In the Wake of the DOJ Settlement, an Orthopedics Industry Split?
When the news came last fall that the five largest orthopedics companies and the US Attorney's office in New Jersey had come to a $311 million settlement following a nearly three-year old investigation into financial and consulting arrangements between those companies and orthopedic surgeons, industry executives across the board, from big and small companies, cheered. But now, just six months after the announcement, the settlement itself has given rise to some controversy and, more importantly, to a potential rift between large and small companies as follow-up efforts to create a more permanent solution have been introduced.
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A look back at the biggest devices stories of the decade, in capsule form.
The push for transparency in the health care industry has moved beyond initial regulations focused on hospital safety disclosures and is now taking on longstanding marketing practices by manufacturers. This time, money trails are the focal point, and if medical device manufacturers start to feel as if someone is spying over their shoulders, it may be more than paranoid imaginations at work. A growing list of regulations and "codes of conduct" are popping up with guidelines for any type of gratuity passing from manufacturers to physicians or hospitals. These new laws and rules are meant to be stringent and they will impact every manufacturer in the device industry.
Looking back at 2007, the performance of the medical industry seems strong, from blockbuster M&A to a better-than-expected result of a years-long DOJ investigation into the orthopedics industry. Even Boston Scientific seemed finally to be turning the corner. Drug-eluting stents (DES) got a second chance as data presented from several trials showed better mortality than with bare-metal stents. Venture capitalists poured even more money into device start-ups, both young and old. The confidence shown by venture investors was, not surprisingly, reflected in an IPO market that appeared to continue its recent rebound. But there are also some concerns: company consolidation, increased safety concerns and litigation revolving around physician-manufacturer relationships are causing some to wonder how long the foundation on which the industry's strong showing of recent years can sustain.