Under settlement agreements made with the US Attorney General of New Jersey (Department of Justice, or DOJ), five orthopaedic device makers agreed to accept the appointment of federal monitors and to comply with specific reforms mandated by the federal government. The DOJ had been investigating relationships between the device makers and orthopaedic surgeons.

Criminal complaints were filed against four of the hip and knee implant manufacturers (Biomet Inc., DePuy Orthopaedics, Inc., Smith & Nephew, Inc., and Zimmer, Inc.), charging that the implant manufacturers used lucrative consulting arrangements with orthopaedic surgeons as inducements for the surgeons to use a particular implant manufacturer's implants. Under the terms of the Deferred Prosecution Agreements, these complaints will be dismissed in 18 months, if the implant manufacturers comply with the agreed-upon reform requirements. The four implant manufacturers also reached civil settlements with the DOJ and the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which included both fines and a 5-year Corporate Integrity Agreement, mandating additional reforms and monitoring.

Stryker was not charged and was allowed to enter a Non-Prosecution Agreement, but it will be monitored and must implement the same reforms as the other implant manufacturers.

In addition to fines, the Agreements require the following:

• The five device makers will conduct needs assessments to determine reasonable needs for educational consulting services and new product-development consultants.
• All new consulting agreements will require physicians to disclose their financial engagements with any implant manufacturer to their patients and affiliated hospitals.
• On October 31, 2007, the device makers prominently feature on their Web sites the names of all consultants who provided services or received payments in 2007, their city and state, and the amount paid in $25,000 increments. In late November 2007, the implant manufacturers will post the names of consultants, their city and state, and the value of payments made in other than dollar form. These lists will be updated quarterly throughout the 18 months of the agreement.

• "Consulting agreement" include agreements for compensation, honoraria, fellowships, professional meetings, teaching, publications, clinical studies, fee-for-service consulting, product development and license agreements, research, and professional services agreements, as well as agreements to provide grants, donations, sponsorships and other forms of payment to medical educational organizations, medical societies and training institutions.
• "Payment" includes "any and all compensation or remuneration" paid to consultants, including "meals, entertainment, travel, gifts, grants, honoraria, charitable contributions, donations, sponsorships, research grants, clinical studies, professional meetings, product training, medical education, research funding, product development services, in-kind services (eg, use of aircraft), advertising, promotion and marketing expenses or support, and royalties or other payments for transfer of documented intellectual property."

Each of the implant manufacturers pledged to work with the independent monitors and to institute and review compliance practices and procedures.

On Wednesday November 1, 2007, AAOS President James H. Beaty, MD, sent a letter to members and fellows of the AAOS, responding to the disclosures made by five implant manufacturers of the names and certain financial information about physicians with whom the manufacturers had a financial relationship in 2007. The disclosures are part of a settlement with the US Attorney for New Jersey (US Department of Justice or DOJ) to resolve allegations that certain compensation provided by these implant manufacturers to physicians created a conflict of interest in using the implant manufacturer's medical devices.

AAOS President James H. Beaty, MD, describes the settlements entered into between teh DOJ and five orthopaedic hip and knee implant manufacturers, as well as the ongoing efforts by AAOS to assist orthopaedic surgeons in conducting ethical relationships with industry partners with the goal of providing and enhancing patient care.

Under an agreement reached with the DOJ, the five implant manufacturers under investigation-Zimmer, Inc., DePuy Orthopaedics, Inc., Biomet Inc., Smith & Nephew, Inc., and Stryker Orthopaedics, Inc.-agreed to accept the appointment of federal monitors and to comply with specific reforms mandated by the federal government. In addition, the implant manufacturers paid a total of $311 million in fines.

Most of the current problems surrounding the conflicts of interest issue are based on a lack of knowledge rather than a lack of principle.

AAOS Bulletin, June 2005.

Stuart L. Weinstein, MD, Then President of AAOS, responds to media reporting on relationships between orthopaedic surgeons and industry.

AAOS Bulletin, June 2005.

Jeanne L. DelSignore, MD, Then Chair, AAOS Ethics Committee, discusses the ethical dilemmas inherent in relationships between orthopaedic surgeons and industry and steps the AAOS has taken to provide guidelines for appropriate management of those relationships