiffs who might have cause to file claims in state courts, to send up a brief that backed Medtronic 1000% in it use of preemption to prevent Americans from suing the device giant.
In direct harmony with Medtronic, the FDA brief tells the Court not to bother with the conflict in preemption rulings in the lower courts because there are now more rulings on one side of issue than the other.
"Also like Medtronic," Public Citizen responds in a reply brief, "the government asks the Court to overlook the undisputed conflict because it might simply go away."
"What has changed since 1997," Public Citizen notes, "is the government's view on the merits of the question presented."
"The government's inconsistency on this question of statutory meaning only underscores the need for this Court to resolve the question presented," the brief states.
Legal experts say the ruling in this case has the potential to affect thousands upon thousands of lawsuits currently filed in state courts against the makers of medical devices, including defective products implanted in patients with heart disease, such as defibrillators, pacemakers and drug-eluding stents, and devices used during spinal surgery.
A favorable ruling for Medtronic could literally save Boston Scientific from the poor house because, at last count, the company was facing over 75 class actions and 1,100 individual lawsuits involving defective defibrillators and pacemakers manufactured by the recently-acquired Guidant Corp, according to Boston's SEC filing.
Also, the number of litigants against Boston is rising by the month. On June 15, 2007, the Brown & Crouppen law firm of St Louis filed a 39-count product liability lawsuit in St Clair County on behalf of 14 plaintiffs against Guidant, Boston and Cardiac Pacemakers, alleging the defibrillators/pacemakers were defective and required them to be hospitalized.
These latest lawsuits claim the devices were defective in design, did not conform to federal requirements and subjected users to risks of heart attacks, death and other illnesses that exceeded the benefits of the devices. Other safer products were available, and the makers actively concealed the product defects in order to prevent adverse publicity.
According to the June 29, 2007, Madison St Clair Record, this is at least the third complaint filed by Brown & Crouppen against these same companies.
Spinal surgery represents another division of the implant for-profit industry. A study in the November 2006 Spine journal, conducted at Dartmouth Medical School, analyzed data on lower back (lumbar) surgery among Medicare recipients aged 65 and older nationwide and found that surgery rates in 2002-2003 were almost 8 times higher than in 1992 in some areas of the U.S., and in 2003, Medicare spent over $1 billion on spine surgery.
On August 5, 2006, the LA Times reported that spinal surgery has become a very lucrative business, "with at least $3.2 billion spent last year in the U.S. on spinal fusion."
In October 2004, Johnson & Johnson obtained FDA approval for the Charite artificial spinal disc as an alternative to spinal fusion surgery, but experts contend that the superiority of the two procedures is limited to the cost. Charite replacement can run as high as $50,000, while spinal fusion surgery costs less than half that, at roughly $23,000.
A favorable ruling on preemption would be great news for Johnson & Johnson, considering that SEC filings reveal that there were 100 lawsuits pending against the company at the end of 2006 related to the Charite artificial spinal disc, alleging that the company knew the disc was defective and boosted profits by implanting the device for uses not approved by the FDA and in patients who would not benefit from the device.
Between the time the disc was approved in October 2004 and July 2006, the FDA had already received over 130 reports of serious adverse events in patients implanted with the device and, in most cases, the disc was implanted in patients who did not meet the criteria for disc replacement as specified by the FDA.
Although a favorable Supreme Court ruling would be beneficial to the device makers in dealing with lawsuits filed by private plaintiffs in state courts, it will do nothing to stop the on-going investigations into the marketing of devices to determine whether device makers are funneling money to doctors and hospitals to increase the use of their products.
Anti-kickback statutes make it illegal for doctors or medical facilities to receive financial incentives to increase the use of devices, which in turn increase the number of implant procedures, in patients covered by public health care programs.
In the end, it was the greed, evidenced by drastic rise in the use of not only defibrillators and pacemakers, but all medical devices with Medicare patients over the past few years that drew the attention of lawmakers and law enforcement officials to the implant for profit industry.
On September 26, 2006, the New York Times reported that overall, Medicare payments to hospitals for implant procedures grew from $10 billion to $14 billion, an increase of about 40%, in just 2 years.
As of today, every major device maker is under investigation for working with doctors and hospitals to increase profits by billing public health care programs for implant procedures performed on patients who, in many cases, did not need the devices.
The FBI, the U.S. Department of Justice and the Department of Health and Human Services have set up a Medicare Fraud Strike Force, and the Strike Force is predicting that as much as $2.5 billion can be saved by cracking down on the device makers, doctors and hospitals involved in the implant industry.
The investigations of J&J and its DePuy Division are not limited to the Charite disc. In June 2006, the company was served a subpoena by the Antitrust Division of the DOJ, requesting documents related to the manufacture and sale of the company's orthopedic devices, and search warrants were executed in connection with the investigation, according to documents filed by J&J with the SEC on August 8, 2006.
SEC filings also show that Medtronic is responding to a subpoena from the Office of the U.S. Attorney for the District of Massachusetts, issued under the Health Insurance Portability & Accountability Act of 1996, requesting documents relating to pacemakers and defibrillators; monitoring equipment and services; benefits to persons in a position to recommend purchases of such devices; and the company's training and compliance materials relating to the fraud and abuse and federal Anti-Kickback statutes.
Investigations are also underway into over-use of the new drug-eluting stents (DES), marketed by Boston and Johnson & Johnson, with the average cost to Medicare ranging from $11,184 to $14,287, according to the Centers for Medicare and Medicaid Services.
The first DES was approved in 2003, and on December 4, 2006, Bloomberg reported that, in 2005, the new stents accounted for 43% of total sales for Boston and 52% for Johnson & Johnson. By the end of 2006, the new stent was a top-selling device for Boston, bringing in about $2 billion.
On March 1, 2007, the House Oversight and Government Reform Committee, which conducts oversight of Medicare spending, ordered Johnson & Johnson and Boston to turn over documents, related the marketing of drug-eluting stents.
In May 2007, the Strike Force reported that one Maryland cardiologist had implanted 25 unnecessary stents in 2006, with most patients covered by Medicare.
