The money and attention were well spent. After two hundred members of the House and Senate from both parties wrote to Medicare questioning the proposed cutbacks, its top administrator, Mark McClellan, said he had taken the objections “to heart” and essentially gutted the plan, making changes that in the estimation of AdvaMed, recaptured $3 billion in at-risk sales revenues. Shares of Medtronic, St. Jude Medical, and Boston Scientific rose on the news.
Business as usual continued, and money continued to flow and drip from device companies to cardiologists. In 2007—the year that my father forgot the purpose of his dinner napkin—a registered nurse named Charles Donigian resigned from his job in the regional sales office of St. Jude Medical in St. Louis, Missouri, where he’d helped administer follow-up surveys of patients who’d been given pacemakers and defibrillators. Donigian said he resigned because he thought he’d soon be fired for refusing to bend ethical rules. He subsequently filed a lawsuit seeking damages under the federal law that protects whistle- blowers.
In his suit, which the Justice Department later joined, Donigian said that St. Jude had essentially paid kickbacks to doctors who chose its products, in the form of what he called “sham fees for phony postmarket clinical research studies.” In one study, St. Jude paid the doctors $2,000 per enrolled patient. The doc-tors mainly provided the names, Donigian claimed, while he and others at St. Jude did the paperwork as well as the doctors’ Medicare billings.
St. Jude salesmen also gifted doctors with fishing trips to Canada, tickets to St. Louis Cardinals games, airline tickets to Las Vegas, and dinners at steak houses, Donigian said. One sales representative, he said, had an expense account of $250,000 a year, mainly to entertain and reward cardiologists. The corruption went both ways: one cardiac catheterization lab, he claimed, told St. Jude sales reps they expected a catered lunch for the entire office each time they implanted a St. Jude product.
Donigian said that St. Jude employees ghostwrote two research presentations summarizing the results of one cardiac follow-up study (the RARE trial), and paid one of the doctors named as a lead investigator to travel to the annual meeting of the Heart Rhythm Society, the cardiac device specialist’s group, and present the findings in a scientific poster session in the exhibit hall as if they were his own.
Donigian said that St. Jude planned to spend $158 million on educational and career guidance programs for “fellows,” young cardiologists training in electrophysiology, the subspecialty that manages cardiac devices. An internal marketing document estimated that each of the one hundred fellows who became a full-fledged electrophysiologist and conservatively prescribed St. Jude products could generate $2.7 million in device sales a year. After the Justice Department joined the case, St. Jude, without admitting wrongdoing, settled the lawsuit in early 2011 for $16 million, of which Donigian received $2.6 million. The Code of Business Conduct on the St. Jude Web site states that sales- people’s gifts to doctors should not be “extravagant” or “beyond that which is customary,” but those terms are not defined.
In 2008, a year after Donigian quit, the American College of Cardiology, the Heart Rhythm Society, and the American Heart Association issued the latest update of their treatment guidelines for pacemakers. The list of diagnoses for which they were strongly or mildly recommended had grown since the guidelines were first issued in 1984. The 1984 guidelines recommended pacemakers for fifty-six heart conditions. The 2008 guidelines recommended them for eighty-eight. The research backing the expansion was weak, with only 5 percent of the positive recommendations backed by medical research’s “gold standard”: multiple randomized double-blind studies. Most were based only on a consensus of “expert opinion.” Of the seventeen cardiologists who wrote the 2008 guidelines, eleven received financing from cardiac-device makers or worked at institutions receiving it. Seven, due to the extent of their financial connections, were recused from voting on the guidelines they helped write.