An example of kickbacks that happened within NJ about a decade ago involved many of the top orthopedic device companies in the area. Zimmer, Biomet, Depuy, Smith & Nephew, and Stryker (although Stryker was not directly fined for kickbacks they were involved in a nonprosecution agreement). These companies dealt with a combined fine of 311 million dollars as a result of their kickback program that influence the surgeons decision in selecting knee and hip implants for patients.The kickbacks would be received by the surgeon's through "consulting deals" which paid surgeons as consultants and included free trips and other benefits. This resulted in surgeon's making the decisions based off what company offered them the most money rather than what product is best for the patients receiving it.
Danvers-based Abiomed, Inc. has agreed to pay $3.1 million to resolve allegations that it violated the False Claims Act by purchasing lavish meals for physicians in order to induce them to use Abiomed’s Impella line of heart pumps. The United States contends that Abiomed sought to induce physicians to use its pumps, which cost more than $20,000 each, by buying meals for them at some of the country’s most expensive restaurants. The government further contends that Abiomed (1) paid for physicians’ meals in instances where attendees ordered alcohol in an amount inconsistent with legitimate scientific discussion; (2) paid for meals at expensive restaurants where employees invited spouses of physicians to attend (even though the spouses had no legitimate business purpose for attending the meal; (3) paid for numerous meals for physicians in which the cost per-attendee well exceeded Abiomed’s own $150 per person guideline (in one instance exceeding $450 per-attendee); and (4) paid for meals for physicians in which their employees misrepresented the number of attendees, listed attendees with generic names (e.g., Mike Anesthesia), or listed fictitious names of individuals who did not attend the meal, which had the effect of making the true per-attendee cost appear lower. Abiomed managers approved the expenses for all of these meals.
One article I found about this topic was related to the opioid crackdown that has been going on as of late. A former drug company sales manager admitted that he was part of a larger scheme to bribe doctors to have them prescirbe a fentanyl spray called "Subsys" to patients that were not meant to have prescribed to them. Originally, the drug was meant for cancer patients with severe pain, but it was prescribed to patients without that level of pain. Because of the addictive nature of fentanyl, patients often found themselves taking it not to help the pain but instead to cope from withdrawl systems that took place if they did not take it. The kickbacks took the form of speaking fees for opportunities for doctors to speak about the drug. Those who spoke about it would receive much money, sometimes over 200k but those who did not would be taken off speaking lists.
Search for source: former drug firm executive admits to opioid kickback scheme
Just a few days ago, Medtronic Spine is facing anti-kickback allegations for promoting a bone growth promoting device, Infuse (limited for use in the lower back) to physicians with methods not approved by the FDA. This device is used in the spine to promote bone growth, solely for application to the lower back. However, Medtronic had been urging and pushing physicians to implant Infuse in 1) the neck region, not approved by the FDA, as well as using 2) "off-label" methods not approved by the FDA. Having spent $210 million to doctors as well as editing journal articles on Infuse, they have tried hiding information in order for physicians to use their product. Consequently, this has led to many deaths and injuries due to surgeons implanting these devices in the neck region. After having faced allegations back in 2008 for bribing physicians into using their products, they have violated this pledge and will face harsher consequences.
A PA physician pleaded guilty to accepting kickbacks from Insys in exchange for prescribing Subsys, a form of fentanyl. Insys labeled the payments as educational seminars that turned out to be falsely labeled. These seminars were held but were not always attended by the physician in question. Meanwhile the physician over-prescribed Subsys by giving it to patients that didn't need it. Insys has already been caught red-handed participating in these kickback schemes and have paid the price with many of their top executives now convicts. I understand that this is not an isolated incident and it shows the many cracks still visible in our healthcare system.
An example of a recent kickback is in October 2020, when Medtronic agreed to pay neurosurgeon Dr. Wilson Asfora for social events at a restaurant which he owned. Dr. Asfora would also have social gatherings at his restaurant in which he invited social acquaintances, business partners, and colleagues (who were all allegedly paid by Medtronic). These payments were made for over 100 events at the neurosurgeon's restaurant over a 9-year period and in return, the neurosurgeon would use Medtronic's SynchroMed II implantable intrathecal infusion pumps for delivering medication to patients. Medtronic agreed to pay the DOJ $9.2M to settle the allegations. Source: https://www.massdevice.com/medtronic-paying-doj-9-2m-to-settle-restaurant-kickback-allegations/
"The False Claims Act offers whistleblowers an effective way to expose and stop pharmaceutical and medical kickbacks in the healthcare system. Kickbacks – hidden financial arrangements between doctors and hospitals or other healthcare providers or companies – are one of the most complicated and troubling aspects of the healthcare system."
I think it's very important for such laws to be in place to make sure the checks and balances that have been put in place are followed. These rules are put in place for good reason, and there should be consequences and fines that follow if the rules and not followed.
A recent example of a kickback allegation that involved a medical device company was an incident involving a company by the name of Arthrex. This Florida based company specializes in orthopedic products. Similar to the exact examples given in Dr. Simon's lecture on Legal Basics, Arthrex was providing payment to a Colorado-based orthopedic surgeon to recommend Arthrex products. Allegedly Arthrex agreed to provide the surgeon service in the form of royalty payments for the surgeon’s contributions to Arthrex’s SutureBridge and SpeedBridge products. The United States Department of Justice cracked down on Arthrex and Arthrex has agreed to pay 16 million to resolve the kickback allegations. In addition Arthrex has agreed to a five-year corporate integrity agreement with HHS-OIG.This is a clear example of a medical company paying kickbacks to boost their profits as Dr. Simon taught us about this week.
In November 2020, The Asahi Shimbun initiated an investigation that revealed the Tokyo-based subsidiary of Globus Medical paid around 100 million to 20 doctors that convinced its employer to purchase its products. The doctors and family members set up companies transferred the money to them. Interestingly, Japan does not have any laws to ban the payments of kickbacks or imprison the doctors receiving the payments. Companies are instructed to rehabilitate and prevent recurrences. Continued violations will result in a $7,400 fine.
Kickbacks are a truly frightening example of corruption and illegal preference because it blurs the line of authenticity and faithfulness of a free making decision that is for the best rather than being under the influence. My first exposure to the term kickbacks and its role in the industry was the 2009 movie The Informant! whose main plot was about price fixing and corruption but had a later subplot of kickback acceptance. This led me to research kickbacks and I found out that it was prevalent in all industries globally, often disguised as a company benefit or "complimentary" perk by the other party.