The salary for the cardiologists who benefit from stent procedures is roughly half-a-million dollars a year, according to an article in Slate Magazine on May 8, 2007.
Legal analysts are predicting that the lawsuits filed by patients injured as a result of the massive over-use of medical devices will involve all the co-conspirators in the medical profession who helped turn the implant business into a billion-dollar industry overnight.
In addition to the question of how many soldiers will be dead or injured by the time self-proclaimed "war President" George Bush leaves office, Americans need to ask themselves how many citizens will be dead or injured as a result of an FDA controlled by the industry most credited with funding his move to the White House.
Last year, the FDA announced that the agency's approval of a pharmaceutical product preempts product liability lawsuits against the industry giants in state courts, even when a company actively conceals information that shows serious injury and death are known to be associated with a product.
With the solid backing of the FDA, preemption is now being used as an argument to dismiss lawsuits filed by injured citizens in state courts against medical device makers.
Critics point out that many risks associated with a new product will not be known at the time of FDA approval and that additional safety information often surfaces only after a device is widely used on the market.
Furthermore, FDA regulations allow device makers to add stronger warnings when a risk becomes known, without requiring FDA approval. However, all too often, company documents which surface as a result of litigation show that the device maker was aware of safety risks long before the product was approved and that they actively concealed the information from the FDA.
Legal experts say the legal remedies available under state laws are set up to give additional protection to consumers over and above the minimal protection provided by the FDA approval process, and especially at times like this, when the FDA is run by appointed industry insiders who refuse to police the medical device industry.
The Medical Device Amendments to the Federal Food, Drug and Cosmetic Act establish a federal statutory and regulatory scheme governing the sale of devices in the U.S., but the MDA provides no private cause of action against device makers and therefore, the preemption of state law claims would eliminate most, if not all, legal remedies for persons injured by defective products.
Whether or not the administration has succeeded in immunizing device makers will likely be known in 2008, because on June 25, 2007, the U.S. Supreme Court agreed to hear an appeal in Riegel v Medtronic, involving a case against Medtronic which could determine whether patients will have the right to file lawsuits against device makers under consumer protection laws enacted by the individual states.
The Public Citizen Litigation Group is representing Charles Reigel, who was injured in 1996 when a balloon catheter burst while he was undergoing an angioplasty, a procedure used to open clogged arteries.
After the Second Circuit Court found the lawsuit was preempted based on FDA approval, Public Citizen attorneys Allison Zieve, Wayne Smith and Brian Wolfman, filed a petition asking the Supreme Court to consider whether the Food, Drug, and Cosmetic Act expressly preempts state-law actions brought by patients who have been injured by devices that received pre-market approval, and to issue a ruling due to the inconsistent rulings on the preemption issue in cases filed in the lower courts.
The petition argues that the FDA has switched positions on whether pre-market approval preempts state law claims since the government's views were solicited by the Court in 1997, when the FDA supported the right to pursue state law claims.
The Supreme Court asked the Solicitor General to offer the government's views and, of course, the FDA used tax dollars collected in large part from the injured plaintiffs who might have cause to file claims in state courts, to send up a brief that backed Medtronic 1000% in it use of preemption to prevent Americans from suing the device giant.
In direct harmony with Medtronic, the FDA brief tells the Court not to bother with the conflict in preemption rulings in the lower courts because there are now more rulings on one side of issue than the other.
"Also like Medtronic," Public Citizen responds in a reply brief, "the government asks the Court to overlook the undisputed conflict because it might simply go away."
"What has changed since 1997," Public Citizen notes, "is the government's view on the merits of the question presented."
"The government's inconsistency on this question of statutory meaning only underscores the need for this Court to resolve the question presented," the brief states.
Legal experts say the ruling in this case has the potential to affect thousands upon thousands of lawsuits currently filed in state courts against the makers of medical devices, including defective products implanted in patients with heart disease, such as defibrillators, pacemakers and drug-eluding stents, and devices used during spinal surgery.
A favorable ruling for Medtronic could literally save Boston Scientific from the poor house because, at last count, the company was facing over 75 class actions and 1,100 individual lawsuits involving defective defibrillators and pacemakers manufactured by the recently-acquired Guidant Corp, according to Boston's SEC filing.
Also, the number of litigants against Boston is rising by the month. On June 15, 2007, the Brown & Crouppen law firm of St Louis filed a 39-count product liability lawsuit in St Clair County on behalf of 14 plaintiffs against Guidant, Boston and Cardiac Pacemakers, alleging the defibrillators/pacemakers were defective and required them to be hospitalized.
These latest lawsuits claim the devices were defective in design, did not conform to federal requirements and subjected users to risks of heart attacks, death and other illnesses that exceeded the benefits of the devices. Other safer products were available, and the makers actively concealed the product defects in order to prevent adverse publicity.
According to the June 29, 2007, Madison St Clair Record, this is at least the third complaint filed by Brown & Crouppen against these same companies.
Spinal surgery represents another division of the implant for-profit industry. A study in the November 2006 Spine journal, conducted at Dartmouth Medical School, analyzed data on lower back (lumbar) surgery among Medicare recipients aged 65 and older nationwide and found that surgery rates in 2002-2003 were almost 8 times higher than in 1992 in some areas of the U.S., and in 2003, Medicare spent over $1 billion on spine surgery.
On August 5, 2006, the LA Times reported that spinal surgery has become a very lucrative business, "with at least $3.2 billion spent last year in the U.S. on spinal fusion."
In October 2004, Johnson & Johnson obtained FDA approval for the Charite artificial spinal disc as an alternative to spinal fusion surgery, but experts contend that the superiority of the two procedures is limited to the cost. Charite replacement can run as high as $50,000, while spinal fusion surgery costs less than half that, at roughly $23,000.
A favorable ruling on preemption would be great news for Johnson & Johnson, considering that SEC filings reveal that there were 100 lawsuits pending against the company at the end of 2006 related to the Charite artificial spinal disc, alleging that the company knew the disc was defective and boosted profits by implanting the device for uses not approved by the FDA and in patients who would not benefit from the device.
