Medtech Insight: global medical technology news & analysis
QUOTED. 6 February 2020. Andrew Newland.
06 Feb 2020
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Total reported spending on physicians by major medical device manufacturers neared the $1bn mark in 2017 based on a Medtech Insight analysis of the latest updates to the US Centers for Medicare and Medicaid Services Open Payments database.
The 2010 Affordable Care Act required that companies report payments to physicians and teaching hospitals each year, and further ordered CMS to compile the data and post it online to the public Open Payments database annually. The agency released the 2017 data set late last month.
CMS groups the payments into two categories. The first, general payments, includes the money companies gave physicians in the form of royalties and licenses, consulting fees, grants, travel and food expenses, and compensation for services such as instruction during continuing education sessions. The second, research, covers costs such as recruiting patients for clinical trials. For this analysis, we looked at spending of the top 40 medtech companies, by sales, according to the MTI 100.
The 20 medical device companies with the highest spending on general physician payments spent a total of $690.9m, up from $667.17m in 2016. At the top of the list was Zimmer Biomet Holdings Inc., which spent $109.98m on physician payments last year. Other big spenders included Medtronic PLC ($104.44m); Johnson & Johnson ($97.79m); Stryker Corp. ($68.83m); and Boston Scientific Corp. ($54.69m). (See Figure 1.)
In 2016, the top five spenders were Medtronic, Zimmer, J&J, Stryker and Smith & Nephew PLC. Zimmer and Medtronic switched places as first and second this year, while Smith & Nephew dropped to seventh place thanks to significant spending increases by Boston Scientific and Edwards Lifesciences Corp..
MTI included DePuy Synthes and Ethicon in the J&J listing. If listed alone, DePuy’s $73.63m in general spending would have ranked third.
Figure 1
CMS Open Payments Database
Where exactly the money went varied from company to company, though royalties and licensing fees made up a significant piece of the pie at most of the larger firms. (See Figure 2.) For example, top spender Zimmer Biomet spent $54.56m on royalty and licensing fees for physicians. The company also spent $12.1m on physician consulting and $3.35m on travel and lodging.
Medtronic spent a similar amount – $53.06m – on royalties, but also spent $19.97m on compensation for "services besides consulting." The company also spent the most on travel, lodging and food for physicians, totaling $19.2m.
The graphic below includes a closer look at spending by the top five companies on the general payments list.
Figure 2
CMS Open Payments Database
Research spending by the top 20 firms was up from 2016, going from $221.21m that year to $258,276,707.87 in 2017. Roche topped the list at $67.98m in research spending, dwarfing the $3.06m the company spent in general payments. While the company topped the research list, it was only 20th on the general spending list. (See Figure 3.) The bulk of Roche’s research spending came from the company’s molecular diagnostics group, which paid physicians $53.67m.
The company reporting the second-most research spending was Medtronic, at $51.52m. Also in the top five for reported research spending were Edwards ($30.83m); Abbott Laboratories Inc. ($24.18m); Boston Scientific ($18.08m); and Johnson & Johnson ($10.34m).
Figure 3
The rankings show some interesting differences. For example, top general spender Zimmer was seventh on the research list, reporting $7.44 in research spending – only about 7% as much as the company spent on general physician payments. And while Abbott ranked third for research spending, its $34.99m in general payments placed the company ninth on that list.
Most companies in the data set showed higher general-purpose spending than research payments. Exceptions to that rule included tech-heavy companies like Roche Diagnostics, GE Healthcare and Philips Healthcare.
Two companies in the MTI top 40, Danaher Corp. and the Getinge AB, were not listed on the Open Payments database. Three others – B. Braun, Shimadzo Precision Instruments, and Thermo Fisher Scientific – did not report any research payments.
From the editors of The Gray Sheet
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