By Fred Schulte / August 10, 2021
Several orthopedic surgeons who invested in Renovis Surgical Technologies made big money when a Japanese technology giant snatched up the small California medical device company.
Kyocera Corp., which was eager to expand its U.S. spine and joint implant sales, bought Renovis’ assets in 2019. While the parties kept the sale price under wraps, Renovis’ physician stockholders held stakes valued at over $34 million by the end of that year, with nearly half that sum to company founder and chief executive Dr. John Steinmann, according to the federal government’s “Open Payments” database, which tracks payments to doctors from device and drug companies.
Hundreds of orthopedists and neurosurgeons have cashed in on stakes in companies that design, manufacture or distribute orthopedic implants — sometimes after investing little or no money — and despite ongoing ethical and legal concerns, a KHN investigation has found.
KHN found that surgeons had stakes in more than 200 privately owned device companies from 2013 through 2019. At the end of 2019, their holdings topped $300 million in value. Doctors can dispute the payments but rarely do so.
Device makers often reach out to orthopedic surgeons for help designing or evaluating new implants, a practice they say spurs innovation and leads to safer, more durable devices. Offering feedback can land surgeons lucrative royalty and consulting deals or stock holdings that escalate in value when startup device companies are sold. In other cases, surgeons have owned a piece of distributorships that buy implants from manufacturers and resell them at a profit.