Between the time the disc was approved in October 2004 and July 2006, the FDA had already received over 130 reports of serious adverse events in patients implanted with the device and, in most cases, the disc was implanted in patients who did not meet the criteria for disc replacement as specified by the FDA.
Although a favorable Supreme Court ruling would be beneficial to the device makers in dealing with lawsuits filed by private plaintiffs in state courts, it will do nothing to stop the on-going investigations into the marketing of devices to determine whether device makers are funneling money to doctors and hospitals to increase the use of their products.
Anti-kickback statutes make it illegal for doctors or medical facilities to receive financial incentives to increase the use of devices, which in turn increase the number of implant procedures, in patients covered by public health care programs.
In the end, it was the greed, evidenced by drastic rise in the use of not only defibrillators and pacemakers, but all medical devices with Medicare patients over the past few years that drew the attention of lawmakers and law enforcement officials to the implant for profit industry.
On September 26, 2006, the New York Times reported that overall, Medicare payments to hospitals for implant procedures grew from $10 billion to $14 billion, an increase of about 40%, in just 2 years.
As of today, every major device maker is under investigation for working with doctors and hospitals to increase profits by billing public health care programs for implant procedures performed on patients who, in many cases, did not need the devices.
The FBI, the U.S. Department of Justice and the Department of Health and Human Services have set up a Medicare Fraud Strike Force, and the Strike Force is predicting that as much as $2.5 billion can be saved by cracking down on the device makers, doctors and hospitals involved in the implant industry.
The investigations of J&J and its DePuy Division are not limited to the Charite disc. In June 2006, the company was served a subpoena by the Antitrust Division of the DOJ, requesting documents related to the manufacture and sale of the company's orthopedic devices, and search warrants were executed in connection with the investigation, according to documents filed by J&J with the SEC on August 8, 2006.
SEC filings also show that Medtronic is responding to a subpoena from the Office of the U.S. Attorney for the District of Massachusetts, issued under the Health Insurance Portability & Accountability Act of 1996, requesting documents relating to pacemakers and defibrillators; monitoring equipment and services; benefits to persons in a position to recommend purchases of such devices; and the company's training and compliance materials relating to the fraud and abuse and federal Anti-Kickback statutes.
Investigations are also underway into over-use of the new drug-eluting stents (DES), marketed by Boston and Johnson & Johnson, with the average cost to Medicare ranging from $11,184 to $14,287, according to the Centers for Medicare and Medicaid Services.
The first DES was approved in 2003, and on December 4, 2006, Bloomberg reported that, in 2005, the new stents accounted for 43% of total sales for Boston and 52% for Johnson & Johnson. By the end of 2006, the new stent was a top-selling device for Boston, bringing in about $2 billion.
On March 1, 2007, the House Oversight and Government Reform Committee, which conducts oversight of Medicare spending, ordered Johnson & Johnson and Boston to turn over documents, related the marketing of drug-eluting stents.
In May 2007, the Strike Force reported that one Maryland cardiologist had implanted 25 unnecessary stents in 2006, with most patients covered by Medicare.
The salary for the cardiologists who benefit from stent procedures is roughly half-a-million dollars a year, according to an article in Slate Magazine on May 8, 2007.
Legal analysts are predicting that the lawsuits filed by patients injured as a result of the massive over-use of medical devices will involve all the co-conspirators in the medical profession who helped turn the implant business into a billion-dollar industry overnight.
Friday, July 30, 2010
J&J Charite Spinal Disc Bonanza Short Lived
Evelyn Pringle March 10, 2007
The Charite artificial spinal disc was FDA approved in October 2004, as an alternative to spinal fusion surgery. But in reality, experts say, the superiority of the two procedures is limited to the cost. Charite disc replacement can run as high as $50,000, while spinal fusion surgery costs less than half that at roughly $23,000.
The Charite is marketed by the DePuy Spine division of Johnson & Johnson and is approved for spinal arthroplasty in patients with degenerative disc disease at one level of the spine, defined by the FDA as discogenic back pain with degeneration of the disc confirmed by patient history and radiographic studies.
According to the FDA, patients should have failed at least 6 months of conservative treatment prior to implantation. Non-surgical alternatives listed include: "conservative treatment without intervention, medications, chiropractic care, disc injections, and/or physical therapy."
At the time of Charite's approval, approximately 200,000 spinal fusion surgeries were performed in the US each year. Spinal fusion eliminates mobility on that section of the spine to relieve pain. Because spinal fusion limits motion, the Charite was promoted as a disc replacement that could reduce back pain while preserving motion.
J&J is facing a growing number of lawsuits alleging the Charite is a defective product and malfunctions in a variety of ways. There are complaints that the Charite migrates from its implant location to other locations, and that the plates of the disc grind together, causing the release of disc fragments into the body. Others complaints allege defects at the center of the disc's rotation causing instability in the spine.
Some experts believe the device should be taken off the market. In a May 13, 2005, interview with The Street.com, Dr Charles Rosen, an associate clinical professor of spine surgery at the University of California at Irvine, told Melissa Davis, "These artificial disc replacements should be recalled by the FDA to protect the American public."
"I think there are going to be thousands and thousands of people who suffer failures and wind up in chronic pain with no solution for it," he warned.
"I don't know how anyone, in good conscience," he told Ms Davis, "could put these things in knowing the past history and the potential for so many failures."
"It's just money," Dr Rosen states, "over everything else, and it's just cruel."
In the US, between October 2004, and July 2006, the FDA received over 130 reports of serious adverse events in patients implanted with the Charite. Experts have criticized the FDA for ever approving the artificial disc to begin with. To win approval, all J&J had to do was prove that the Charite worked at least as well as Bagby and Kuslich, or BAK, cages used in spinal fusions.
For the study submitted to the FDA with the application for approval, the Charite was implanted in 205 subjects and compared to 99 patients who received the spinal fusion cage. However, each investigational site was required to enroll their first 5 Charite patients as surgeon training cases and a total of 71 subjects were enrolled.
