I’ve been writing about physician owned distributorships (PODs) for a while. See my previous posts here and here. Whether or not there is improper behavior, physician owned distributorships create the appearance of impropriety and give the medical device industry a bad name.
Earlier in September, the Justice Department finally took action against a physician owned distributorship. It took time for the Office of the Inspector General (OIG) to build its case against PODs generally (see the OIG activities here), and against this distributorship in particular. My guess is that the Justice Department will try to use this case to set a precedent, so the eventual outcome may have repercussions for other medical device companies working with PODs. If you are one of these companies, you might want to rethink your business model.
Some companies may see working with PODs as the lesser of two evils. Choosing not to work with PODs might cede business to a competitor who does choose to work with PODs. So, perhaps a justice department action is the only way to resolve the issue. I’ll be watching to see how the story evolves.
Jay Caplan on Medical Devices 