Charities Tied to Doctors Get Drug Industry Gifts
- From: "Roman Bystrianyk" <rbystrianyk@xxxxxxxxx>
- Date: 10 Aug 2006 09:24:51 -0700
REED ABELSON, "Charities Tied to Doctors Get Drug Industry Gifts", New
York Times, June 28, 2006,
As she presented research results indicating that a new medical device
was "an important breakthrough," the doctor's enthusiasm was clear.
Less evident were some of the financial links between the researchers
and the device's maker.
Dr. Maria Rosa Costanzo, making her presentation at a March conference
of cardiologists, said the study found that a $14,000 blood filtering
device was better than intravenous diuretic drugs at removing excess
fluid from patients with heart failure.
Although outside researchers raised questions about the study's
conclusions, the doctor betrayed little doubt. "We believe these
results challenge current medical practice and recommendations," said
Dr. Costanzo, who predicted many patients might benefit.
Dr. Costanzo did disclose to the audience that she was a paid
consultant with stock in the device's maker, a Minnesota company called
CHF Solutions. But she omitted another potentially important detail:
CHF Solutions was also one of the largest donors to the nonprofit
research foundation that had overseen the study. The company
contributed about $180,000 in 2004, according to the foundation's
federal filings.
Nor did she note that the nonprofit entity, the Midwest Heart
Foundation, was in turn an arm of the thriving for-profit medical group
outside of Chicago where Dr. Costanzo and more than 50 of her fellow
doctors treat heart patients - in many cases using products and drugs
made by CHF Solutions and other big donors to their charity. Although
the CHF Solutions device has generally been slow to catch on,
physicians at Dr. Costanzo's medical group have treated many patients
with the company's filtration system.
The Midwest Heart Foundation, and the way it has become quietly
interwoven into its doctors' professional lives, is far from unique.
Around the country, doctors in private practice have set up tax-exempt
charities into which drug companies and medical device makers are, with
little fanfare, pouring donations - money that adds up to millions of
dollars a year. And some medical experts see that as a big problem.
The charities are typically set up to engage in medical research or
education, and the doctors involved defend those efforts as legitimate
charitable activities that benefit the public. But because they operate
mainly under the radar, the tax-exempt organizations represent what
some other doctors, as well as regulators and industry consultants, say
is a growing conduit for industry money. The payments, they say, can
bias the treatment decisions of physicians, may lead to suspect
research findings and at times may even risk running afoul of
anti-kickback laws.
Federal officials are starting to take notice of such tax-exempt
charities, which critics say are becoming increasingly popular as other
forms of industry support to physicians - like lucrative consulting
agreements that involve little actual work - have come under scrutiny
from regulators and others worried about the potential conflicts.
The potential for abuse by these charities is clear, critics say. "It
obviously sets a fertile ground for conflict of interest and misuse of
funds," said Dr. Robert M. Califf, vice chancellor for clinical
research at Duke University Medical Center.
The charities at issue are not philanthropies like the Bill and Melinda
Gates Foundation that dispense grants for medical research but remain
independent of any one group of doctors or medical practice. Instead,
the charities drawing scrutiny are set up by doctors in private
practice and are closely linked to those doctors' for-profit medical
groups.
The Midwest Heart Foundation, which has received millions of dollars
from medical industry donors, including the drug makers Amgen and
AstraZeneca, and the Cordis and Scios units of Johnson & Johnson, says
it stands behind its charitable work, which currently involves about 30
studies and dozens of doctor-education lectures each year.
Dr. Mark Goodwin, a managing partner for the Midwest Heart for-profit
practice, said the foundation was created to help prevent potential
conflicts by keeping the industry money separate from the doctors'
private practice. Companies contribute to the foundation, he said,
because they can rely on its research and the doctors involved can
enroll large numbers of patients in studies. "We are able to deliver
excellent research to our community in a timely fashion," Dr. Goodwin
said, "and we are proud of it."
But some of its research has drawn criticism from federal regulators.
Earlier this year, moreover, the foundation received a Justice
Department subpoena as part of an investigation into the marketing
activities of one of its big contributors, Scios.
Experts aware of the various doctor-run charities say that even if much
of the donated money is spent on legitimate medical research or
education, the funds can also go toward studies that while lending
prestige to the doctors and luster to the companies, may do little to
advance scientific understanding. The tax-exempt money also sometimes
flows to the for-profit medical groups affiliated with the charities,
sometimes covering business expenses or even paying parts of the
salaries of doctors.
Too often, the critics contend, the industry donations amount to a form
of "relationship funding" - to use one skeptical doctor's term - in
which companies hope to sell more drugs and devices by currying favor
with the doctors. That skeptic, Dr. John Cherf, is a knee surgeon at
the Neurologic and Orthopedic Institute of Chicago who also consults
for a market research firm specializing in health care topics. He says
the donor arrangements are fraught with potential conflicts of interest
and are likely to come under greater scrutiny as the costs of devices
and drugs rise.