During a May 26, 2005, interview with John McCormick for Research Daily, Dr Rosen explained that he originally became interested in the Charite to decide whether he wanted to use the device or not. As with all new procedure, he said, he researched the literature.
Dr Rosen looked first at the FDA study and noticed immediately that 71 patients, or 25% of the initial subjects, were excluded. "I have never come across a randomized controlled trial," he stated, "where data is excluded because it is simply the initial data."
"The learning curve aspect to the argument," he states, "only tells me there are mistakes that they don't want revealed."
The limited data that is available on the 71 patients shows that the incidence of adverse events within the first 2 days after surgery was much higher among training subjects at 46.5%, compared to 28.3% of the patients who went on to participate in the study.
Overall, the incidence of device related adverse events was also higher in the training group at 11.3%, verses 7.8% in actual trial patients. Adverse events considered by the investigators to be device related, included back and lower extremities pain, implant displacement, and subsidence.
These adverse events also occurred more often in the Charite patient group in the study when compared to the rate in the spinal fusion patients of 4.0%.
The FDA's Orthopaedic and Rehabilitation Devices Advisory Panel held a hearing on June 2, 2004, and the committee voted to approve the Charite, despite the many warnings expressed by experts while testifying at the hearing.
For instance, Dr John Peloza explained that the Charite would be expected to last a lifetime in young patients and it had only been studied for 2 years in the US. "Revision surgery to remove the implant," he warned, "will be potentially life-threatening in every case."
"And at present," he added "there is no consistently successful strategy to deal with a failed implant."
Danish surgeon, Dr Andre van Ooij, who tracked hundreds of Charite surgeries in Europe, warned the panel about retrograde ejaculation and erectile dysfunction in men, and leg complications in other patients, and said joint degeneration was an especially big problem.
"All of these patients have really terrible leg and back pain," Dr van Ooij stated. He also warned that "revision is dangerous and sometimes impossible."
He explained that spinal fusion surgery that may have been successful if done first, was rarely successful in failed Charite patients.
Critics say, the FDA ignored over 17 years of evidence on Charite use in Europe, including a study that found more than half of the patients had fair or poor results.
According to Dr Rosen, the Charite has regularly failed in Europe, leaving patients with life-threatening complications, and calls it "unbelievable" that the FDA ever approved the device. In the end, the conclusion in the approval letter cited by the FDA as the basis for approval states in part:
"The valid scientific evidence presented in the preceding sections demonstrates that the CHARITE Artificial Disc is safe and effective in the treatment of DDD at one level in the L4-S 1 region of the lumbar spine; and the device is non-inferior when comparing Overall Success rates to the control in treatment of DDD at one level (L4-S 1)."
While this may have been enough for the FDA, it was not good enough for the overseers of public health programs. When deciding whether to pay for a device, the Centers for Medicare and Medicaid Services evaluates all relevant evidence to determine whether it supports a finding that an item is reasonable and necessary to improve the functioning of a malformed body member.
In reviewing the Charite study submitted to the FDA, the CMS noted that 24 months after surgery, 73 of the 114 patients listed as successful were still on narcotics for pain. The CMS also mentioned the limited information on the initial training group of 71 patients.
In reaching its decision, CMS reviewed an analysis of adverse events reported in the Manufacturer and User Facility Device Experience database. A total of 101 Medical Device Reports were analyzed for 96 patients. The most frequent event was device migration out of the implant location, in 54 of the 96 patients.
Seventy-six had a second surgery with 50 of the 76 due to device migration. The second most common surgery was to remove all or part of the disc followed by spinal fusion of the implanted segment. Twelve patients had 2 Charites despite the device labeling for only one implant and most events that required second surgery occurred in the first 2 months. There were 2 deaths attributed to pulmonary emboli.
In the end, the CMS decided not to pay for Charite surgery for patients over the age of 60, after concluding in part: "The results of the Charite Premarket Approval noninferiority trial are unconvincing as a demonstration of net health benefit."
The Charite artificial spinal disc was FDA approved in October 2004, as an alternative to spinal fusion surgery. But in reality, experts say, the superiority of the two procedures is limited to the cost. Charite disc replacement can run as high as $50,000, while spinal fusion surgery costs less than half that at roughly $23,000.
The Charite is marketed by the DePuy Spine division of Johnson & Johnson and is approved for spinal arthroplasty in patients with degenerative disc disease at one level of the spine, defined by the FDA as discogenic back pain with degeneration of the disc confirmed by patient history and radiographic studies.
According to the FDA, patients should have failed at least 6 months of conservative treatment prior to implantation. Non-surgical alternatives listed include: "conservative treatment without intervention, medications, chiropractic care, disc injections, and/or physical therapy."
At the time of Charite's approval, approximately 200,000 spinal fusion surgeries were performed in the US each year. Spinal fusion eliminates mobility on that section of the spine to relieve pain. Because spinal fusion limits motion, the Charite was promoted as a disc replacement that could reduce back pain while preserving motion.
J&J is facing a growing number of lawsuits alleging the Charite is a defective product and malfunctions in a variety of ways. There are complaints that the Charite migrates from its implant location to other locations, and that the plates of the disc grind together, causing the release of disc fragments into the body. Others complaints allege defects at the center of the disc's rotation causing instability in the spine.
Some experts believe the device should be taken off the market. In a May 13, 2005, interview with The Street.com, Dr Charles Rosen, an associate clinical professor of spine surgery at the University of California at Irvine, told Melissa Davis, "These artificial disc replacements should be recalled by the FDA to protect the American public."
"I think there are going to be thousands and thousands of people who suffer failures and wind up in chronic pain with no solution for it," he warned.
"I don't know how anyone, in good conscience," he told Ms Davis, "could put these things in knowing the past history and the potential for so many failures."
"It's just money," Dr Rosen states, "over everything else, and it's just cruel."
In the US, between October 2004, and July 2006, the FDA received over 130 reports of serious adverse events in patients implanted with the Charite. Experts have criticized the FDA for ever approving the artificial disc to begin with. To win approval, all J&J had to do was prove that the Charite worked at least as well as Bagby and Kuslich, or BAK, cages used in spinal fusions.
