2 June|NYTimes – The message from cardiologists was loud and clear, according to a top executive at a heart device company. The doctors wanted implant makers to produce more clinical trials of devices to help them generate income from research fees. To compete, “we must be able to ‘answer the bell,’ ” wrote Thomas V. Brown, an executive vice president at the American subsidiary of Biotronik, a small German firm that makes pacemakers and defibrillators.by BARRY MEIER The New York Times
Mr. Brown’s charge came in an e-mail last year to fellow Biotronik executives, one of scores of documents involving the company that offer a portrait of an implant industry where producers seek to influence the brand of device that patients receive long before a diagnosis.
The documents show, for example, that device makers recruit not only implant specialists as consultants but also general cardiologists who refer patients. Those cardiologists, called feeders in one of the documents, can benefit by enrolling the referred patients in a company-financed study that can pay a cardiologist up to $4,800 a patient.
A lawyer representing Biotronik, Christopher Myers, said Mr. Brown’s e-mail was sent around the same time that some Biotronik sales officials were asking the company to design “unscientific studies” to compete with producers offering sham studies “as a means of funneling money to doctors.” Mr. Myers said Biotronik executives like Mr. Brown had refused to do so and that the company’s studies were all scientifically sound.
In recent years, big makers of implants like heart devices and artificial joints, including Johnson & Johnson, Boston Scientific and St. Jude Medical, have settled Justice Department charges that they illegally promoted sales. The enforcement effort has sought to reduce the role of corporate influence over medicine through tactics like bogus or inflated consulting deals with doctors.
Since last year, the Justice Department has been investigating Biotronik’s sales and marketing practices. Biotronik and its consultants have not been accused of wrongdoing, and Mr. Myers said the company had abided by all federal regulations. Citing the Justice Department investigation, executives of the company’s American subsidiary, which is based in Lake Oswego, Ore., declined to be interviewed.
“The implication that our contractual partnership with expert cardiologists is simply to enhance sales is flatly wrong and unfair,” the company stated in a recent news release.
However, sales tactics, rather that scientific data, can determine which company’s device a patient gets because doctors have no independent source of information about which implants work best or last longest, several experts said.
The Biotronik documents, which discuss the company’s sales tactics and those of some competitors, were provided to The New York Times earlier this year by a former Biotronik employee involved in an employment dispute with the company. Biotronik said that last year it had fired the employee, Max Bennett, for inappropriate behavior; Mr. Bennett said that he had been fired after he complained to company executives about corporate wrongdoing.
The lawyer for Biotronik, Mr. Myers, described the records as providing a limited and misleading view of the company’s operations.
In the last few years, Biotronik’s share of the market has grown to about 5 percent from 1 percent, according to a recent report by Matthew J. Dodds, an industry analyst with Citi Investment. The company has attributed the increase to, among other things, products that it says are better and more reliable than those of competitors and to better service to doctors.
The documents, which include e-mails, sales reports and strategy documents, offer another possible contributing explanation: the company’s success in developing relationships with doctors who, in turn, can influence which brand of device a patient gets.
The company’s relationship with a general cardiologist in Tucson, Dr. Monty C. Morales, is the subject of several memos.
In mid-2008, Biotronik retained Dr. Morales as a consultant under an arrangement that paid him up to $2,000 a month, company records indicate. And about that same time, Dr. Morales, who does not implant devices, expressed strong opinions about the implant brand his patients should get, according to a report apparently written by a sales representative for a Biotronik distributor called Western Medical.
In that memo, Dr. Morales is described as saying that he would not refer patients to an implant specialist in his same Tucson-area practice, Dr. Darren Peress, unless Dr. Peress started implanting Biotronik devices.
“Currently, Peress does not get any of Morales’ business,” the memo stated. “Monty will strongly support use and send Peress business if he uses Biotronik.”
Dr. Morales did not respond to telephone calls and letters seeking comment.
A spokesman for Western Medical, Rob Housman, said that company could not locate the sales document in question.
