Medical device companies upselling products to surgeons in operating theaters, insider claims

A former marketing manager for medical device companies says company reps would go into operating theaters ostensibly to give surgeons technical support, but with the prime aim of selling more products.

Guy Towart worked in the industry for more than 25 years, and says these marketing campaigns helped push up the cost of surgery.

“When I was working as marketing manager for two different companies, I ran an internal marketing campaign which was called: ‘Would you like fries with that?'” Mr Towart told 7.30.

“The purpose of that campaign was to train the reps.

“If the surgeon happens to need a bone graft substitute, we want to upgrade them and sell them our expensive bone graft substitute on top of the expensive medical device.

“If the rep can get the surgeon in the habit of using this product instead of the patient’s own bone, we’ve just added $2,000 on top of the $10,000 for the hip replacement.”

Private health insurers say these increased costs put pressure on insurers to raise premiums.

A woman wearing glasses and a white top.
Dr. Rachel David says medical devices are pushing up the cost of surgery.(ABC News: Shaun Kingma)

“There are sales representatives in routine surgical procedures all the time all over the country, and the prime role of these people is to sell more medical devices,” Dr Rachel David, the CEO of Private Healthcare Australia (PHA), said.

But the peak group for device manufacturers says that’s “a blatant lie”.

“Certainly, in the operating theater there is no selling, there is no marketing that takes place,” Ian Burgess from the Medical Technology Association of Australia (MTAA) said.

“The technicians in-theatre are purely providing technical support.”

Mr Towart, who left the industry in 2019 and now works as a consultant to the PHA, says that’s not entirely accurate.

“Selling devices is a relationship game, so the best way to build a relationship with a surgeon is to support them by being in all of their cases regardless of how technical they are,” he said.

“What the companies have done is they’ve combined the technical person into the salesperson … and they’re judged not on their technical proficiency, they’re judged on their sales numbers.”

‘Cash and holiday incentives for salespeople’

Mr Towart said salespeople were “given incentives that would range from a cash prize through to holidays and high-end electronic equipment”, with bonuses of “more than $150,000”.

The Royal Australasian College of Surgeons (RACS) says it does not believe these practices are widespread.

“I would view that as the exception rather than the rule – certainly in my experience it is not the norm,” RACS president Professor Mark Frydenberg said.

“Most reps would come in at the beginning when really people are learning about a new device or a new prosthetic or something that was new, but it would not be standard that they would necessarily come in there [for] every single case once everyone was familiar with the technology.”

But the organization representing operation nurses says in its experience, it’s not always so clear cut.

“It depends on the specialty,” said Rebecca East, who heads the Australian College of Perioperative Nurses (ACORN).

“Particularly regionally we have regular reps that come through the operating suites that I certainly visit … because the surgeon has a relationship with the representative and the company.”

She said nurses would always protect the patient, but added that she had heard of rare cases where reps crossed the line.

“I do know colleagues who have had challenges around the product upsell in theater,” she said.

A generic shot of a surgeon.
The Royal Australasian College of Surgeons says it does not believe these practices are widespread.(ABC News: Brendan Esposito)

Call for investigation

Australian Private Hospitals Association CEO Michael Roff says the presence of device manufacturers’ staff in-theatre is determined by the type and complexity of the surgery.

“Their role is only to observe and advise on the device,” he said.

“In the event the presence of a device company technician is required, typically there is only one technician present in the actual theater room per case.”

Mr Towart says that was not his experience.

“I’ve actually been in a case where there’s been up to five reps from five different companies standing in the operating theater,” he said.

“It was also not uncommon for the rep to bring their marketing manager or sales manager with them.”

The PHA says it is clear these tactics have helped push up hospital costs.

“Back pain surgery for example, just over the period of the pandemic, the cost to health funds increased by $1,330,” Dr. David said.

“The only possible explanation is that the sales of those items have been pushed into that procedure over that period of time.”

The MTAA’s Ian Burgess denies this and says the real issue is excessive profiteering by private insurers.

“This is all part of a smear campaign, shifting attention away from insurers’ profits, trying to blame medical devices and extract further cuts to medical devices,” Mr Burgess said.

He has called for a federal government investigation into what the MTAA describes as the health insurer’s executive salaries and perks.

“This is in response to them attacking not only the med-tech industry, but also the rest of our private health system,” Mr Burgess said.

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