①Ask your doctor: Who sponsored this clinical research?

Jun. 17, 2020, 12:00 AM.

In Korean medical scene, pharmaceutical and medical implant companies offering kickback and entertainment to doctors and other medical staffs has been a long-standing practice like chronic diseases.

In 2010, the so-called "kickback double punishment system," which penalizes not only kickback giver companies but also those receiving medical staff, has been legislated. Since then, the pharma and medical implant industries have established and operated autonomous conventions by setting ceilings and standards for acceptable financial support. However, as such protocol came in practice, the once-blatant kickback started hiding to the darker side with more sophisticated methods.

Since 2018, the Korea Center for Investigative Journalism(KCIJ)-Newstapa has been tracking irregularities involving kickbacks in the medical device industry. This time, KCIJ-Newstapa delved into the advanced kickback-giving methods in the industry through the case of Genoss, a home-grown coronary stent manufacturer.

▲ A stent is a medical implant that helps blood flow by expanding blood vessels or organs that were previously narrow due to clogged fat or waste. It is classified as a fourth-grade medical device due to possible high risks that may have on a patient.

Genoss, a medical device company with annual sales of about KRW 27 billion (USD 22.7 million), develops and manufactures products like coronary artery stents, balloon catheters and connectors, which are considered the most high-risk ones among medical devices.

According to Genoss’ internal documents obtained by KCIJ-Newstapa reporters, the company's salespeople have already commissioned hospitals to conduct clinical trials of their products, which already have been approved by the Ministry of Food and Drug Safety, as a strategy to pioneer and expand the market.

Genoss has conducted clinical trials in 40 major hospitals across the country. Genoss paid each hospital clinical trial funding worth about KRW 400,000 to 500,000 (USD 337 to 421) per each patient.

Clinical trials became a tool of kickback and sales promotion

Clinical trials of medical devices, which already obtained the approval of the Ministry of Food and Drug Safety(MFDS), are usually conducted to compare the same product of different brands. Unlike such practices, Genoss asked hospitals to conduct a clinical trial only with its stents. It requested cardiologists at the nation’s major hospitals to use the Genoss brand stents to patients and monitor their progress.

A cardiologist at a university hospital and a medical device researcher who KCIJ-Newstapa seeked advice both said that although medical devices that have already been approved by the government, the devices need post-approval clinical trials. They explained that such trials allow companies to find unexpected adverse events and improve them by observing the progress of patients.

Without such clinical trials like Genoss’, there would have been no other opportunities for post-approval research for local device makers, they said. Such simplistic, observational trials would have been one of few available options to prove product effectiveness or safety for the Korean companies, unlike transnational companies that can conduct reliable clinical trials thanks to abundant financial resources and a big pool of patients, they added. However, the two experts emphasized that the clinical trials should be carried out properly by following the principles.

About 60,000 Koreans get stent implants in the coronary arteries every year. In 2019 alone, more than KRW 110 billion was spent from the national health insurance and patients' pockets altogether.

However, in the local coronary artery stent market, which has been long dominated by three global medical device companies, it has been very difficult for the latecomer Genoss to pioneer and expand its share. Genoss was even selected as the Korean MInistry of Health and Welfare’s ‘local medical devices research and development sponsoring project,’ an initiative to accelerate localization of medical devices.

However, KCIJ-Newstapa found that Genoss used research to sell its product by asking cardiologists at major hospitals to do clinical trials on its brand stents.

▲ Medical device makers can request doctors to conduct clinical trials to monitor the effectiveness or safety of their products, even if the products were already approved by the government. For such a trial, the companies wire research funds to the doctor through the hospital he belongs to.

As the doctor and hospital mobilize more patients by implanting Genoss brand stents, the amount of funding from Genoss increases.

According to Genoss’ internal documents, each doctor received funds up to KRW 500,000 per patient. Depending on the number of patients recruited, the total amount of research money a hospital received was from tens of millions of KRW to as much as hundreds of millions of KRW.

Research funds were paid in each stage of the research. For example, 31 university hospitals nationwide conducted the same Genoss’ clinical trial, titled ‘Prospective multicenter observational study for evaluating efficacy and safety of Genoss sirolimus-eluting stent in patients with coronary artery disease’ since 2016. The hospitals received KRW 10 million from Genoss every time they recruited 25 participating patients, which is estimated to be KRW 400,000 per patient.

▲ Medical device companies that request clinical trials to doctors didn’t pay research funds in lump sum. The company makes payments every time each hospital reaches a certain number of patients.

