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The Influence of Corporations in Medicine and Orthopedics


Business and corporations have significantly affected the medical practice over the last century. This historical progression occurred initially when the medical services were the privilege of the elites, with doctors catering for particular social classes. However, market expansion and emergence of corporations have seriously altered the model of interaction between vendors who produce medical equipment and devices and doctors (Starr 62). Modern conditions of medicine and market dictate new relationships based on corporate goals, profitability of medical business and product promotion. With the modern advancement of technology, large numbers of vendors entered the market offering innovative equipment for medical purposes. Hence, the purpose of the present paper is to find out the methods that medical vendors use to involve doctors in product promotion, i.e. using the products of particular companies, recommending them to patients etc. Profits from both sides and methods physicians use to promote certain products for patients will be examined using particular examples in orthopedics.

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The area of orthopedics is worth investigating separately because of significant discoveries this field has contributed to the technical change in medicine. It is hard to imagine medical services without the devices and innovations that simplify daily activities for patients in need. However, close attention is now paid to the lack of coherence and balance between the orthopedic industry and medicine. Although this long-standing relationship between the corporations and orthopedics has benefited both parties, evidence suggests that it has not been balanced (Sarmiento 38). It has caused a tug-of-war between industry giants, the war that has possibly disrupted medical education and the way physicians practice medicine. The orthopedic industry appears to pursue its own interests that are guided by profit considerations and not the interests of patients, which is totally unacceptable in medicine dealing with the issues of human health and even life (Epps 14). I will specifically examine the orthopedic industry and find out how some of its newest innovations and techniques have been greatly influenced by industry and corporate vendors in the field.

Advertising and promotion have become the major tools of medical vendors, and the main participants are now chosen from practicing orthopedists, which contradicts ethical standards in medicine (Sarmiento 38; Crowningshild 9). All these elements shaping the image of current orthopedic practices will be considered in the present paper: the effect of corporate principles on the modern medicine and the corporate structure of hospitals will be examined, and effects of surgeons’ involvement in the process of product promotion will be analyzed on a set of contemporary vendors’ examples.

Influence of Vendors and Hospitals on Physicians

First of all, it is worth considering current state of orthopedics. Discussing modern devices and prostheses, special attention should be paid to implants and arthroscopy. Above all, it should be stated that, at present, the value of implants is hard to overestimate. Owing to the growing aging population, as well as active lifestyles, a number of people get injured or start having problems with joints (Burns, Housman, Booth, and Koenig 3). This accounts for the high demand for hip and knee implants that can currently be observed in the industry. The use of implants also becomes more and more popular because it is cost-effective, but, at this, quite efficient (Healy and Iorio 57). This is why arthroscopy, joints, and limbs replacement are regarded as the most successful medical advances in the past decades.

Nevertheless, the problems arise even with such devices. These problems are more of ethical character and are connected with the choice of devices and prostheses on the part of the surgeons. The aim of every surgeon is to achieve the best patient outcome; however, no one knows which implants are indeed the best. The surgeons are not sure which criteria to be guided by in implant selection; a number of characteristics (material, design, etc) affect the cost of the implant and “there is no American Joint Replacement Registry to define “best” implants” (Healy and Iorio 59). A number of hospitals use implant standardization programs, but there are also many surgeons that are loyal to specific implant companies. The latter are often unwilling to use the implants imposed by the hospitals within standardization programs, because such programs restrict implant selection choices and are aimed at reducing hospitals’ expenses (Healy and Iorio 60). On the other hand, the surgeons’ personal choices may be influenced by their relations with vendors. This is why the question of implant selection remains controversial in orthopedic surgery.

According to Burns, the United States spent $80 billion dollars on medical devices in 2007, of which orthopedic implants represented a large proportion of these costs (Burns 2). Furthermore, this industry alone contributes to one of the fastest growing components of hospital costs, and the costs spent on orthopedic implants will rise annually (at nearly 10% annually) to $23 billion by 2012 (Burns 2).

Such significant figures predetermine intense competition in the market of orthopedic devices, prostheses and technological appliances – recognition and popularity of particular vendors are likely to bring spectacular success and profit for them. These considerations taken together with the overall aging of the population and logical growth of demand for orthopedic services open a huge field for activity for modern vendors, which, at times, constitute the battlefield for providers through diverse methods (Burns 3). Fierce competition for clients is now conducted by means of engaging surgeons into promotion of their products, provision of educational and research opportunities for medical representatives in orthopedics, etc.