"There's undoubtedly corruption in the system," Dr. Cherf said. "We
need healthy relationships between physicians and industry. Both
parties have been too aggressive."
Number of Charities Is Unknown
No one knows precisely how many of these doctor-run charities exist.
Although each one files with the federal government as a tax-exempt
entity, they are hard to discern among other health-related charities.
And because in many cases each has no more than a few hundred thousand
dollars in annual revenue, they tend to escape the attention of the
federal and state regulators who oversee charities.
"The reality of it is that these are small organizations that are off
the radar screen," said Douglas M. Mancino, a lawyer at McDermott Will
& Emery in Los Angeles who specializes in health care law and nonprofit
groups.
As long as the activities being financed benefit the public rather than
the doctors or companies involved, they are legitimate charities,
according to lawyers who specialize in nonprofits.
But concerns can arise when a corporate donation appears to be helping
pay the salary of an additional doctor at a for-profit medical practice
- through a fellowship, for example - that brings in additional
revenue to the practice. Another problem area, they say, would be when
donations go toward expenditures that would normally be part of the
practice's business cost.
Lawyers say that determining whether a charity's activities are
legitimate tax-exempt activities would typically require a close look
at the facts in each case.
"If they're really underwriting normal business expenses to the group,
then I think you have a problem," Mr. Mancino said.
As a group, these relatively obscure charities are attracting sizable
amounts of corporate money. And many of their activities focus on the
companies that have made the donations or the doctors' medical groups.
Consider the Arizona Orthopedic Education Foundation, which was created
by a surgeon in Phoenix and which in 2003 received a $200,000 donation
from a unit of the orthopedic device company Stryker. Most of the
charity's efforts are devoted to public education, according to the
founder, Dr. Anthony K. Hedley. But its activities also include
teaching other doctors how to use Stryker products.
Stryker said this training was "critical" for surgeons.
Dr. Hedley says the fact that he mainly uses Stryker devices with his
own patients may account for Stryker's contributions. "That was
probably why I was able to leverage support," Dr. Hedley said.
Another charity is the Blue Ridge Bone and Joint Research Foundation,
run by Dr. Joseph T. Moskal, an orthopedic surgeon in Roanoke, Va. It
received a $75,000 contribution from the DePuy Orthopaedics unit of
Johnson & Johnson in the year ended July 31, 2004, according to federal
filings. The Blue Ridge foundation appears to have paid $30,000 of that
money to the for-profit Roanoke Orthopaedic Center, where Dr. Moskal
practices, to defray the costs of a fellowship program there.
Dr. Moskal did not return repeated phone calls seeking comment. DePuy,
in a brief response to questions, said in part, "Fellowships are vital
to advance the education and training of orthopaedic surgeons."
Corporate donors are also major contributors to the Vascular
Specialists Education Foundation, which is led by a vascular surgeon in
Norfolk, Va., Dr. Marc H. Glickman. The foundation spent $30,000 in
2003 to pay for the further medical education of doctors in his
for-profit practice.
Although the public filings offer few details about the charity's
activities, Dr. Glickman said such expenditures are part of the
foundation's mandate, which includes offering fellowships to doctors
being trained and paying for continuing medical education for those
doctors. One of Vascular Specialists' two big donors, the device maker
Guidant, now part of Boston Scientific, said it contributed $25,000 in
2003 and $40,000 the next year, through its own foundation. The company
says the money was given with the understanding that it would go to
finance the group's fellowship program.
The other big donor, the device maker Medtronic, says it gave Dr.
Glickman's charity $80,000 last year to help pay for the group's
fellowship program. "Dr. Glickman and his colleagues have trained
hundreds of physicians and fellows on life-saving procedures associated
with vascular disease - a notable accomplishment," Medtronic said in
a written statement.
Donors have been so generous to Dr. Glickman's foundation that he says
it is currently sitting on $100,000 he has not yet decided how to
spend. "I'm very cautious with what I do," he said.
Whatever the issues of tax-exempt status among the various charities,
federal regulators say the groups could find themselves in trouble in
another way - in violation of federal anti-kickback laws - if
donations appear to be little more than a way for companies to funnel
money to doctors.
If the contributions amount to payments or gifts to doctors who then
use or recommend a certain drug or device, companies could be breaking
the law, said Vicki Robinson, a top lawyer in the Office of Inspector
General at the federal Health and Human Services Department.
"From a legal perspective, it's really no different," Ms. Robinson
said.
Patrick L. Meehan, the United States attorney in Philadelphia, whose
office has a long history of prosecuting health care fraud, said the
doctors' charities could warrant scrutiny. "What we would be concerned
about are end runs around the system," Mr. Meehan said. "We want to be
sure there is independent and fully informed medical judgment at the
heart of the physician-patient relationship."
For their part, Midwest Heart officials defend the activities of their
foundation. Contributions to the charity, which was created in 1988,
have more than doubled in the last few years - to $1.7 million in
2004, the most recent period for which federal filings are available.
In a written statement, the foundation said it had "strict internal
controls and systems in place to ensure the independence and integrity
of all research and education activities."
