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Doctor-Owned Firms Raise Ethical Issues

Do small doctor-owned medical device companies present an elevated risk for doctors' putting financial interests ahead of treatment decisions? Legislators, clincians, and members of industry are pondering that question these days. The Orange County Register has an extended look at the issue, focusing on Allez Spine LLC, a maker of spinal hardware that is one of eight doctor-owned firms being targeted by a U.S. Senate committee investigation.

The committee is considering drafting legislation that would require small companies to disclose financial ties to doctors who use their products. A current disclosure bill does not apply to firms with less than $100 million in annual revenues. Dr. Charles Rosen, founder of the Association for Ethics in Spine Surgery, says the risk is very real. "This is an incentive for over-utilization of implants and procedures, as well as limiting patient choice to one manufacturer of products that may not be the one best for the patients," he told the Register. AdvaMed, too, has come out on the side of forcing small doctor-owned companies to provide full disclosure. It believes the rules should apply equally to all companies. But the article also speculates that AdvaMed's position may be a result of concern over the doctor-owned companies copying large firms' designs and selling them more cheaply. Dr. Ram Mudiyam, one of Allez' physician shareholders, believes the issue is overblown. He told the Register that not one patient has declined to proceed with treatment when he has disclosed that he is going to use an Allez product and that he has a financial stake in the company. In fact, he said, several of them have expressed confidence because he helped design the product. This is why we need full disclosure. I have long argued that, in contrast to what politicians, lobbyists, academics, and other opinion leaders think, most patients will not react to news that their doctor has financial ties to a treatment with horror -- and may in fact be more comforted if the doctor was involved in the design. But they should be informed in case they are in the minority that does care, and so that critics won't have anything more to complain about.

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