DOJ Attorney Speaks on Subpoenas
BY SUSAN BERSON, JUNE 23, 2005
[Editor's note: We welcome attorney Susan Berson of Mintz, Levin as our first guest blogger. See her profile here.]
In March 2005, the Federal Government issued several subpoenas to orthopedic device manufacturers requesting information on certain consulting and other financial relationships with orthopedic surgeons. While neither investigations in the health care industry nor investigations involving financial relationships with referral sources is new, and has to some degree come to be expected, the focus on the implantable orthopedic device business was somewhat new. Since the announcement of the subpoenas, there has been very little information available on the status of the investigations, or how far reaching the investigations may be.
Last week I listened in on an audio conference regarding these investigations. Certain comments by Jim Sheehan, AUSA for the Eastern District of Pennsylvania were quite interesting and provide some guidance into what is under investigation and what arrangements would appear permissible. Of special note were the following points:
- Physicians do play a more intense role in the area of implantable orthopedics (versus durable medical equipment), as they are necessary for Beta testing, product suggestions, advice, development and review. Thus, in this space, consulting agreements are therefore appropriate, if entered into for appropriate reasons.
- The OIG pharma guidance should be used as the framework for structuring any agreements with physicians for advisory and consulting services- necessary services, reasonable payment for services rendered and reasonable motives for the arrangement. It is also relevant to consider who initiated the arrangement - was it the manufacturer in need of guidance or the physician looking for compensation .
- It is important to document the need, from a business and product development perspective, for the services being provided.
- In the current investigations, the agreements are "very rich", it is unclear if real or needed work is being done and the structure may result in unnecessary cases being performed or decreased quality of care (i.e. use of inferior products).
- There are significant concerns and focus on joint ventures and group purchasing organization arrangements in this space, as such arrangements may result in price inflation.
- It is acceptable to pay consultant physicians to advise colleagues, however, the key is that the interaction not be coercive or be used to influence P&T committees or the like.
These points provide helpful guidance in assuring that appropriate, necessary arrangements are not avoided due to the concerns raised by the investigations and that product development and advancement of innovative and important devices can continue.
Susan Berson of Mintz, Levin