For the study submitted to the FDA with the application for approval, the Charite was implanted in 205 subjects and compared to 99 patients who received the spinal fusion cage. However, each investigational site was required to enroll their first 5 Charite patients as surgeon training cases and a total of 71 subjects were enrolled.
During a May 26, 2005, interview with John McCormick for Research Daily, Dr Rosen explained that he originally became interested in the Charite to decide whether he wanted to use the device or not. As with all new procedure, he said, he researched the literature.
Dr Rosen looked first at the FDA study and noticed immediately that 71 patients, or 25% of the initial subjects, were excluded. "I have never come across a randomized controlled trial," he stated, "where data is excluded because it is simply the initial data."
"The learning curve aspect to the argument," he states, "only tells me there are mistakes that they don't want revealed."
The limited data that is available on the 71 patients shows that the incidence of adverse events within the first 2 days after surgery was much higher among training subjects at 46.5%, compared to 28.3% of the patients who went on to participate in the study.
Overall, the incidence of device related adverse events was also higher in the training group at 11.3%, verses 7.8% in actual trial patients. Adverse events considered by the investigators to be device related, included back and lower extremities pain, implant displacement, and subsidence.
These adverse events also occurred more often in the Charite patient group in the study when compared to the rate in the spinal fusion patients of 4.0%.
The FDA's Orthopaedic and Rehabilitation Devices Advisory Panel held a hearing on June 2, 2004, and the committee voted to approve the Charite, despite the many warnings expressed by experts while testifying at the hearing.
For instance, Dr John Peloza explained that the Charite would be expected to last a lifetime in young patients and it had only been studied for 2 years in the US. "Revision surgery to remove the implant," he warned, "will be potentially life-threatening in every case."
"And at present," he added "there is no consistently successful strategy to deal with a failed implant."
Danish surgeon, Dr Andre van Ooij, who tracked hundreds of Charite surgeries in Europe, warned the panel about retrograde ejaculation and erectile dysfunction in men, and leg complications in other patients, and said joint degeneration was an especially big problem.
"All of these patients have really terrible leg and back pain," Dr van Ooij stated. He also warned that "revision is dangerous and sometimes impossible."
He explained that spinal fusion surgery that may have been successful if done first, was rarely successful in failed Charite patients.
Critics say, the FDA ignored over 17 years of evidence on Charite use in Europe, including a study that found more than half of the patients had fair or poor results.
According to Dr Rosen, the Charite has regularly failed in Europe, leaving patients with life-threatening complications, and calls it "unbelievable" that the FDA ever approved the device. In the end, the conclusion in the approval letter cited by the FDA as the basis for approval states in part:
"The valid scientific evidence presented in the preceding sections demonstrates that the CHARITE Artificial Disc is safe and effective in the treatment of DDD at one level in the L4-S 1 region of the lumbar spine; and the device is non-inferior when comparing Overall Success rates to the control in treatment of DDD at one level (L4-S 1)."
While this may have been enough for the FDA, it was not good enough for the overseers of public health programs. When deciding whether to pay for a device, the Centers for Medicare and Medicaid Services evaluates all relevant evidence to determine whether it supports a finding that an item is reasonable and necessary to improve the functioning of a malformed body member.
In reviewing the Charite study submitted to the FDA, the CMS noted that 24 months after surgery, 73 of the 114 patients listed as successful were still on narcotics for pain. The CMS also mentioned the limited information on the initial training group of 71 patients.
In reaching its decision, CMS reviewed an analysis of adverse events reported in the Manufacturer and User Facility Device Experience database. A total of 101 Medical Device Reports were analyzed for 96 patients. The most frequent event was device migration out of the implant location, in 54 of the 96 patients.
Seventy-six had a second surgery with 50 of the 76 due to device migration. The second most common surgery was to remove all or part of the disc followed by spinal fusion of the implanted segment. Twelve patients had 2 Charites despite the device labeling for only one implant and most events that required second surgery occurred in the first 2 months. There were 2 deaths attributed to pulmonary emboli.
In the end, the CMS decided not to pay for Charite surgery for patients over the age of 60, after concluding in part: "The results of the Charite Premarket Approval noninferiority trial are unconvincing as a demonstration of net health benefit."
Investigations Focus on Illegal Marketing by Medical Device and Supply Companies
Evelyn Pringle May 2007
Government law enforcement agencies have made it known that illegal marketing and promotional practices of medical device and supply companies are now the targets of investigations basically because lawmakers who oversee spending by public health care programs say the booming business in this field of medicine is a little too good to be true.
The combination of health problems that have surfaced with the new wave of medical devices and the massive bilking of public programs for the cost of products, services and off-label procedures is what ultimately drew the focus of lawmakers not only to the marketing practices of the industry but also to the doctors and medical facilities that are on the take.
Over the past 2 years, Medicare payments to hospitals for implant surgery have risen about 40%, from $10 billion to $14 billion, according to an analysis of Medicare records reported in the September 26, 2006, New York Times.
In addition, the Centers for Medicare and Medicaid Services, estimates that between April 2005 and March 2006, $700 million in improper payments by Medicare have been made for medical equipment and supplies alone.
Last summer the New York Times reported that hospital executives were being treated to extravagant resort trips, with massages and golf perks, and paid thousands of dollars to advise companies on how to sell their products and services to hospitals.
Officials in some states are investigating these types of relationships. Connecticut’s attorney general, Richard Blumenthal, told the Times that his office was looking into deals that “at the very least . . . suggest insider dealings — an insidious, incestuous, insider system” that could mean hospitals are not getting the best deals in cost or quality.
At that time, he reported that he has issued more than 100 subpoenas, mostly to hospital suppliers, related to his inquiry
As part of the fraud crackdown, the government has set up a “Medicare Fraud Strike Force,” with members including officials from the FBI, the US Department of Justice and the Department of Health and Human Services and claims it could save as much as $2.5 billion by eliminating the fraud.
