There Will Be Blood and Money
And a lawsuit. And many, many questions about the relationship between a local hospital and the world’s largest medical device company.
One of the world’s best hospitals sits just off I-95 in Burlington, between the sprawling shopping mall and the office parks of tech firms. Founded in 1923, the Lahey Clinic has over the years built itself into a paragon of modern medicine. Home to more than 400 physicians working on the leading edge of their respective disciplines — from urology to gastroenterology to oncology — Lahey treats more than 3,000 patients each day.
But some of the most important areas in the clinic aren’t operating rooms or research stations. They’re storage units. Located in the interventional cardiology labs on the hospital’s fifth floor, these cabinets contain the expensive and highly specialized equipment that Lahey doctors use to treat patients with heart problems: catheters, angioplasty balloons, and the wire-mesh stents that prop open weakened arteries. Those stents are among the most expensive of the extraordinarily expensive devices stored here: A single one, which is about the size and length of the spring in a retractable pen, can wholesale for $1,800.
Over the past 15 years, stents have become ubiquitous in the treatment of narrowed or blocked blood vessels, better known as heart disease, the leading cause of death in the United States. Last year alone, the device was implanted in more than one million people, a number that translates into big business. The stent market is now worth $4 billion a year for the companies that sell the devices to hospitals.
With one of the busiest cardiology departments in the state, the Lahey Clinic is considered a particularly sought-after client for stent companies. The question of just how desirable Lahey’s business is, and how far a company might go to keep it, became a highly contentious issue inside the hospital last summer — largely thanks to one man: a veteran cardiologist named David Gossman.
The controversy started in late August 2009, during a routine meeting of Lahey’s cardiology department. Though he framed his concerns in hypothetical terms, Gossman wondered aloud why the hospital was using a certain brand of stent. The question may have been vague, but Gossman left little doubt that he believed a line had been crossed, that the choice of the stent was the result of a questionable deal between the hospital and the device’s maker.
Less than two weeks after the meeting, Gossman was fired. Told that he had to leave the clinic’s campus immediately, he was allowed to grab his laptop and his jacket from his office. The rest of his personal effects would be boxed up and sent to his home.
To some observers, the episode seemed like a classic whistleblower case: A trusted employee threatens to expose an unethical deal, only to have his company fire him in retaliation. That was exactly how Gossman portrayed the situation when he filed a lawsuit against the hospital and two of his former colleagues last October.
For many of those involved with the Lahey Clinic, however, the episode revealed an altogether different story line — one that suggested Gossman’s motives for suing had little to do with ethical concerns. In fact, in the weeks and months that followed the firing, there proved to be almost nothing that anyone involved in the dispute could agree upon, except maybe this: that when big business and cutting-edge medicine intersect, it’s almost impossible to tell where patient interest ends and self-interest begins.
That heart stents found their way into the middle of a controversy over the relationship between a hospital and a private medical company should come as no surprise to anyone familiar with the healthcare industry. The history of stents is, in some ways, the history of the way medicine and business came together in the first place.
In the late 1970s, one of the most vexing problems facing cardiologists had to do with angioplasties, the procedures that clear arteries of plaque to prevent heart attacks. About 40 percent of the patients who received angioplasties would soon find their arteries clogged again, a condition called restenosis. Among those trying to address the issue was a Texas cardiologist named Julio Palmaz. For nearly a decade, Palmaz tinkered with a possible solution to the problem: a tiny wire-mesh scaffold that could be positioned inside an artery to keep it permanently propped open.
Before Palmaz could finish his work, though, the government funding that backed his research dried up. Yet Palmaz was blessed with fortuitous timing. Around the same time he was developing his prototype, Congress passed a law that attempted to acknowledge how ineffective the government had been at developing medical research into real, commercially available treatments. The law gave doctors and companies incentives to bring new technology to market by allowing them to profit from the investment of their time and money. It also enabled Palmaz to find private funding for his research. A wealthy businessman (ironically, one who had founded the cholesterol-peddling Fuddruckers burger chain) gave the doctor $250,000 to complete his stent. Later, Johnson & Johnson agreed to license Palmaz’s design for $10 million, and the company would eventually sink another $100 million into testing and manufacturing it.