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The demand for orthopedic devices, prostheses and implants is evident up to date. However, public medical care turned out to be unable to keep pace with the growing prices. Hence, the majority of orthopedic surgeons have started to engage in privately-sponsored initiatives; in this way, they may gain various discounts in case of preference of particular items and obtain education and training on the application of proposed devices (Burns 2). Surely, such initiatives are highly beneficial for patients and vendors, but here comes the question of mechanisms of forming these priorities.

Burns conducted in-depth research on the subject of tripartite relationships between patients, physicians and vendors, and made a set of interesting conclusions in this context. The researchers conducted a survey of orthopedists in Pennsylvania, with the sample equaling nearly 2,500 surgeons who specialize in implant procedures, and rated surgeon’s loyalty to all major participants of their professional practice (Burns 4). The results showed extreme loyalty of surgeons to specific vendors with which they had stayed for more than 10 years, and about 12% of surgeons reported receiving monetary remuneration for consultation and promotion of their vendors’ products (Burns 9).

The patients’ needs have to be taken into account as well. Current practices of vendor-sponsored education, financial rewards for product usage and participation in the invention thereof bring patients’ hesitations on whether the device advised by the surgeon is really good or it is just something that he/she has been paid for. Obviously, such unclear relations of surgeons and vendors throw a shade on the surgeon’s preference of particular products, which results in the conflict of interests arising from these relations and surgeons’ involvement in the production and promotion processes. Rajaratnam advises the establishment of more efficient controlling compliance programs to ensure quality of proposed products and adequate transparency (provided by wise and timely disclosure of payments done by vendors to doctors with the proper amount of information on the issue) as means of facing the conflict of interests evident in the field (1265).

Noncompliance with Ethical Standards

Furthermore, despite the large number of advantages that close relationships of surgeons with particular vendors of orthopedic devices bring, there is a growing concern about deviance from ethical standards that have been traditionally governing medical practices and relationships between doctors, patients and vendors of medical supplements. Generally, the federal law prohibits taking gifts by the representatives of the medical field that exceed $5 in value, but this prohibition is hardly ever taken into account in the contemporary period. Modern practices of gift relationships that sales representatives establish with their clients, patients and hospitals include a wide variety of gifts, such as tickets to sporting events, subscriptions to journals, dinners in expensive restaurants etc (Lim and Aquino 281-282). Thus, currently, there exists a conflict of interests among surgeons who accept gifts or payments from vendors whose services they use. This fact gave a new incentive for studies in the field of medical ethics with the purpose of establishing proper limits acceptable for cooperation between vendors and surgeons.

It is worth mentioning that these limits should concern not only material gifts the surgeons receive. Support of educational programs for orthopedists is another controversial issue that comes to the fore when assessing the orthopedic surgeons’ integrity. The provisions of the Code of Ethics dictate the ability of medical institutions to receive sponsorship for various medical conferences, meetings and research undertakings, but the funds that are allocated to specific medical needs should not be transferred personally to a certain surgeon. They should be provided for the medical institution or organization conducting research and supervising it (Epps 16). However, in reality, surgeons are offered educational and research facilities, their inventions are patented and further on used in practice, which is generously rewarded by the vendor later. For this reason, the questions of proper information disclosure and product promotion have become a number one priority for orthopedic ethics.

Advancement in Technology and the Impact Produced on the Surgeon’s Choice

Another issue that is worth considering is technological progress in medicine that has significantly developed over the past 50 years. There are a number of innovations that have influenced orthopedics most of all for this period of time: “New technology such as arthroscopic surgery, total joint replacement, and advances in trauma care and fracture fixation have led to improved care and quality for all patients afflicted with orthopedic conditions” (Lim and Aquino 280). Among the brightest examples, there are such vendors as Synthes (the leading European producer of orthopedic devices and implants) and Smith & Nephew (the leading US orthopedic provider). Both companies are highly successful in the US and world market, managing a wide variety of appliances and offering considerable advantages to people who need surgical assistance. Other marketing tools applied by companies with the participation of orthopedic surgeons, such as training seminars or advertisements, will also be considered to identify the impact of mass market and competition on orthopedics on the whole Considering Synthes separately, it should be mentioned that it is hard to estimate the industry-surgeon relationships of Synthes in the professional, mass media resources. Synthes is a medical device company that has been earning its reputation for years. It is appropriate to pay attention to one of the latest developments it has presented to the general public. It is the LISS – Less Invasive Stabilization System. This new device offers full restoration of function to the injured limb; it eliminates such complications as infection, re-fracture, delayed union, etc due to the innovative technologies of reduction and fixation (Less Invasive Stabilization System (LISS) 3). However, despite the popularity and usefulness of the company’s products, some information exists on cases of non-disclosure of financial information by Synthes as well as off-label usage of some Synthes products (which means the application of the product not upon the direct recommendation of the Food and Drug Association). This enables the researchers to assume that certain motivation for such activities existed. Surgeons were reported to use unapproved Synthes products, which has already caused several deaths during operations and afterwards (Hill 1). The fact that the doctors used the product off-label and continued doing this after the first death was recorded proves that they had and still have personal interest in the application of the product.