The deal was like an agreement because clinical trials require a certain number of patients with Genoss stent implants within a certain period of time. In particular, since the hospital gets paid the research funds every time it recruits a certain number of patients, the doctors have no choice but to use as many Genoss stents as possible.

In most Genoss’ clinical trials, about 80 percent of the total funds have been allocated for payrolls, allowances and research activities for doctors and other medical staffs.

▲ According to Genoss’ internal documents KCIJ obtained, the portion of payroll allocated for doctors and other medical staffs varied from hospital to hospital.

Adequacy of a clinical trial totally depends on each hospital’s take

Like Genoss stents, products with the MFDS’ approval can carry out a clinical trial immediately after obtaining the approval of the Institutional Review Board (IRB) at each hospital. An IRB’s evaluation committees consist of outside personnels such as medical and non-medical experts, but in fact, the board is difficult to avoid the influence of high-level doctors at the hospital.

The Genoss’ internal documents showed that some hospital IRBs approved Genoss' clinical trial plan as it was, while some rejected it and requested revisions worrying that clinical tests with only a single brand’s stent may play a role of kickback.

In March 2019, the IRB of Seoul National University Bundang Hospital reviewed a clinical trial plan submitted by Genoss. The board wrote that "the committee is concerned about the vulnerable environment in which researchers [doctors] have to choose a specific stent among various stents [while treating a patient]," and it demanded the principal doctor’s answer to "how researchers will conduct research independent from kickback issues."

"Each surgeon independently selects stents based on the patient's illness and condition of lesion," the lead researcher, the hospital’s cardiologist who initiated this trial from Genoss, wrote in a response to the IRB’s initial review. "No surgeon forces or persuades other surgeons to use a certain brand’s stent. We choose a stent based on knowledge and clinical experience."

Despite the doctor’s letter, at the end of the day, the Bundang Hospital IRB rejected the Genoss’ study in its final review report saying, "it is appropriate to reject this trial due to concerns of potential kickback issues."

However, there are not many cases of rejection. Among 72 clinical trials that Genoss commissioned from 2016 to the first half of 2019, only one case was rejected by Seoul National University Bundang Hospital.

The university hospital cardiologist, whom KCIJ asked for advice, claimed that clinical trials would be an ineffective tool as kickback to doctors. He explained that money allocated for doctors and medical staffs usually range from 30 to 40 percent of the total research funds, and that each person would end up with only a small amount of money.

"I don't think there would be many doctors who would be willing to go through the cumbersome extra work for such little amount of money, which is too little as a kickback," he said.

However, how research funds are executed varies from hospital to hospital. In a clinical trial expense allocation report at a university hospital, 68 percent of the total fund received was allocated for doctors’ labor cost.

Given that such a large hospital usually runs several trials from different stent makers at the same time, it is hard to say that the clinical trial funds -- which is an extra source of income for doctors -- don’t affect a doctor’s daily product choice.

State-run health insurance finances are wasted with kickback-like clinical trials

Once arranged a multi-institution clinical trial, which involves dozens to thousands of patients, a medical device maker can enjoy stable sales for at least several years.

The "Lobby Know-how Files," a set of documents written by Genoss salespeople and obtained by KCIJ, also showed that the medical implant industry in general considers clinical trials as a means of sales promotion.

“Our purpose is to encourage professors [doctors] to participate in clinical trials and increase the use of our brand drug-eluting stents (DES).”
- Genoss salesperson in charge of ChungAng University Hospital

The funds are not delivered to DES cardiologists due to the [hospital] clinical trial center’s financial difficulties. That causes doctors to lose motivation to proceed with the trials."
- Genoss salesperson in charge of Bucheon Sejong Hospital

The bigger problem is that medical implant makers like Genoss can make up its research funding cost by applying for reimbursement to the National Health Insurance Corporation, although the clinical trial was commissioned by the company from the first place for its own research and sales promotion.

As coronary artery stents are designated as a medical device covered by the national health insurance, the government reimburses insurance benefits up to KRW 1.97 million per case as of June 2020.

▲ Genoss commissioned clinical trials to verify the effectiveness and safety of its products, but did not incur the cost of stents used in the process. The company charged the national health insurance for stents and received the money.

According to Genoss’ internal documents, salespeople even asked IRBs at more than a dozen hospitals across the country in advance to design clinical trials that are subject to the national health insurance benefits.

After hearing back from the hospitals, Genoss concluded to apply the research as a "researcher-led clinical trial," in which doctors usually study with different devices for academic purposes, instead of a "sponsor-led clinical trial," in which the company commissions for its own R&D needs with its product.