Questions About Research
Outside researchers have questioned some of the foundation's work. Some
doctors say the study of the CHF Solutions filtration device that Dr.
Costanzo presented in March may have been flawed, for example, because
heart failure patients who were given conventional diuretic drugs may
not have received enough medicine to provide meaningful comparisons.
One heart doctor critical of those findings was Dr. JoAnn Lindenfeld,
who was quoted in a cardiology publication, Heartwire, in March as
saying, "I wouldn't view these data as persuasive enough to use it
full-scale in a million patients a year with acute decompensated heart
failure." Dr. Lindenfeld did not dispute the accuracy of that quote but
declined to comment further.
Through the Midwest Heart Foundation, Dr. Costanzo declined to comment.
Both CHF Solutions and the foundation say she no longer has stock or
stock options in the company.
CHF Solutions said that most of its contributions to the Midwest Heart
Foundation covered the cost of conducting the research project that Dr.
Costanzo led and the company helped design.
John L. Erb, CHF's chief executive, said "we were very careful" in
designing the research, but he conceded that it was "not the perfect
study where we could answer all the questions."
Dr. Goodwin, at the foundation, said the research was only a starting
point. "We fully agree that further investigation is needed to validate
the findings and carry them forward to a larger number of patients," he
said.
Some of Midwest Heart's research has also fallen short of federal rules
governing clinical studies. In August 2004, the Food and Drug
Administration sent the foundation a warning letter about a study of a
new carotid stent - a device designed to open up a major artery in
the head and neck.
The F.D.A. said Midwest Heart had failed to get necessary approval
before beginning its research, which involved different types of stents
and 168 patient procedures. The regulators also found that some
patients were not properly informed and that the foundation was too
slow in reporting serious complications. The results of the study were
never published, although the foundation says they were submitted to
the F.D.A.
The shortcomings were simply "record keeping" issues, said Wendy
Landow, the chief executive of the Midwest Heart Foundation, who said
her organization had in fact received the necessary approval to do the
study but had poorly documented it. The issue has been resolved, she
said, adding that the foundation had adopted tighter procedures to
avoid future lapses.
A separate controversy surrounds the heart failure drug Natrecor made
by Scios, which gave the Midwest Heart Foundation a total of more than
$300,000 for the years 2003 and 2004, according to federal filings. The
Justice Department, which is investigating whether Scios improperly
marketed Natrecor, has issued a subpoena to the foundation.
Scios said that most of its Midwest Heart contributions went toward
educational programs that Scios had no influence over. It said it could
not comment on the Justice Department investigation. Midwest Heart said
it was cooperating with federal officials and had been told it was not
a target of the investigation.
Natrecor was approved by the F.D.A. in 2001 for use in hospitals for
patients only in an extreme, or decompensated, stage of heart failure.
But it also became heavily used by doctors who administered it
intravenously in outpatient clinics for periodic patient "tune-ups," as
they were sometimes known. Natrecor's enthusiasts included some Midwest
Heart doctors, who participated in studies of the drug and also used it
in outpatient settings.
While doctors can use federally approved drugs for any purpose they see
fit, a pharmaceutical company is prohibited from actively encouraging
such off-label uses.
A Debate Over Drug's Merits
In mid-2005, after researchers elsewhere published an article in a
scholarly medical journal raising concerns that Natrecor could
seriously impair kidney function, one of Midwest Heart's cardiologists,
Dr. Mitchell T. Saltzberg, continued to staunchly defend the drug. Dr.
Saltzberg, who has also been a paid Scios consultant, wrote to Medicare
officials in July 2005 to argue that the drug was being "unfairly
targeted."
Dr. Saltzberg's letter cited a study of Natrecor's outpatient use - a
study for which the foundation had provided some work - saying that
this research and "the body of anecdotal experience" indicated the drug
posed no kidney risks.
His comments to Medicare, though, came a few days after Scios itself
sent a safety alert to doctors warning against the outpatient use of
Natrecor. The Scios alert, issued in consultation with the F.D.A.,
relied on the findings of an expert panel that the company had asked to
look into issues involving the drug's safety.
The Scios alert referred to the very study Dr. Saltzberg had cited and
found it lacking. That study "was not powered to adequately assess the
effectiveness or safety of serial infusions of Natrecor," the alert
said. "The size of the study, its design and its findings provide an
inadequate basis to recommend the use of intermittent, serial or
scheduled repetitive infusions of Natrecor." Through the foundation,
Dr. Saltzberg declined to comment. Foundation officials, though, said
they agreed with the Scios panel's findings.
Outpatient use of Natrecor around the country has fallen precipitously.
Scios has said it plans to conduct further research into the drug's
safety.
The Midwest Heart Foundation said that only one of its patients, who is
part of a study, is still being given the drug as an outpatient. But
while the foundation says it believes more research is needed, Dr.
Goodwin also said that he believes that many doctors had positive
results with the drug and that he had seen it keep patients out of the
hospital.
"It worked great," he said.
.
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