Posted On: May 1, 2014 by Patrick A. Malone

UCLA Settles Whistleblower Lawsuit Over Conflict of Interest

Later this year, the Physician Payments Sunshine Act takes full effect. It’s part of the Affordable Care Act (ACA, or “Obamacare”), and requires public disclosure of financial relationships between health-care companies and physicians. (See our blog, “Which Doctors Line Their Pockets with Big Pharma Money?.”)

Clearly, it’s overdue. One example why is last week’s settlement by UCLA, whose orthopedic surgery department agreed to pay $10 million to its former chairman. Dr. Robert Pedowitz had sued the University of California system, alleging that its premier medical school allowed doctors to accept payments from the medical device industry that might have compromised patient care.

As explained in the Los Angeles Times, the settlement was reached just before closing arguments were set to begin.

Pedowitz, a surgeon, had been recruited in 2009 to run UCLA’s orthopedic surgery department. He sued in 2012, saying university officials, regents and fellow surgeons failed to act on his complaints about widespread conflicts of interest and later retaliated against him.

During the trial, Pedowitz testified that he was concerned about colleagues who had financial ties to medical device manufacturers and other companies, because such relationships could influence patient care and/or medical research. The best care, and the best research, is objective; it can’t be colored by what the practitioner gets out of it.

Pedowitz also claimed that UCLA allowed potential conflicts of interest because of the potential financial benefit from the medical products or drugs developed by its staff.

Commenting on the lawsuit’s outcome to the L.A. Times, Susan Chimonas, associate director of research at Columbia University's Center on Medicine as a Profession, said some medical schools “can be dependent on the money these big-earning specialties like orthopedic surgery bring in. They are the cash cows and they can set their terms. This is not the first time I've heard of medical schools having policies that are not well enforced."

The case brought to light one UCLA orthopedic surgeon who had received $250,000 in consulting fees from Medtronic, which makes products including Infuse. It supposedly promotes spinal bone growth but, as we wrote last year, involves a risky procedure that isn’t proved to be superior to other spinal treatments.

At trial, Pedowitz testified that he was concerned that the surgeon was trying to enroll patients in a research study involving Medtronic while he was accepting its money. "I saw this as an obvious problem," Pedowitz testified.

The surgeon, Dr. Nick Shamie, testified that he had followed university policy, and hadn’t pursued the study because finding patients had been too difficult.

His wasn’t the only doctor-manufacturer relationship highlighted in the case. And even before Pedowitz joined the university, it had been criticized by Congress after another top spine surgeon failed to report nearly $460,000 in payments he had received from Medtronic and other medical companies while researching their products' use in patients, according to government records.

Several patients, according to The Times, are suing that doctor, Jeffrey Wang, and UCLA for negligence, fraud and malpractice in connection with surgeries involving Medtronic's Infuse bone graft. Wang is no longer with UCLA.

The Pedowitz settlement terms include his departure from the UCLA faculty; in 2010, he had stepped down as department chairman after expressing his concerns to UCLA officials. He filed a whistleblower retaliation complaint in 2011.

Mark Quigley, the attorney who represented Pedowitz, said the lawsuit wouldn’t have been filed had the UC system enforced its own policies. "What good are all the policies if they protect the wrongdoers and fail to protect the actual whistleblower?" he asked.

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