The partnership between Palmaz and his investors resulted in a stunningly effective device. The stents cut restenosis rates in half and improved the lives of millions of patients. They also became a huge profit generator for Johnson & Johnson, and then for a handful of other companies that managed to roll out competing products.
Today the vast majority of the stent market is for so-called drug-eluting versions, which are coated in anti-restenosis drugs that slowly dissolve into the bloodstream. Because development of the devices is so expensive — it costs as much as $1 billion to bring one to market — only four companies have had the wherewithal to get into the game: Johnson & Johnson, Boston Scientific, Abbott, and Medtronic. The battle that rages among them for market share, which often involves lawsuits, countersuits, and billion-dollar settlements, has become known as the stent wars.
In 2008, Minnesota-based Medtronic, the largest medical device company in the world (one of the founders invented the pacemaker), brought to market its first drug-eluting stent, Endeavor. The company’s sales force descended on hospitals around the country, working to persuade doctors to give the device a try.
The cardiac catheterization lab at the Lahey Clinic — commonly known as the cath lab — was among those that agreed to carry Endeavor. For Lahey, the decision promised to bring the latest technology into the hospital. For Medtronic, it meant landing a prestigious and potentially lucrative account. Lahey implants some 2,000 stents a year, a pace rivaled in the state only by UMass Memorial Medical Center.
When David Gossman joined Lahey in 1987, straight off his medical training, the enormous profits and intense fighting of the stent wars were still years away. As a salaried cardiologist at the clinic, Gossman knew he’d make less money than if he joined a private practice, but he also knew his staff position would free him from some of the mundane hassles of running his own business. He’d be able to focus on treating patients, conducting research, and living a semblance of a normal life. “When you choose academic medicine, you don’t choose it thinking, ‘I’m going to make a killing,’” says a former colleague of Gossman’s. “Dave has a lot of different things going on. He changes hobbies like he changes his clothes — fly-fishing, photography. His whole life didn’t focus on the hospital.”
As Gossman was building his career in the early 1990s, the medical landscape in Greater Boston was changing dramatically. In 1994, Massachusetts General Hospital and Brigham and Women’s Hospital merged to become Partners HealthCare, creating an industry juggernaut. To compete, other local hospitals began scooping up private practices in order to broaden their patient base and ensure a steady stream of referrals. Such moves were critical to the survival of hospitals, a reality summed up by a mantra administrators liked to recite to their physicians (if not the public): No margin, no mission. Without paying attention to the bottom line, in other words, there can be no lifesaving research or treatment. A bankrupt hospital can’t help anybody.
During the hospital consolidation craze, Lahey bought out the practice of Thomas Piemonte, a busy and well-respected cardiologist from Needham. Eventually, Piemonte became the director of the clinic’s interventional cardiology department, a promotion that bumped him above Gossman in the clinic’s pecking order. “Dave didn’t step up,” says the former colleague. “He was happy where he was.”
According to one former Lahey cardiologist, Piemonte was not just more willing than Gossman to be a leader, he was also more driven. He pushed himself, and his colleagues, to try new things. “They do a lot of clinical trials at Lahey, and he’s more willing to be on the cutting edge,” this doctor says. “Other doctors are more conservative, but he’s more willing to try it himself if he thinks it will help patients.” Though Gossman was a skilled member of the team, the doctor says, “I’m not sure he ever took the initiative to seek out those trials; he’d go along.”
As a teaching hospital affiliated with Tufts Medical School, Lahey has always been proud of the research it’s done, but in recent years it has invested ever greater time and resources in conducting clinical trials. The number of studies undertaken by the cardiology department alone has tripled over the past five years. The benefits of hosting so many trials are numerous: They attract high-profile doctors who want to be leaders in their fields, and, in turn, patients who want the best treatment they can find. They also tend to bolster a facility’s standing in the medical world — today, Lahey has one of the most highly rated cardiology departments in the country.
