How do patients know if a doctor has been paid off?

When Army physician Timothy R. Kuklo was trying to get his study of Medtronic Inc.'s (MDT) Infuse bone-graft product published, he didn't say a word that he had received $800,000 from the medical-device maker over the previous three years, The Wall Street Journal reports.

To make matters worse, Kulko, now a professor at Washington University in St. Louis, allegedly forged the names of his Walter Reed Army Medical Center colleagues in his paper, which was published in the Journal of Bone and Joint Surgery, the newspaper said.

This sort of thing is not supposed to happen. Last year, the medical-device industry tightened its ethical standards, forbidding companies from giving "educational gifts" worth more than $100, except for medical textbooks and anatomical models. Companies are expected to certify their compliance annually.

"The move comes as federal and state governments, physician groups and universities are clamping down on potentially unethical inducements by restricting, or at least making more transparent, industry-doctor financial relationships," The Gray Sheet, an industry site, says.

Medtronic, whose shares have risen 6 percent this year, says it does not offer incentives to physicians to implant particular devices to which it holds royalties. The company says it didn't fund Kuklo's study nor collect the data, and that it's also not using the data to seek regulatory approvals. Kuklo, who has been associated with the company since 2001, is on inactive status.

But medical-device and drug companies do pay "leading" physicians in various specialties with the aim of influencing doctors' peers. Some physician groups urge their members not to take industry payments, arguing, according to The New York Times, that such payments "create conflicts of interest, threaten the integrity of their missions and their reputations, and put public trust in jeopardy."

To curb financial conflicts of interest, the American Psychiatric Association this year ended the practice of letting drug companies sponsor medical-education seminars and meals at its annual meetings. Sen. Charles Grassley (R-Iowa) has criticized some prominent psychiatrists for failing to disclose conflicts with drug companies.

But keeping tabs on these relationships will be difficult, because there are so many of them. "The FDA can't police all of these things," says Tommy Malone, an Atlanta attorney who heads the American Board of Professional Liability Attorneys, in an interview with DailyFinance. "They would tell you they don't have the manpower."

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