New Jersey AG Reaches Settlement With Medical Device Maker Synthes

by Lynn Shapiro, Writer | May 21, 2009
Device approvals should
be based on clinical evidence,
not financial incentives,
NJ AG Anne Milgram maintains
in settlement with the company
New Jersey Attorney General Anne Milgram and Division of Law Director Robert Gilson announced that the state has entered into a settlement agreement with medical device maker Synthes, Inc., which resolves allegations Synthes failed to disclose financial conflicts of interest among doctors who conducted clinical testing of its products.

Under the Assurance of Voluntary Compliance agreement, Synthes must disclose any future payments made by the company to physicians conducting clinical trials on its devices, as well as any investments held by such physicians in the devices they test. A $3 billion global company, Synthes has also agreed to stop paying clinical trial physicians with company stock or stock options.

Based in West Chester, PA, Synthes is known principally for its development of spinal and trauma products and devices. The state's investigation focused on allegations that most doctors conducting clinical trials for Synthes' ProDisc Total Disc Replacement System, ProDisc-L and ProDisc-C, had a financial stake in the outcome.

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

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

Milgram said the Synthes agreement should serve as a template for the entire industry.

In a letter to the FDA, the Attorney General said she is hopeful the Synthes terms will become "best practices" for disclosure among medical device makers.

Milgram's letter described the problem of undisclosed financial conflicts-of-interest among clinical investigators as "rampant," and called on the FDA to more effectively address the problem by adopting rules that require full public disclosure.

Copies of the Attorney General's FDA letter went to Senator Max Baucus, Chairman of the U.S. Senate Committee on Finance, and to Senator Charles E. Grassley, the ranking member of that committee.

In addition, Milgram said her office issued subpoenas today to five major medical device manufacturing companies seeking information about their business practices. She did not disclose the companies' names, but Stryker is also being investigated, according to an SEC document.