By the summer of 2009, the talk among cardiologists nationwide was about the upcoming trials for an exciting new device: an artificial heart valve called CoreValve. Because it could be threaded into place through a patient’s artery, a process far less invasive than traditional open-heart surgery, CoreValve was expected to be a blockbuster device (especially after it showed promising results in European tests). Medtronic foresaw a multibillion-dollar market for the valve — which is why it bought the company that developed the technology for $700 million in early 2009.
Piemonte knew that CoreValve could help countless patients, and that they would flock to the hospitals that had the most experience with the device. Like other ambitious cardiologists across the country, he also knew that Medtronic would be selecting just a few dozen hospitals to participate in U.S. trials.
While Cath Labs were buzzing over Medtronic’s upcoming trials for CoreValve, Gossman had apparently begun to harbor concerns about the company’s Endeavor stent. Gossman had used Endeavor after it was first released, but eventually moved away from it after reading several studies that seemed to suggest the device’s restenosis rate was higher than that of other brands (other studies tout the value of the Medtronic stent). Though restenosis is rarely life-threatening, patients who get it often have to go back to the hospital for additional surgery. Gossman was hardly the only cardiologist to make such a decision: After initially claiming 20 percent of the market, Endeavor’s share had fallen to roughly half that.
Despite the growing pile of literature detailing Endeavor’s problems, Gossman couldn’t help but notice that some Lahey doctors still seemed intent on using the device. He began to wonder why that was — and whether the answer had something to do with the hospital’s interest in landing a CoreValve trial.
On August 27, 2009, Gossman walked into a presentation for Lahey cardiologists and department fellows. The subject of the talk was clinical research at Lahey, including the role of the hospital’s institutional review board, which vets the ethics of prospective projects. Gossman took a seat across the room from Piemonte.
At the end of the session, during a question-and-answer period, Gossman decided that it was the right time to raise his concerns about the use of Endeavor. He posed a hypothetical question. Let’s say, he began, a medical device company approached a hospital and offered access to an experimental device, but only if the hospital bought more of its other products. What, Gossman asked, would the review board say about that kind of arrangement?
To outsiders, such a question may sound innocuous enough, but the doctors in the room instantly recognized the significance of what Gossman seemed to be alleging. If a hospital were to agree to buy more of a device company’s products in exchange for something it wanted — access to the trials of an experimental device, for instance — it would not only be ethically suspect, but could be breaking federal law.
Piemonte was incredulous that Gossman would casually throw out such an explosive accusation in the meeting. He turned to Gossman. Do you actually believe that kind of deal has been struck at Lahey? he asked.
Gossman nodded yes.
Less than two weeks later, on the morning of September 8, Gossman was called to a meeting with a handful of hospital executives and fired. He was not given a reason. After 22 years, his career at the Lahey Clinic was over, effective immediately. An administrative director and a security guard escorted him from the cath lab, past colleagues and patients and out to the employee parking lot. Because Gossman’s car was in the shop that day, the administrator had to drive him home.
Soon after Gossman’s departure, Piemonte called a meeting of cath-lab staffers. Gossman was no longer a Lahey employee, he said. For confidentiality reasons, Piemonte couldn’t provide many details, but according to an employee who attended the meeting, he told staff members not to gossip about Gossman’s firing — a directive that seemed to carry with it an unspoken “or else.” “It was like an earth-shaking event,” says the employee. “We were totally blindsided by it.” (Through a Lahey spokesman, Piemonte denies forbidding anyone from discussing the firing.)
In October, Gossman filed a lawsuit against Lahey, Piemonte, and the head of the clinic’s cardiology department, Richard Nesto. In the suit, Gossman made explicit what he had only hinted at with his question two months earlier. He’d heard that a Medtronic sales rep had offered Piemonte a deal that would benefit them both: If the cath lab used more Medtronic products, it would be selected to participate in the clinical trials for CoreValve.
In the suit, Gossman invoked a law that protects medical whistleblowers, and claimed he’d been illegally terminated for speaking out about the deal. He also argued he was entitled to at least $5 million because the hospital had ruined his reputation. “My career in New England, it’s over,” Gossman says. “Lahey Clinic has completely and successfully destroyed my career here.”
