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.
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.