Joseph Rugg's Health Law Blog

Increased federal investigation into alleged inappropriate arrangements between the pharmaceutical and medical device industries and physicians has led to significant scrutiny over certain “distribution” arrangements. Most recently, physician-owned distributorships (“PODs”) have come under attack. Inspector General Levinson recently outlined plans for the Office of Inspector General’s (“OIG”) nationwide study to determine the extent to which PODS supply spinal implants to hospitals and will evaluate, among other things, the proliferation of PODs and whether they offer any cost savings to hospitals. Proponents argue that PODs can result in reduced pricing on medical devices to hospitals because of the lower distribution costs and increased quality of products, including customization. Opponents, however, argue that PODs are nothing more than a mechanism used to reward physicians for referrals. PODs are just one of several ventures that have attracted physicians in the medical device supply chain. There are a number of laws and regulations governing these arrangements.

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