April 18, 2024

Tipping the Odds for a Maker of Heart Implants

Within the last few years, a little known company called Biotronik has cornered the market on pacemakers and defibrillators at the University Medical Center of Southern Nevada, Last year, 250 of the 263 patients, or 95 percent, who had a heart device implanted at the hospital center got one made by Biotronik.

The company’s hold at the hospital center is all the more striking because its implants were not used there before 2008, and its national share of the heart-device market barely exceeds 5 percent, according to industry estimates.

The devices’ sudden popularity was apparently not left to chance. In mid-2008, Biotronik hired several cardiologists who implant heart devices at the Las Vegas hospital as consultants, paying them fees that may have reached as high as $5,000 a month, company documents reviewed by The New York Times indicate. Those doctors then did the rest. Meanwhile, the hospital’s chief executive said she never asked during the hospital’s switch to Biotronik whether those physicians had a financial connection to the company.

A federal investigation is examining Biotronik’s marketing and sales practices, according to a company e-mail. While a lawyer for Biotronik confirmed the inquiry, he declined to elaborate.

In recent years, payments to doctors from makers of drugs and medical devices have come under intense scrutiny because of concern that such ties can affect physician practices. Under last year’s federal health care law, companies like Biotronik will have to disclose by 2013 any payments to doctors for consulting and other services. But interviews and dozens of Biotronik documents that discuss the company’s sales tactics and doctor payments offer a portrait of how a company seeks to win business, and the eagerness of some doctors to serve in that effort.

In addition, the records provide a rare look at a central player in these types of transactions: the sales officials who promote implants by finding ways to flatter doctors or fatten their wallets.

In general, doctors and device makers describe themselves as partners in an effort to best serve the needs of patients. But privately, sales personnel at Biotronik and one of its distributors referred at times to physicians whom they courted with a tone akin to disdain. One sales official, for example, was said to hold “great influence” over a doctor. Doctors who failed to enroll patients in Biotronik-sponsored studies were put on a “loser” list, another document shows.

Yet another report offered this advice about winning one doctor’s attention: “He loves his white wine and being entertained.”

Executives of Biotronik, a German company whose American subsidiary is based in Lake Oswego, Ore., declined to be interviewed for this article, citing the ongoing Justice Department investigation. The company referred written questions to an outside lawyer, Christopher A. Myers, who declined to describe the federal inquiry, other than to say that the company has been told that it is a civil matter, rather than criminal.

A Justice Department spokesman said that it did not, as a matter of policy, confirm or deny the existence of an investigation.

Mr. Myers stated that Biotronik paid its consultants for legitimate services and at rates comparable to those of competitors. He added that Biotronik adhered to an industrywide code of ethics. “Biotronik is committed to maintaining a culture of compliance and ethics and has a robust and active internal compliance program,” he wrote. A heart device, which can cost up to $35,000, has among the highest profit margins of any medical product, and three big producers — Medtronic, St. Jude Medical and Boston Scientific — dominate the industry.

A New Competitor

Many of the records and e-mails reviewed involve a Biotronik distributor called Western Medical, a company that was founded in mid-2008 by Caesar Fonte, a former top sales official at Boston Scientific. In 2006, Boston Scientific entered the heart device business when it acquired the Guidant Corporation, the company where Mr. Fonte then worked. Several other Boston Scientific sales officials also left in 2008 to join him at Western Medical.

Once there, they sought to persuade doctors they knew from their days marketing Boston Scientific devices to switch to Biotronik. In the process, some doctors got Biotronik consulting deals.

Article source: http://feeds.nytimes.com/click.phdo?i=dcc72c60d3cdf359fb22152c1b9ac059

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