And just about every major device maker has reported receiving subpoenas from Congressional investigative committees and or law enforcement agencies in SEC filings, and in most cases, the firms are being forced to respond to subpoenas related to not one, but several investigations.
The majority of the cases involve the off-label marketing of products for unapproved uses. When a medical device is approved by the FDA the labeling lists the indications for which the device may be used. Although surgeons are allowed to implant a device approved for one indication in patients for other conditions not listed on the label, device makers are prohibited by law from influencing doctors to implant their products for unapproved uses.
Device makers Johnson & Johnson and Boston Scientific have been asked to turn over documents as part of an investigation into the off-label marketing of the new drug-eluting stents implanted in patients with heart disease approved in the US for less that 3 years. In December 2006, an FDA advisory panel noted that 3 out of 5 implants of the new stents were off-label.
Investigators are finding that the off-label marketing of these devices is leading doctors to implant for profit not need. On March 7, 2007, the Salisbury Daily Times reported that at least 25 patients in Maryland had received unnecessary stenting by Dr John McLean at the Peninsula Regional Medical Center in 2006.
On May 3, 2007, the Times reported that Dr McLean is now under investigation by the FBI in conjunction with the Health and Human Services Department. “A clear majority of patients under review are seniors on Medicare,” officials told the Times.
“The average charge that Medicare pays for a drug-eluting stent procedure ranges from $11,184 to $14,287, depending upon treatment needed in the coronary artery,” a Medicare spokesperson told the Times.
As part of the investigation, the Times said, records are being seized and subpoenas are being issued to staff and personnel who worked with Dr McLean at the Medical Center.
Donna Richardson, the facility’s public relations director, released a statement saying the Center was not the target of the investigation and was fully cooperating with investigators.
Back in March 2007, the facility announced that a review of Dr McLean's procedures found that at least 25 stent implants were questionable because alternative methods could have been used to treat blood clots.
In December 2006, Dr McLean forfeited his catheterization laboratory credentials at the Medical Center, which prevented him from diagnosing coronary artery disease and he resigned all of his staff credentials on March 2, 2007. Dr McLean is also closing his own medical office on May 31, according to an ad in the Times.
A spokesperson for the Center said the facility is willing to reimburse patients and insurance companies but according to the Times, the chief medical officer, Dr Tom Lawrence said the Center had not yet determined how much would be paid due to a complicated billing process and an unclear total of unnecessary stent implants. In 2006, he said, the Center had performed 1,800 heart catheterizations with stents divided among 20 cardiologists
The off-label marketing of the Charite artificial spinal disc by J&J subsidiary, Depuy, is also under the microscope. The device was approved in 2004 for limited use but as soon as it hit the market spine surgeons started using the disc for all kinds of off-label procedures with dire consequences for patients. Last year an FDA review found that 12 patients who developed adverse events had two Charite implants when the FDA’s approved labeling specifically allows for only one.
Following the FDA review, the CMS announced that Medicare would no longer pay for the Charite replacement disc in patients over 60, after determining that the $30,000 to $50,000 procedure would not improve net health benefits for patients with low back pain.
On August 18, 2006 the Department of Labor & Industries followed suit and said that it would not authorize the Charite, "for the care and treatment of injured workers or victims of crime."
Federal and state anti-kickback statutes make it illegal to offer or to accept remuneration in return for a referral of a patient or services covered by public programs. But critics say the pharmaceutical industry is using sham consulting contracts and professional service agreements to funnel payments to doctors in return for using their products.
The DOJ turned up the heat on device makers last year by issuing subpoenas to major manufacturers including Biomet, DePuy; Smith & Nephew; Stryker; and Zimmer, demanding consulting contracts, professional services agreements, and other documents related to financial arrangements with orthopedic surgeons.
On September 11, 2006, Dow Jones reported that the subpoenas sought several years' worth of documents regarding possible federal criminal and antitrust-law violations, and that the same 5 companies reported receiving a separate batch of subpoenas in a probe of consulting or professional services agreements with orthopedics surgeons in early 2005.
"A number of investigations are under way," Lewis Morris, chief counsel to the inspector general for the DHHS told the New York Time on September 22, 2006.
"The potential for inappropriately steering medical decisions is always at play, and there is always the risk that doctors will prescribe a particular device because of their own financial interest and not the interest of the patient," Mr Morris said in the Times.
Device maker Medtronic reported in its filing with the SEC for the period ending January 27, 2007, that it is complying with a subpoena from the US attorney for the District of Massachusetts requesting documents related to defibrillators, pacemakers, and related components and services; and the provision of benefits to persons in a position to recommend the purchase of such devices; as well as training and compliance materials relating to the fraud and abuse and the federal Anti-Kickback statutes.
Medtronic just paid $40 million in 2005 to settle charges by the DOJ that a subsidiary paid doctors kickbacks in exchange for using the firm’s spinal surgery products.
In what legal experts are calling a preemptive effort to avoid being barred from having Medicare and Medicaid pay for any of its products, on February 12, 2007, J&J informed the DOJ and the SEC that subsidiaries in other countries made improper payments related to the sale of medical devices which may fall under the jurisdiction of the Foreign Corrupt Practices Act.
A major kickback scheme involving doctors was recently revealed in a January 17, 2007 press release by Illinois Attorney General Lisa Madigan to announce that her office had intervened in a lawsuit brought by a whistleblower private plaintiff against several Chicago area radiology centers over their payment of illegal kickbacks to doctors.
In 2006, the private plaintiff, John Donaldson, the owner of radiology centers in Illinois, filed the lawsuit on behalf of the State and the complaint remained under seal while the Attorney’s office investigated the allegations and determined whether to intervene.
The lawsuit was filed against MIDI, LLC, a Virginia-based company that operates 13 Open Advanced MRI facilities in Chicago, Crystal Lake, Bannockburn, Deer Park, Schaumberg, Elk Grove Village, Buffalo Grover, Niles, Skokie and other areas, and lists more than 20 MRI Centers as defendants in violating the Consumer Fraud and Deceptive Business Practices Act, the Illinois' anti-kickback law and Insurance Fraud Prevention Act.
