Medical device industry spends more on physician payments than pharma
Pharmaceutical company payments to physicians have received significant attention, as policymakers and patients are concerned with the impact of these payments on overprescribing of opioids and other potentially harmful medications.
But what about payments to doctors from companies that make medical devices? These conflicts of interest are less publicized, but are just impactful–if not more–than payments made by drug companies.
In a recent study in Health Affairs, Alon Bergman, postdoctoral fellow at the Leonard Davis Institute of Health Economics and the Wharton School at the University of Pennsylvania, and colleagues conducted a comprehensive examination of medical device industry payments across payment types and specialties. They found that the medical device industry is spending far more than pharma on payments to physicians, and these payments are targeted more specifically to physicians who use their products.
Between 2014-2017, device companies paid $904 million each year to physicians, compared to $821 million that pharma spent. That doesn’t seem like much more, but the device industry has a lot less revenue than pharma, so these payments represent a greater investment relative to the size of the industry. Device companies spent 1.7% of industry revenue on payments to physicians while pharma companies spent 0.24%.
Medical device companies spent more money overall but gave to fewer physicians than pharmaceutical companies did. Each year, about 30% of physicians received a payment from a device company, while about half of physicians received a payment from pharma. Device companies targeted neurosurgeons and orthopedic surgeons specifically; about 75% of physicians in these specialties received a payment. Physicians in surgical specialties typically received more than $400 annually from device companies, while physicians in other specialties received less than $50.
Within the surgical specialties, medical device companies appear to target physicians that do the greatest number of surgeries. The more a surgeon’s Medicare billing amount, the more they received from medical device companies. Surgeons in the 10% for Medicare billing received more than $10,000 from device companies, on average. Pharma also rewards high-billing physicians with greater payments, but even those in the top decile received $4,000 on average–less than half of what medical device companies pay their top physicians.
“The relatively steep relationship between device payments and billing suggests that device firms have greater potential scope than drug firms to influence spending on relevant patient populations,” the authors write. Previous research on the relationship between medical device company payments and physician decisions indicates that physicians are much more likely to use a device made by the manufacturer that gives them the largest payment.
“It becomes a lot harder to [decide which product is best] when that salesperson is also taking you out to $500 dinners and pays you tens of thousands of dollars in consulting fees over the last few years,” said Aaron Mitchell, oncologist and health services researcher at Memorial Sloan Kettering Cancer Research Center, in STAT.
Medical device industry payments differ from pharmaceutical industry payments in another key way: Medical device companies are paying physicians more for product development (categories of payments such as royalties, licensing, and investment) and education, while pharma companies are paying more for speaking fees and food and beverage costs. The authors propose that medical device vendors “may solicit input from practitioners on development, and physicians may approach vendors with ideas for devices,” especially because many medical devices do not have to go through clinical trials to be approved by the US Food and Drug Administration. The fact that new medical devices can go on the market with barely any testing leaves the field wide open for manufacturers and doctors to collaborate on new devices, although patient safety could suffer because of lack of regulation.
This groundbreaking study shows that payments to physicians from medical device company deserve just as much scrutiny as payments from drug companies, if not more. The specific nature of medical device usage means that targeting high-performing surgeons with big payouts could have a large impact on which devices get used the most. And these payments represent a high barrier to entry for new medical device companies that can’t afford to match them. These are areas in great need of more regulation, to prevent potential harm to patients from conflicts of interest.