-- Attorney General Anne Milgram and Division
of Law Director Robert Gilson announced today
that the State has entered into a settlement
agreement with medical device maker Synthes,
Inc. that resolves allegations Synthes failed
to disclose financial conflicts-of-interest
among doctors who conducted clinical testing
on its products.
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.
in West Chester, Pa., Synthes is known principally
for its work in 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.
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.
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,” said Milgram.
“All patients – but especially
those considering high-risk devices such as
spinal disc replacements -- deserve honest,
objective clinical trial information about
the products available.”
said the Synthes agreement should serve as
a template for the entire industry.
In a letter to the federal Food and Drug Administration
(FDA) sent today, 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
In addition, Milgram said her office issued
subpoenas today to five major medical device
manufacturing companies seeking information
about their business practices.
device makers have a duty to make certain
that clinical trial results are accurate and
unbiased,” the Attorney General
said. “In creating these financial
incentives for doctors, Synthes and the rest
of the industry have done the exact opposite.
Going forward, if the industry will not address
this problem voluntarily, we most certainly
Milgram described the Synthes settlement as
the first of its kind because of its disclosure
provisions, as well as its ban on compensating
clinical researchers with company stock. She
said the latter provision runs counter to
widespread industry practice – a practice
she called unacceptable.
Currently, she said, many clinical investigators
stand to profit significantly if the trials
in which they are involved are successful.
Often, she explained, these financial interests
are not disclosed to the public -- including
the human subjects participating in the trials
and the patients who rely on the devices.
was developed by a start-up company known
as Spine Solutions Inc. A New York investment
firm, Viscogliosi Brothers, helped found Spine
Solutions and financed the disc’s development
and research. The Viscogliosi Brothers offered
the ProDisc clinical investigators substantial
investment opportunities in Spine Solutions,
as well as consulting contracts that included
gifts of company stock and stock options.
Synthes, Inc. bought Spine Solutions in 2003
and failed to fully disclose these conflicts
of interest to the FDA. FDA approved Synthes’
applications for pre-market approval of ProDisc,
even when the financial conflict disclosures
were plainly inadequate.
her letter to the FDA, Milgram took the agency
to task for its lax handling of the Synthes
example, she noted, a number of disclosure
forms contained in the Synthes submission
to FDA were signed and dated, but were otherwise
left blank. Other forms indicated that clinical
investigators had significant equity interests
in the Synthes product they were testing,
but offered no details.
failure to adequately disclose “should
have been obvious from even a cursory review
of its FDA submissions,” Milgram
wrote, yet the FDA “did nothing”
and ultimately approved Synthes applications
for pre-market approval without delay or further
inquiry into the apparent conflicts.
In announcing the Synthes settlement today,
Milgram said it is vital that, nationwide,
the medical device manufacturing industry
change the way it approaches clinical testing.
cannot allow financial conflictsof-interest
to infect the clinical trial process. It is
a betrayal of the public trust, and has the
potential to jeopardize patient well-being,”
Under terms of the settlement, Synthes, Inc.
has agreed to publicly disclose – on
its Web site – any financial relationships
with doctors conducting its clinical research
trials. The company has also committed to
disclosing such financial conflicts-of- interest
to the research institutions that serve as
clinical trial locations, and to the FDA.
disclosure is not required by the FDA, but
it should be,” said Milgram.
terms of the settlement Synthes, Inc. has
Prohibit compensation of clinical investigators
tied to the outcome of the clinical trial
Pay clinical investigators “fair market
value compensation” for their clinical
trial work, as well any other consulting
services they provide to the company
Collect information on financial interests
from clinical investigators
Create a Financial Interest Information
Database that will record all relevant financial
interests related to clinical investigators
Disclose all financial interests of all
clinical investigators on the company’s
Provide complete disclosure of financial
interests to the FDA and conduct reasonable
due diligence to insure that the disclosures
are complete and accurate
Disclose all financial interests directly
to health care facilities serving as clinical
Provide Financial Interest and Disclosure
training to employees.
are committed – as evidenced by our
investigation of Synthes – to doing
everything within our power to ensure fairness
and transparency in the clinical trial process.
We call on the FDA to become more aggressive
in this regard, and we call on medical device
makers themselves to publicly disclose information
concerning who has a financial stake in the
devices being tested,” said Milgram.
things stand,” Milgram added,
“the public often has no knowledge that
a ‘clinically tested and recommended’
medical device was evaluated and endorsed
by people with a financial stake in seeing
it sell. This is simply wrong and it must
The Synthes agreement pertains to all ongoing
and future clinical trials, except for those
conducted outside the U.S. and not intended
for use in the marketing of products in this
addition to the other settlement terms, Synthes
will pay the state a total of $236,000 as
reimbursement for fees and costs related to
Synthes case was handled by Deputy Attorney
General Megan Lewis, Chief of the Division
of Law’s Affirmative Litigation Section,
and Deputy Attorney General Michelle T. Weiner.