Among the Tucson-area implant specialists to whom Dr. Morales apparently referred his patients was Dr. Benigno F. Decena III, the Western Medical report indicates. Internal Biotronik sales data indicates that Dr. Decena’s usage of the company’s products rose sharply in 2009.
During the 12-month period from February 2009 to January 2010, the monetary value of the Biotronik devices used by Dr. Decena reached $1.1 million, an eightfold increase from the previous 12-month period, data shows. Dr. Decena, who is not listed in the documents as a Biotronik consultant, did not respond to requests for comment. Mr. Myers, the Biotronik lawyer, said that the sales data reviewed by The Times represented a preliminary document that was “replete with inaccurate and incomplete information.” He declined to provide audited sales data.
As part of last year’s health care overhaul, Congress passed a law intended to arm patients with information about a physician’s financial ties. Under the law, medical products companies will have to disclose the fees they pay to doctors for services like consulting or speaking engagements.
But the new law will not shed light on what the Biotronik documents indicate is a widely used industry practice: the hiring by a device maker of a doctor’s spouse or other relative. For example, in plotting strategies to gain sales at one California hospital, Biotronik officials suggested that an implant specialist, whose son and wife both worked for a competitor, might be wooed if Biotronik offered him concessions “such as studies or even the hiring of his son,” according to an internal company report.
Another company document discussed how the revenues of a sales official sharply dropped after his father, an implant specialist, died unexpectedly in an airplane crash.
The Biotronik documents also shed light on the practice of recruiting cardiologists to influence referrals.
In one instance, a specialist in Sacramento, Calif., told a Biotronik sales official that cardiologists who referred cases to him insisted that he use devices made by Medtronic, a competitor based in Minneapolis. The physician “candidly stated it is the referring community that must accept Biotronik in order for him to implant with us,” the sales official reported.
The Times recently detailed in an article how four implant specialists in Las Vegas sharply increased their use of Biotronik devices in mid-2008, about the same time they became consultants. Those doctors said that it was the quality of Biotronik’s devices, not the payments they had received, that had influenced their choice of implants. Whatever the reason, Biotronik’s revenues apparently skyrocketed. By early 201o, the cumulative monetary value of company devices used by those four physicians alone reached about $16 million, internal Biotronik sales data indicates.
The documents point to similar outcomes elsewhere.
An implant specialist in Fullerton, Calif., Duane E. Bridges, became a consultant to Biotronik in mid-2008, company records indicate. The monetary volume of company products used by Dr. Bridges from early 2008 to early 2009 reached about $360,000, then jumped to $1.6 million over the next 12-month period, a greater than fourfold rise, the company data indicates.
Dr. Bridges did not respond to comment; also a lawyer, Anthony Willoughby, who said he represented Dr. Bridges could not be reached for comment.
Another implant specialist who became a company consultant in mid-2008, Dr. Michael Brodsky of Irvine, Calif., increased the dollar value of Biotronik devices he used over those two periods, Biotronik data indicate. The value of company products used by another specialist who became a Biotronik consultant in mid-2008, Dr. Prash Jayaraj of Burbank, Calif., also doubled, company data indicate.
Dr. Jayaraj did not respond to faxes and letters seeking comment. Dr. Brodsky said that the cited figures reflected the fact that he had not actively practiced during the first part of 2008. He also said that his use of Biotronik devices had no connection to his consulting relationship but reflected his view that the company’s products and service were often superior to that of competitors.
A version of this article appeared in print on June 1, 2011, on page B1 of the New York edition with the headline: Sales Tactics On Implants Raise Doubts.
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Tags: Benigno F. Decena, Biotronik, Boston Scientific, bribe, cardiologist, Darren Peress, Duane E. Bridges, Johnson & Johnson, kickback, Max Bennett, Michael Brodsky, Monty C. Morales, Prash Jayaraj, Rob Housman, St. Jude Medical, Western Medical