Pandemic Impact on Elective Surgeries and Offline Activities: Medical Device Companies' Payments to Physicians Dropped Sharply in 2020
Affected by the COVID-19 pandemic, payments from the global medical device industry to physicians declined notably in 2020. MedTech Dive's analysis of CMS Open Payments data shows that most leading companies cut general payments by tens of millions to hundreds of millions of dollars, with Zimmer Biomet dropping from approximately $304 million to $63 million and Becton Dickinson falling by 82%. Research payments showed a divergent trend. The industry generally believes that the pandemic restricted offline training and academic exchanges, but some companies noted that one-time technology payments in 2019 also affected year-over-year comparisons.
The COVID-19 pandemic has continued to impact the global healthcare industry, with most major medical device companies significantly reducing payments to physicians in 2020. An analysis by MedTech Dive of the Centers for Medicare and Medicaid Services (CMS) Open Payments database shows that leading companies in the industry generally saw general payments decrease by tens of millions of dollars in 2020, with some individual companies experiencing declines of hundreds of millions, and the total number of payments also dropped significantly.
Among the medical device companies analyzed, Zimmer Biomet saw the largest decline, with general payments falling from approximately $304 million in 2019 to $63 million in 2020. Stryker, Johnson & Johnson's DePuy Synthes, and Boston Scientific saw payments decrease by approximately $70 million, $70 million, and $54 million, respectively.
Becton Dickinson had the highest percentage decline among all analyzed companies, with 2020 payments down approximately 82% from the previous year, though its absolute dollar decline was not the largest. Orthopedic company Smith + Nephew was the only one to increase general payments, adding approximately $2 million between 2019 and 2020.
A Medtronic spokesperson said in an emailed statement that pandemic-related restrictions on in-person services were one reason for the company's reduced payments in 2020. The statement said: "Due to the COVID-19 pandemic, like the rest of the industry, we had fewer interactions with healthcare professionals."
Since 2013, pharmaceutical and medical device companies have been required to disclose payments to physicians and teaching hospitals under provisions of the Affordable Care Act to increase financial transparency. The 2020 data was made public on June 30.
General payments saw significant declines, but orthopedic companies remain at the top
The table below shows changes in general payments for selected medical device companies from 2019 to 2020 (Source: CMS Open Payments database):
| Company | 2019 | 2020 | Difference (Percent Change) |
|---|---|---|---|
| Zimmer Biomet | $303,870,843 | $62,894,486 | $240,976,357 (-79%) |
| Stryker | $145,269,113 | $74,775,715 | $70,493,398 (-49%) |
| DePuy Synthes | $135,475,222 | $65,600,646 | $69,874,576 (-52%) |
| Boston Scientific | $87,249,626 | $32,835,016 | $54,414,610 (-62%) |
| Intuitive Surgical | $55,358,114 | $37,500,012 | $17,858,102 (-32%) |
| Medtronic USA Inc. | $82,483,445 | $67,023,049 | $15,460,396 (-19%) |
| Abbott Laboratories | $35,534,178 | $23,357,767 | $12,176,411 (-34%) |
| Becton Dickinson | $7,978,522 | $1,424,654 | $6,553,868 (-82%) |
| Edwards Lifesciences | $14,160,047 | $8,322,829 | $5,837,218 (-41%) |
| Philips | $11,197,692 | $7,515,424 | $3,682,268 (-33%) |
| Smith + Nephew | $31,821,504 | $33,802,522 | $1,981,018 (+6%) |
Note: Data from the CMS Open Payments database.
Although most companies saw declines in general payments, changes in research payments were mixed. For example, Becton Dickinson's research payments increased by about $5 million, while Edwards Lifesciences' research payments decreased by nearly $11 million.