The lawsuit says the MRI Centers used “sham” lease agreements to benefit doctors in return for referrals, sometimes for unnecessary testing, and provides the details of how some MRI centers marketed and trained sales people to lure doctors into the lease deals.
According to the complaint, the leases purport to provide for the rental of a particular facility by the referring physician for the performance of the MRI services when in fact, “the MRI imaging services are done solely by the operator of the MRI Service Center and their employees, and not the physician.”
“Under the scheme,” the lawsuit explains, “the insurers pay the physicians and the payment is then divided and split between the MRI Service Center operator and the referring physician.”
The complaint charges that the schemes “involve thousands of fraudulent claims submitted to private insurers in Illinois for MRI scans done on numerous Illinois citizens.”
“The only activity by the referring physician,” it alleges, “is referring patients, billing the services as his own and receiving a kickback.”
On May 10, 2007, the Chicago Tribune reported that Chicago area doctors were told they could make over $130,000 a year by referring patients to these MRI centers. Under the largest payment plan, the Tribune said, doctors could earn “a potential fee of $277 per MRI for each patient referred for a scan.”
Critics say company executives had also better beware because the sanctions for engaging in illegal marketing schemes is no longer merely a matter of civil penalties and fines. In the recent Federal case of the United States v Caputo (ND Ill., 10/16/06), the compliance officer of a device company accused of marketing a product illegally was sentenced to prison for 7-years.
The surgeons involved in the schemes are also becoming targets of litigation. A class action lawsuit was filed in January 2007, against Arkansas neurosurgeon, Patrick Chan, accusing him of performing unnecessary surgeries in exchange for kickbacks from medical supply companies including Orthofix, Osteotech, Alphatec, and Signus.
The Medicare Fraud Task Force investigations are beginning to bear fruit. On May 9, 2007, the DOJ announced the arrest of 38 people as a result of an investigation that found sham companies had billed Medicare for $142 million worth of unnecessary or nonexistent medical equipment or supplies.
One person arrested, Eduardo Moreno, the owner of several medical supply firms who had his Rolls Royce seized last month, is accused of submitted false claims to Medicare for more than $1.9 million including billings for "powered pressure-reducing air mattresses" at a cost of $868.85 per item.
Government law enforcement agencies have made it known that illegal marketing and promotional practices of medical device and supply companies are now the targets of investigations basically because lawmakers who oversee spending by public health care programs say the booming business in this field of medicine is a little too good to be true.
The combination of health problems that have surfaced with the new wave of medical devices and the massive bilking of public programs for the cost of products, services and off-label procedures is what ultimately drew the focus of lawmakers not only to the marketing practices of the industry but also to the doctors and medical facilities that are on the take.
Over the past 2 years, Medicare payments to hospitals for implant surgery have risen about 40%, from $10 billion to $14 billion, according to an analysis of Medicare records reported in the September 26, 2006, New York Times.
In addition, the Centers for Medicare and Medicaid Services, estimates that between April 2005 and March 2006, $700 million in improper payments by Medicare have been made for medical equipment and supplies alone.
Last summer the New York Times reported that hospital executives were being treated to extravagant resort trips, with massages and golf perks, and paid thousands of dollars to advise companies on how to sell their products and services to hospitals.
Officials in some states are investigating these types of relationships. Connecticut’s attorney general, Richard Blumenthal, told the Times that his office was looking into deals that “at the very least . . . suggest insider dealings — an insidious, incestuous, insider system” that could mean hospitals are not getting the best deals in cost or quality.
At that time, he reported that he has issued more than 100 subpoenas, mostly to hospital suppliers, related to his inquiry
As part of the fraud crackdown, the government has set up a “Medicare Fraud Strike Force,” with members including officials from the FBI, the US Department of Justice and the Department of Health and Human Services and claims it could save as much as $2.5 billion by eliminating the fraud.
And just about every major device maker has reported receiving subpoenas from Congressional investigative committees and or law enforcement agencies in SEC filings, and in most cases, the firms are being forced to respond to subpoenas related to not one, but several investigations.
The majority of the cases involve the off-label marketing of products for unapproved uses. When a medical device is approved by the FDA the labeling lists the indications for which the device may be used. Although surgeons are allowed to implant a device approved for one indication in patients for other conditions not listed on the label, device makers are prohibited by law from influencing doctors to implant their products for unapproved uses.
Device makers Johnson & Johnson and Boston Scientific have been asked to turn over documents as part of an investigation into the off-label marketing of the new drug-eluting stents implanted in patients with heart disease approved in the US for less that 3 years. In December 2006, an FDA advisory panel noted that 3 out of 5 implants of the new stents were off-label.
Investigators are finding that the off-label marketing of these devices is leading doctors to implant for profit not need. On March 7, 2007, the Salisbury Daily Times reported that at least 25 patients in Maryland had received unnecessary stenting by Dr John McLean at the Peninsula Regional Medical Center in 2006.
On May 3, 2007, the Times reported that Dr McLean is now under investigation by the FBI in conjunction with the Health and Human Services Department. “A clear majority of patients under review are seniors on Medicare,” officials told the Times.
“The average charge that Medicare pays for a drug-eluting stent procedure ranges from $11,184 to $14,287, depending upon treatment needed in the coronary artery,” a Medicare spokesperson told the Times.
As part of the investigation, the Times said, records are being seized and subpoenas are being issued to staff and personnel who worked with Dr McLean at the Medical Center.
Donna Richardson, the facility’s public relations director, released a statement saying the Center was not the target of the investigation and was fully cooperating with investigators.
Back in March 2007, the facility announced that a review of Dr McLean's procedures found that at least 25 stent implants were questionable because alternative methods could have been used to treat blood clots.
In December 2006, Dr McLean forfeited his catheterization laboratory credentials at the Medical Center, which prevented him from diagnosing coronary artery disease and he resigned all of his staff credentials on March 2, 2007. Dr McLean is also closing his own medical office on May 31, according to an ad in the Times.