In its response to Gossman’s complaint, Lahey denied that any of its doctors had entered into an illegal deal with Medtronic. Perhaps it was a sign of the stakes of the fight that Lahey’s CEO, David Barrett, sent an internal e-mail to employees that described Piemonte and Nesto as “physicians of unimpeachable integrity,” tarred by “false and irresponsible” allegations. Moreover, Gossman was terminated because of “long-standing issues” regarding his behavior at work. -“Although Lahey Clinic is saddened by the litigious actions of Dr. Gossman,” Barrett concluded, “this is an unfortunate sign of the times.”
Gossman’s allegations about Lahey hit at a particularly sensitive time. When it comes to the relationship between healthcare providers and big businesses, we live in an era of heightened suspicions. Gone are the days when doctors were assumed to be above reproach, when they would (and could) accept meals, vacations, or other gifts from medical companies. Over the past two decades, the government has steadily fortified walls designed to keep industry from unduly influencing doctors’ medical decisions — with good reason. “In terms of the evidence, we know that a gift increases a doctor’s use of company products and services. It just does,” says Harvard researcher Eric G. Campbell, who studies business relationships in medicine. According to several studies, even the free pens that drug companies once handed out were shown to affect prescription patterns. “If it didn’t work,” Campbell asks, “why would companies do it?”
When the Massachusetts Department of Public Health issued additional rules governing doctor-industry interaction last year, it created a regulatory climate widely considered to be the strictest in the nation. For the first time, in this state or any other, the regulations apply not only to pharmaceutical companies — once the most egregious of influence peddlers — but also to medical device manufacturers.
The increase in legislative vigilance has been accompanied by unintended consequences, including the sense among the public, the media, and some academics that any financial relationship between a doctor and a medical device company, regardless of how small, is proof of something nefarious. These days, doctors worry only slightly more about engaging in a real conflict of interest than they do about accidentally creating the appearance of one.
Gossman is well aware of how complicated and angst-inducing the issue has become. He cited the new state rules in his lawsuit, and his portrayal of his dismissal seems almost tailor-made to set off red flags for anyone inclined to be suspicious. In this, he had help from Lahey officials themselves. After being fired, Gossman learned that his house was being watched by private detectives hired by the clinic. Though the hospital has said in court documents that it used them out of fear that Gossman might harass or even hurt his former colleagues, to others the move suggested something far less righteous — an attempt to keep tabs on whom Gossman was talking to. “Dave [had] the means and the motivation to completely dismantle Lahey’s academic reputation,” claims a former colleague.
In his suit, Gossman also paints a detailed, and highly unflattering, picture of Piemonte and his relationship with Medtronic. Gossman describes Piemonte as a doctor mired in conflict caused by his “significant financial interests” in the company. He says that Piemonte’s wife is a sales rep for the company and that the pair “retains substantial holdings” of Medtronic stock. He also notes Piemonte’s service as a paid speaker on behalf of the company. For a speech that took place in June 2009, for instance, around the time Gossman alleges the CoreValve deal was taking place, Piemonte traveled to a Connecticut restaurant to discuss the latest research on Endeavor, some of which was suggesting that restenosis wasn’t really a problem. In exchange for his time, Piemonte was paid $2,000.
Any attempt to interpret these kinds of transactions is colored by the murky union between doctors and pharmaceutical companies. Whereas new drugs often come out of company labs, the creation of a medical device requires much more involvement from the doctors who will be implanting it. “People of Dr. Piemonte’s stature tend to be sought after by many device companies. He’s a very brilliant fellow,” says a former resident. “I think he’s got the ethics to know if there is an issue.”
Considering the climate of suspicion surrounding medical ethics, it’s easy to make Piemonte’s relationship with Medtronic sound shady. Yet the information about Piemonte that Gossman didn’t include in his suit is just as interesting as the details he did. Although Piemonte’s wife does work for Medtronic, she neither sells stents nor conducts business with Lahey. The couple currently co-owns four shares in the company, worth about $200 (though, as a longtime employee, she may own more shares solely in her name). As for Piemonte himself, his 2009 earnings from Medtronic speaking engagements totaled $4,000, all of which he donated to charity.