According to the National Institute of Health's clinical research and information service, pharma and device companies can only get the national health insurance benefits in a sponsor-led clinical trial when it’s about treating rare and incurable diseases. On the other hand, researcher-led clinical trials can easily get the benefits if it is conducted for public interest purposes.

The Genoss clinical trial, which was rejected by Seoul National University Bundang Hospital in 2019, was submitted as a researcher-led clinical trial.

The hospital's IRB asked the lead researcher to revise the plan saying, "this particular clinical trial would be more appropriate to be classified as a sponsor-led trial, because the test only studies the certain company’s stents."

Doctors, hospitals and companies all benefit, but only patients don’t know

Companies, doctors, and hospitals benefit using patients' medical records for their clinical trials, but the patients are not informed about this at all.

A Genoss clinical trial manual and consent form, which a renowned cardiologist distributed to his patients read: "It is a clinical trial that receives research funds from the stent manufacturer but is conducted solely for academic purposes."

However, except for information that the research funds came from the stent maker, the consent form didn’t include any information on how the funds are executed or how much each doctor or hospital earns from this.

Some companies pay the clinical trial participants for regular check-ups and transportation expenses. However, Genoss didn’t provide such support to patients according to its consent forms.

According to Article 15 of the Fair Competition Regulations, which were enacted and operated by the local medical device industry under the Fair Trade Act, the companies can proceed with clinical trials on medical devices that are already approved by the MFDS, but the trials can’t be done for sales promotions purposes.

Research funds for the post-marketing survey (PMS), a type of clinical trial that should be approved by the MFDS, can be paid up to KRW 50,000 per case. Only those trials that involve rare diseases can be paid for up to KRW 300,000 if in-depth investigations are required.

However, there has been no detailed standards for research funds paid for clinical trials other than the PMS, such as the sponsor-led clinical trials conducted by Genoss.

Sponsor-led clinical trials being used as a tool of sales also has been criticized overseas

Controversy that clinical trials have turned into business tools has been raised abroad.

In 1998, the Journal of the American Medical Association (JAMA) introduced a study that investigated the impact of gifts provided by pharmaceutical and medical device companies that commissioned research to doctors and researchers.

Of the 2,000 doctors and researchers surveyed, 43 percent answered that they received gifts related to research, and 66 percent of those with such experience said that gifts had an important impact on the result of research.

Another paper published in 2000 wrote that various financial supports to doctors and other medical staffs in relation to clinical trials resulted in conflict of interest.

In Korea, the issue of clinical trials funding has also been raised.

In 2012, monthly magazine Shin Dong-A wrote an article that the clinical trials were being used as a window to kickback, as a group of doctors who did clinical trial reviews for medical devices at a university hospital IRB blew the whistle. The article also exposed that research funds from stent manufacturers actually played a role of kickback to doctors.

Local medical implant industry said it is difficult to present a clear position at the moment because no clear standards about this issue exist in the fair competition regulations, but added that the industry will have to amend the regulations if needed.

"We will monitor your articles, and if the association or the industry needs to change, we will improve things through promotion or education," said the head of public relations at the Korea Medical Devices Industry Association.

Like the state research funding management system at colleges, some industry insiders say that hospitals should implement a monitoring system that oversees if research funds are executed as planned.

"Usually, if a government organization does some research, it’s subject to some type of audit - whether in advance, during or after completing the project," a researcher who conducted a clinical trial at a university hospital said. "But there’s no audit system for those clinical trials that doctors personally initiate and accept directly from companies."

▲ In the medical device industry, some say that there are no regulations to monitor how research funds are used at clinical trials commissioned by companies to individual doctors, like the case of Genoss.

Just as the financial gains that doctors and hospitals take through clinical trials have been unknown, the research results also remain hidden.

The results of the ‘Prospective multicenter observational study for evaluating efficacy and safety of Genoss sirolimus-eluting stent in patients with coronary artery disease’ conducted by Genoss since 2016 have never been disclosed to the public.

Results of clinical research conducted only without government approval should also be made public transparently.

Only 24 cases of coronary artery stents are also searched on the National Institute of Health's clinical research and information service website, in which clinical trials conducted in Korea are registered. Of 24, only one clinical trial has been registered so far by Genoss.

Reporting by Jiyoon Kim, Wooram Hong
Video by Joon-sik Oh
Directing by Jong-hwa Park
Video Editing by Seo-young Park
CG by Dong-woo Jung
Design by Do-hyeon Lee
Publishing by Hyeon-jae Heo

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