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William R. Petty, MD, completed medical school at the University of Arkansas and took his residency in orthopaedic surgery at the Mayo Clinic in the early 1970s. In 1985 he co-founded Exactech, Inc., where he currently serves as chairman and chief executive officer.

AAOS Now

Published 7/1/2007
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Peter Pollack

‘Bad eggs’ are giving surgeons a black eye

As both an orthopaedic surgeon and the chief executive officer of a medical device company that he cofounded, William Petty, MD, has a unique perspective on both the potential—and real—conflicts of interest that exist in the relationships between orthopaedic surgeons and industry. Dr. Petty, who currently serves as co-chair of the AAOS Corporate Advisory Council (CAC), recently shared his dual perspective on the issue during a CAC discussion (see related story, pg. 45) and later in an interview with AAOS Now.

A “black eye” for the profession
On the whole, Dr. Petty quickly points out, the orthopaedic community is highly ethical. Although he has come across a few of what he calls “bad eggs,” he believes that most of the current problems surrounding the conflicts of interest issue are based on a lack of knowledge rather than a lack of principle.

“Surgeons are concentrating on learning more about orthopaedics and taking great care of their patients,” says Dr. Petty. “They’re all very busy, and it’s understandable that many don’t have time to read up on all of the compliance issues.”

But compliance issues are significant—and noncompliance carries substantial penalties. An investigation by the U.S. Department of Justice (DOJ) into the relationship between a spinal device maker and surgeons resulted in a $40 million settlement over allegations that the company paid kickbacks to spinal surgeons through “sham” consulting agreements, royalty payments, and expensive trips. In 2006, the DOJ initiated an investigation into the financial relationships between orthopaedic surgeons and several orthopaedic device manufacturers, which is still ongoing.

“What most disturbs me about [the potential outcome of the DOJ investigation] is that—whatever the results are—it’s going to be a bit of a black eye,” says Dr. Petty. “Not just a black eye for the companies, but a black eye for orthopaedic surgery in general. I think it could even have an adverse affect on the physician-patient relationship. If patients read that surgeons have had illegal relationships witjh industry, they may then wonder if their surgeon has such a relationship, and if that relationship might adversely affect their care.

“We need to pay a lot of attention to be certain that we—the orthopaedic industry complex—understand the issues—what the public expects of us; what our laws say; what the ethical codes of the various organizations say,” continues Dr. Petty. “We must be able to say, ‘We believe and follow these ethical codes. We recognize that companies need to work with surgeons to make improvements for patients. But these collaborations must be done in an above-board, ethical manner.’

“As technology advances, and we see some of the improvements we can make, non-surgeons—as well as surgeon-scientists and surgeon-practitioners—must necessarily be involved with companies,” believes Dr. Petty. “It’s both a necessity and a real benefit for patients. The extent of it has raised the possibility of conflicts of interest to a higher and more visible level.”

Inappropriate relationships
When AAOS Now asked Dr. Petty if, as a business person, he has met surgeons who try to push the boundaries of what is considered an appropriate relationship, he is unequivocal in his response. “Absolutely,” he replies. “We’ve had surgeons say to us or to our representatives—even when we were just giving them a presentation about using our product—things like, ‘Now, what’s in it for me?’ That’s inappropriate.

“I’ll give you another example,” he continues. “A company approaches a surgeon to discuss a consulting relationship. Perhaps the surgeon has a particular expertise that the company would like to tap to help improve a product. It doesn’t have to be a major consultation; it could be a very small thing. It’s just as inappropriate for the company to offer the surgeon a consulting fee that is out of proportion to the services the surgeon would provide as it would be for the surgeon to hand over his business card with a dollar figure on the back and say, ‘This is what it’ll take to work with me.’

“Most orthopaedic surgeons want to do the right thing, but they may have heard that so-and-so down the road has such-and-such a deal, and therefore they think that the deal they’re proposing is okay,” says Dr. Petty. “Well, there are two possibilities: The deal down the road may not be okay; or the doctor considering it may not have any idea what that other doctor is doing to earn those consulting fees or royalties or whatever.”

Industry responsibility
Dr. Petty clearly believes that industry and surgeons share the responsibility for addressing conflicts of interest. Relationships may have arisen prior to the creation of the various specific laws and guidelines addressing industry-physician relationships that are not now considered appropriate. These laws and guidelines provide for the needed legitimate work that surgeons provide to industry and if followed, avoid unethical relationships while providing patient benefit.

In an attempt to self-regulate before the government imposed regulations, both the pharmaceutical and medical device industries have recently developed codes of ethics. (The PhRMA Code on Interactions with Health Care Professionals was introduced in 2002 and the AdvaMed Code of Ethics on Interactions with Health Care Professionals in 2003.) Since the introduction of these codes, many companies have developed their own ethical codes, added compliance officers, and developed educational programs for their sales forces.

“I believe that most manufacturers have become more disciplined in their approaches with surgeons who serve as consultants, speakers, designers, or in other roles,” says Dr. Petty. “I know surgeons whose consulting relationships with manufacturers have been severed, because there was concern about their appropriateness.

“I believe industry has a responsibility to be ever rigorous in this area and to uphold high legal and ethical standards,” he continues. “I suspect that the DOJ investigation will indicate that problems existed, and will stimulate more education and better compliance within industry. Because any penalties are likely to be assessed against the manufacturers and not surgeons, surgeons may not realize how severe the penalties against them could be. Health care providers who participate in financial arrangements deemed to be illegal by the authorities could be subject to substantial [financial and civil] penalties, should the government choose to assess them.”

Education is the solution
Dr. Petty believes that most surgeons have high ethical standards and high integrity. “I am concerned that many surgeons simply don’t understand the implications of what the rules are, and that’s why surgeons, along with all industry representatives, need to be educated about conflicts of interest.”

To address the problem, he advocates educating both surgeons and industry professionals about what constitutes an ethical relationship. He sees measures such as the recently approved AAOS Standards of Professionalism Regarding Orthopaedist-Industry Conflicts of Interest as a strong step in the right direction.

“I think education in these areas is very important,” he says. “Orthopaedic surgeons want to make a contribution to better patient care if they can. They want to do it in the right way; they want to maintain both their personal integrity, as well as the integrity of orthopaedics in general. The mistakes are made when they don’t understand.”

Although companies can help educate orthopaedic surgeons, says Dr. Petty, “it will take a lot longer to educate them one-by-one as we happen to come into contact with them, than it would if an educational program existed for orthopaedic surgeons—or for that matter, for physicians in general. For orthopaedists, I think the AAOS is very well suited to conduct such a program.

“My personal opinion,” concludes Dr. Petty, “is that it’s incumbent on the Academy to be sure that all fellows understand the Standards, because of the adverse actions that can result from not following them. I also think that, because of the respect a fellow has for the Academy, he or she will listen.”

A PDF file of AAOS Standards of Professionalism: Orthopaedist-Industry Conflicts of Interest can be downloaded from the Web at: http://www3.aaos.org/profcomp.pdf

A PDF file of the Advamed Code of Ethics on Interactions with Health Care Professionals can be downloaded from the Web at: http://tinyurl.com

The PhRMA Code on Interactions with Health Care Professionals can be downloaded from the Web at: http://www.phrma.org/Code.pdf

Peter Pollack is a staff writer for AAOS Now. He can be reached at ppollack@aaos.org