In his lawsuit, perhaps not surprisingly, Gossman emerges as a doctor solely motivated by the best interests of patients. Yet over the years at the hospital, he had earned a complicated reputation. Though he was widely considered an excellent doctor, he was also seen by some as an abrasive colleague. “He would definitely speak his mind,” says a former Lahey cardiologist. Even one of his former coworkers — one who believes Gossman raised an important issue — thinks the way he asked his question at the big department meeting exemplified his lack of tact. “That’s kind of the shitty personality of Dave — that’s why some members of the staff didn’t like him,” this person says. “That’s not a political way to bring it up. That’s the personality conflict that gets you in trouble.”
According to a Lahey spokesman, Steven Danehy, Gossman’s termination had nothing to do with his allegations about the hospital and Piemonte. For years, Danehy says, hospital officials fielded complaints about Gossman’s behavior from people inside and outside the building, though he declined to detail those complaints. “We’re trying to take the high road on this,” he says. He adds the clinic fired him only after numerous attempts to correct his disruptive behavior. (Says Gossman: “There was never a [time] where they said, ‘You’re on thin ice,’ or words implying that. This was a bolt out of the blue.”)
In the eyes of hospital leaders, Gossman wasn’t a whistleblower at all, but an opportunist. Knowing that he was going to be fired for his behavior, he set about to manufacture a smokescreen of explosive conflict-of-interest allegations. To be sure, Gossman certainly sounded like a whistleblower at times. In a letter to a hospital official, for example, he wrote that many cardiologists believed the Endeavor stent was “suboptimal” and that Lahey’s alleged conflicts of interest with it “compromise patient care.” What’s curious about the letter, though, is that Gossman didn’t send it until after he was fired.
Around the hospital, Gossman didn’t strike some people as a doctor particularly concerned about conflicts of interest. Two doctors who trained under him said they don’t remember the issue ever inciting much passion in him. And when Massachusetts’ new medical ethics rules were being debated in the state legislature in 2008, Gossman added his signature to a letter protesting them (on the grounds that they would inhibit medical innovation). Danehy, the Lahey spokesman, claims Gossman articulated his concerns over Medtronic stents only once, at the August staff meeting — and that was after Lahey’s CEO had already signed the paperwork to fire him.
Just because he wasn’t seen as someone intensely concerned with ethics, Gossman says, doesn’t mean the issue didn’t matter to him. “For better or worse, the only funding of medical research is private funding — all the innovations come out of private companies. That’s just the way it is,” he says. “But, and this has been an issue of mine, how close [of a relationship] is too close?”
That is a question that someone other than Gossman will have to answer. In March, in a required filing with the SEC, Medtronic revealed that its relationship with the Lahey Clinic and its doctors is under investigation by the U.S. Attorney’s Office in Massachusetts. Whatever the feds find, the allegations are powerful enough to cloud the reputation of two well-respected physicians, a highly regarded department, and a renowned hospital.
Gossman’s lawsuit may have launched a federal investigation, but it isn’t going to uncover any more bombshells. Around the time of Medtronic’s SEC filing, Lahey and Gossman agreed to a settlement, the terms of which include a stipulation that bars both sides from further discussing the case.
That hardly means the matter is over, however. In the time that it was open, Gossman’s case revealed the inner workings of one of the world’s great hospitals, and laid bare the messy, if necessary, symbiotic relationships between physicians and medical technology companies. It also ended up damaging almost everyone involved. “It’s a very sad situation for both sides,” says a former Lahey staffer. “It’s a very sad situation all around.”
The Lahey Clinic and Thomas Piemonte have endured months of being branded with the medical world’s equivalent of a scarlet letter, an accusation that, true or false, won’t soon be forgotten. “What I find dispiriting at Lahey is that it’s getting to a point where people are going to question our integrity,” says a doctor who practices there.
Gossman, too, has been hurt. Once a cardiologist working at the top of his field, he’s recently taken to working at area emergency rooms while he looks for a new job. It’s been a disheartening process. Even he admits that a doctor who sues his employer isn’t a particularly attractive applicant.