A great example of this is the use of Norian XR, a product of Synthes that was approved by the FDA for the use cement prostheses and implants in some kinds of operations, but not for vertebral compression fractures (Hill 2). Hill (2) also mentions previous legal proceedings in which Synthes was engaged due to the inability to disclose financial data on their payments to surgeons properly. This fact falls into logical unity with the previous claims of Synthes’ representatives for real financial rewards for surgeons promoting their products. To get a full picture of the rewarding cooperation surgeons have with sales representatives of Synthes, one can consider the explanation given by one of the surgeons accused in the death of a patient operated with Norian XR that was improper for that particular case – this surgeon justified the product’s usage by the pressure a Synthes’ sales representative produced on him, making him do that (Hill 2).

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Proceeding to the discussion of controversial educational programs offered by orthopedic vendors to surgeons, one can see that these are also present in case with Synthes. More than that, according to Synthes’ annual report 2009, the company makes the major focus on promotion and expansion of educational programs for surgeons, calling it “exceptional relationship” to which they provide financial and other support (e.g. lodging, meals and transportation) (Annual Report 2009 16). The company actively participates in the provision of AO (Arbeitsgemeinschaft für Osteosynthesefragen, translated in English as Association for the Study of Internal Fixation) courses and provides surgeons with hands-on practical exercises (that are surely done only on the equipment of Synthes, showing its innovativeness, simplicity in usage and clear advantages for surgeons).

In addition, Synthes organizes product-specific courses to educate surgeons to work on specific equipment or utilize particular devices (e.g. cadaver courses in 2009 were dedicated to Vertebral Body Stenting (VBS), Synfix – L, Prodisc – L etc) (Annual Report 2009 16). It is possible to assume that educational programs of Synthes enjoy great popularity: for the period from 2007 to 2009 the number of courses rose by 120 (from 470 to 590), while the number of participants increased by 4,500 (from 30,700 to 35,200). Even despite the economic recession, the company’s sales force increased by 13% during 2009, which clearly shows the focus of the company on sales promotion through its sales representatives (Annual Report 16).

Another company worth paying attention to is also a leader in global orthopedic industry – Smith & Nephew. The company “provides advanced medical devices and surgical implants to orthopedic surgeons at nearly 10,000 U.S. hospitals” (“Mobile CRM Helps Smith & Nephew” 53). One of the company’s products that have significantly contributed into the modern orthopedics is The Birmingham Hip, a system widely used in hip replacement. This company also shows steady growth as compared to 2008 (2% growth for the year, EPSA growth by 18%, dividend up by 10%). Smith & Nephew specialize in hip and knee prostheses (2009 showed an increase by 7% in the production of hip prostheses and a 10% increase in knee prostheses in the USA). Generalizing its results, one can assess them as sustainable profitable growth (2009 Full Year Results 6).

Nonetheless, just like a range of similar companies, Smith & Nephew also faces challenges when it comes to implants selection. For example, a survey carried out in 2008 and aimed at discovering the orthopedists’ and surgeons’ ideas about the kickbacks in which a number of companies, including Smith & Nephew, were involved has shown that around 83% of all the doctors (66.3% of them being orthopedic surgeons) use the products of these companies on a regular basis (“What Doctors Think” 2008). Though the majority of the respondents have expressed negative attitudes regarding the kickbacks or influences of these companies on their implant selection, other data testify to the fact that illegal kickbacks did take place in case with Smith & Nephew in particular. In the same 2008, Smith & Nephew was involved in the conflict that took place in Pennsylvania. Back then, the state considered a lawsuit that blamed Smith & Nephew (as well as other four medical device companies) in paying illegal kickbacks to physicians. Moreover, in 2007, Smith & Nephew was among the companies that paid $311 million “to settle criminal anti-kickback claims levied by the Dept. of Justice” (Sorrel para. 9). The company was noticed to pay surgeons for using only their products. Thus, as it can be seen, it is not always that the surgeons are guided by their own choices when deciding which implants to use.