A spokesperson for the Center said the facility is willing to reimburse patients and insurance companies but according to the Times, the chief medical officer, Dr Tom Lawrence said the Center had not yet determined how much would be paid due to a complicated billing process and an unclear total of unnecessary stent implants. In 2006, he said, the Center had performed 1,800 heart catheterizations with stents divided among 20 cardiologists
The off-label marketing of the Charite artificial spinal disc by J&J subsidiary, Depuy, is also under the microscope. The device was approved in 2004 for limited use but as soon as it hit the market spine surgeons started using the disc for all kinds of off-label procedures with dire consequences for patients. Last year an FDA review found that 12 patients who developed adverse events had two Charite implants when the FDA’s approved labeling specifically allows for only one.
Following the FDA review, the CMS announced that Medicare would no longer pay for the Charite replacement disc in patients over 60, after determining that the $30,000 to $50,000 procedure would not improve net health benefits for patients with low back pain.
On August 18, 2006 the Department of Labor & Industries followed suit and said that it would not authorize the Charite, "for the care and treatment of injured workers or victims of crime."
Federal and state anti-kickback statutes make it illegal to offer or to accept remuneration in return for a referral of a patient or services covered by public programs. But critics say the pharmaceutical industry is using sham consulting contracts and professional service agreements to funnel payments to doctors in return for using their products.
The DOJ turned up the heat on device makers last year by issuing subpoenas to major manufacturers including Biomet, DePuy; Smith & Nephew; Stryker; and Zimmer, demanding consulting contracts, professional services agreements, and other documents related to financial arrangements with orthopedic surgeons.
On September 11, 2006, Dow Jones reported that the subpoenas sought several years' worth of documents regarding possible federal criminal and antitrust-law violations, and that the same 5 companies reported receiving a separate batch of subpoenas in a probe of consulting or professional services agreements with orthopedics surgeons in early 2005.
"A number of investigations are under way," Lewis Morris, chief counsel to the inspector general for the DHHS told the New York Time on September 22, 2006.
"The potential for inappropriately steering medical decisions is always at play, and there is always the risk that doctors will prescribe a particular device because of their own financial interest and not the interest of the patient," Mr Morris said in the Times.
Device maker Medtronic reported in its filing with the SEC for the period ending January 27, 2007, that it is complying with a subpoena from the US attorney for the District of Massachusetts requesting documents related to defibrillators, pacemakers, and related components and services; and the provision of benefits to persons in a position to recommend the purchase of such devices; as well as training and compliance materials relating to the fraud and abuse and the federal Anti-Kickback statutes.
Medtronic just paid $40 million in 2005 to settle charges by the DOJ that a subsidiary paid doctors kickbacks in exchange for using the firm’s spinal surgery products.
In what legal experts are calling a preemptive effort to avoid being barred from having Medicare and Medicaid pay for any of its products, on February 12, 2007, J&J informed the DOJ and the SEC that subsidiaries in other countries made improper payments related to the sale of medical devices which may fall under the jurisdiction of the Foreign Corrupt Practices Act.
A major kickback scheme involving doctors was recently revealed in a January 17, 2007 press release by Illinois Attorney General Lisa Madigan to announce that her office had intervened in a lawsuit brought by a whistleblower private plaintiff against several Chicago area radiology centers over their payment of illegal kickbacks to doctors.
In 2006, the private plaintiff, John Donaldson, the owner of radiology centers in Illinois, filed the lawsuit on behalf of the State and the complaint remained under seal while the Attorney’s office investigated the allegations and determined whether to intervene.
The lawsuit was filed against MIDI, LLC, a Virginia-based company that operates 13 Open Advanced MRI facilities in Chicago, Crystal Lake, Bannockburn, Deer Park, Schaumberg, Elk Grove Village, Buffalo Grover, Niles, Skokie and other areas, and lists more than 20 MRI Centers as defendants in violating the Consumer Fraud and Deceptive Business Practices Act, the Illinois' anti-kickback law and Insurance Fraud Prevention Act.
The lawsuit says the MRI Centers used “sham” lease agreements to benefit doctors in return for referrals, sometimes for unnecessary testing, and provides the details of how some MRI centers marketed and trained sales people to lure doctors into the lease deals.
According to the complaint, the leases purport to provide for the rental of a particular facility by the referring physician for the performance of the MRI services when in fact, “the MRI imaging services are done solely by the operator of the MRI Service Center and their employees, and not the physician.”
“Under the scheme,” the lawsuit explains, “the insurers pay the physicians and the payment is then divided and split between the MRI Service Center operator and the referring physician.”
The complaint charges that the schemes “involve thousands of fraudulent claims submitted to private insurers in Illinois for MRI scans done on numerous Illinois citizens.”
“The only activity by the referring physician,” it alleges, “is referring patients, billing the services as his own and receiving a kickback.”
On May 10, 2007, the Chicago Tribune reported that Chicago area doctors were told they could make over $130,000 a year by referring patients to these MRI centers. Under the largest payment plan, the Tribune said, doctors could earn “a potential fee of $277 per MRI for each patient referred for a scan.”
Critics say company executives had also better beware because the sanctions for engaging in illegal marketing schemes is no longer merely a matter of civil penalties and fines. In the recent Federal case of the United States v Caputo (ND Ill., 10/16/06), the compliance officer of a device company accused of marketing a product illegally was sentenced to prison for 7-years.
The surgeons involved in the schemes are also becoming targets of litigation. A class action lawsuit was filed in January 2007, against Arkansas neurosurgeon, Patrick Chan, accusing him of performing unnecessary surgeries in exchange for kickbacks from medical supply companies including Orthofix, Osteotech, Alphatec, and Signus.
The Medicare Fraud Task Force investigations are beginning to bear fruit. On May 9, 2007, the DOJ announced the arrest of 38 people as a result of an investigation that found sham companies had billed Medicare for $142 million worth of unnecessary or nonexistent medical equipment or supplies.
One person arrested, Eduardo Moreno, the owner of several medical supply firms who had his Rolls Royce seized last month, is accused of submitted false claims to Medicare for more than $1.9 million including billings for "powered pressure-reducing air mattresses" at a cost of $868.85 per item.
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