Research payments show mixed changes
The table below shows changes in research payments from 2019 to 2020 (Source: CMS Open Payments database):
| Company | 2019 | 2020 | Difference (Percent Change) |
|---|---|---|---|
| Becton Dickinson | $4,088,705 | $9,273,805 | $5,185,100 (+127%) |
| Boston Scientific | $33,753,102 | $34,676,085 | $922,983 (+3%) |
| Smith + Nephew | $5,518,059 | $6,148,772 | $630,713 (+11%) |
| DePuy Synthes | $76,780 | $281,892 | $205,112 (+267%) |
| Intuitive Surgical | N/A | N/A | N/A |
| Medtronic USA Inc. | $6,908,214 | $6,638,723 | $269,491 (-4%) |
| Stryker | $7,283,227 | $6,820,349 | $462,878 (-6%) |
| Abbott Laboratories | $51,214,402 | $49,696,373 | $1,518,029 (-3%) |
| Zimmer Biomet | $7,384,995 | $4,889,113 | $2,495,882 (-34%) |
| Philips | $7,823,652 | $3,892,735 | $3,930,917 (-50%) |
| Edwards Lifesciences | $39,261,098 | $28,592,591 | $10,668,507 (-27%) |
Note: Data from the CMS Open Payments database.
The Open Payments database tracks payments made by pharmaceutical and medical device companies to physicians and teaching hospitals for products covered by Medicare or Medicaid. General payments include royalties or license fees based on product sales, consulting fees, food and beverage, travel and lodging, and gifts. The database also includes research payments and ownership or investment interests held by physicians and their immediate family members in reporting entities.
Intuitive Surgical said most of its payments were for training on its da Vinci robotic surgical system. A spokesperson said in an emailed statement: "The pandemic made it difficult for surgeons to attend in-person training or educational courses. Intuitive adapted by moving some technical training to regional training centers to reduce travel for surgeons and surgical teams."
A Stryker spokesperson said the pandemic did affect the reduction in payments, but it was not the only reason; payment amounts are also influenced by sales volume, company and product acquisitions, and new product development.
Zimmer, Abbott, Edwards, Philips, and Boston Scientific did not respond to requests for comment before publication.
In addition to lower total amounts, the number of individual payments made by medical device companies also decreased significantly in 2020. Boston Scientific had the highest number of payments in 2019 at 165,827, which fell to 85,642 in 2020. Stryker, Intuitive Surgical, and Medtronic USA Inc. also saw their payment counts roughly halve.
Orthopedic companies were among the highest payers in 2019, with the top three all from this sector. Despite significant declines in 2020, these companies still rank among the top spenders. Notably, orthopedic companies' payments generally surged in 2019, so 2020 levels are closer to historical norms.
A DePuy Synthes spokesperson confirmed that the pandemic affected elective surgeries and other in-person activities, leading to reduced payments. However, the pandemic was not the only reason; 2019 included one-time technology payments.
Payment controversies persist
Concerns that large industry payments to prescribers and other healthcare professionals could influence medical judgment and create conflicts of interest were a major driver behind disclosure requirements. Companies argue that these payments are essential for product or service development, but multiple studies of the pharmaceutical industry have found associations between physician payments and increased prescribing of specific drugs.
"These payments actually represent financial conflicts of interest for physicians that often run counter to patient interests, which should come first," said Michael Carome, director of Public Citizen's Health Research Group. He believes patients know little about the extent to which pharmaceutical or medical device company payments can corrupt the physician-patient relationship.
A recent study published in Health Affairs found that between 2014 and 2017, medical device companies paid physicians more than pharmaceutical companies. The study authors noted that physicians typically play a larger role in device development than in drug development. For example, due to the complexity of implantable devices, medical device companies provide product-specific training and education to surgeons, and company representatives may even be present in operating rooms. However, the authors still warned that close industry ties could create bias if influence "comes from the best-funded companies rather than those with the best therapies."
A Stryker spokesperson emphasized: "The medical community plays an integral and positive role in the development, improvement, and education of medical technologies that improve patients' lives."
Daniel Kracov, a partner at the law firm Arnold & Porter, said the Open Payments database is a transparency mechanism, while laws such as the anti-kickback statute are used to enforce penalties for potentially illegal payments. These laws help prevent illegal payments (such as rewarding physicians for using products) and ensure companies pay fair market value. Additionally, clinical research rules require companies to disclose large payments to investigators when seeking product approval or marketing authorization.
Kracov believes that adding additional regulatory measures, such as caps on physician payments, could be counterproductive. "What if a physician invents a medical device and receives high royalties for it? Why should the federal government limit that kind of innovation?" He added that the Open Payments database "has had a huge impact in prompting companies to regulate their relationships and sensitivities with healthcare professionals."