In conclusion, it has been shown that emergence of corporate relationships in medicine shaped the form of interaction between patients, doctors and medical vendors, which is particularly true about orthopedics. Multiple advancements in prostheses, as well as devices to restore motor functions and the organism’s activity clearly speak for the development of orthopedics due to extensive research and improvement of scientific methods of analysis, treatment, synthetic materials and innovative ways of intrusion when treating in-depth skeletal damages etc. However, even despite such clear benefits of the 21st century orthopedics, it appears essential to consider doubtable promotion practices used to engage as many clients in usage of their inventions as possible.

These ethical considerations throw a shadow on the competence of surgeons and make many patients feel uncomfortable before the choice of products to use. The information presented above shows that there are a number of doctors who have “special” relations with separate vendors, which results in their using only the products of these vendors. Separate examples of the companies, Synthes and Smith & Nephew in particular, have shown that illegal kickbacks are common among orthopedists and medical device companies. Though the products of these companies are still believed to be of high quality and some of their devices and prostheses have significantly influenced orthopedics over the past years, their unethical conduct hardly contributes into the improvement of their reputation.

Hence, an alternative approach to formulating ethical standards and ensuring compliance with them is essential for the future prosperity of orthopedics. Ethical dilemmas will always exist under the conditions of a competitive market where all the companies have to inform the customers about innovations, train surgeons in terms of their application, etc. For this reason the main task of the medical industry is to make their promotion fit the limits of acceptable practices and realize that dealing with human lives should be much more delicate and less pervasive than it is now.

Works Cited

“Annual Report 2009”. Synthes. Web.

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Burns, R. Lawton et al. “Implant vendors and hospitals: Competing influences over product choice by orthopedic surgeons.” Health Care Manage Rev, 34(1), pp. 2-18. 2009.

“Company Consultants – Identification and Payments”. Smith & Nephew. 2010. Web.

Croninschild, Roy. “The Orthopaedic Profession and Industry.” Clinical Orthopedics and Related Research. No. 412, pp. 8-13. 2003.

Epps, S. Charles. “Ethical Guidelines for Orthopaedists and Industry.” Clinical Orthopedics and Related Research, No. 412, pp. 14-20. 2003.

Healy, William L. and Iorio, Richard. “Implant Selection and Cost for Total Joint Arthroplasty.” Clinical Orthopedics and Related Research 457 (2007): 57-63.

Hill, Mirriam. ‘Synthes’ relationship with surgeons questioned’. The Philadelphia Inquirer. 2009. Web.

Kregor, P.J. “Distal femoral fracture fixation utilizing the Less Invasive Stabilization System (L.I.S.S.): The technique and early results.” Injury, Vol. 32, pp. 32-47. 2001.

Less Invasive Stabilization System. Synthes, 2000.

Lim, V.A. Edward, and Neal J. Aquino. The Orthopaedic Surgeon and Manufacturing Industry Relationship. From the Department of Orthopaedic Surgery, University of Cincinnati, Cincinnati, OH. 1999.

“Mobile GRM Helps Smith & Nephew Reps Give Hands-On Service.” Customer Relationship Management (2004): 53-54.

Rajaratnam, A. “Current trends in the relationship between orthopaedic surgeons and industry”. The Journal of Bone & Joint Surgery (Br), Vol. 91-B, No. 10, pp. 1265-1266. 2009.

Sarmiento, Augusto. “The Relationship Between Orthopaedics and Industry Must Be Reformed.” Clinical Orthopedics and Related Research, No. 412, pp. 38-44. 2003.

“Smith & Nephew’s Orthopedics Division Launches TRIGEN SURESHOT Distal Targeting System”. Medical Product Outsourcing. 2010. Web.

Sorrel, Amy L. “Physician Ties to Medical Device Firms Probed.” American Medical News. American Medical Association, 2008. Web.

Starr, Paul. The social transformation of American medicine. New York: Basic Books, 1982.

Telemedical Solutions, Inc. “What Doctors Think.” Telemedical Solutions, Inc. Telemedical Solutions, 2010. Web.

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