Cochlear’s dirty marketing tricks
We’ve been told that a complaint was filed in USA earlier this year against Cochlear. Upon investigation, we found out that the case focused on Medicare and exaggerated claims made by providers and possible competition practices.
So what’s this about? Someone called Brenda March worked as the Chief Financial Officer and Vice President of Cochlear from 1998-2004. She became a whistleblower, and filed a complaint (with the US government) [PDF], via her lawyers. This case has now been referred to the US HHS Office of the Inspector General, by the US Department of Justice.
Whilst this complaint focuses on specific American laws around Medicare, and the fairness of payments, it also contains useful facts about how cochlear implants are sold and marketed.
Incentives to use Cochlear’s products (implant CIs)
In 1997 Cochlear established a ‘Partners Program’ (and subsequent schemes), which gave surgeons ‘points’ each time they implanted a CI.
A points programme worked in the same way as rewards programmes you would get at your local supermarket. E.g. when you go shopping in Sainsburys you can get Nectar points. Get enough points and you can get some freebies or rewards. Shop elsewhere, and perhaps you can collect Air Miles, AAdvantage etc. The company buys in your loyalty, thus you feel obliged to buy from them. Its a clever marketing technique, and most of us will participate.
The okay thing about all the above marketing, is you are making decisions which affect your life, and your finances, and that is where it ends. You are fully aware this is happening, thus able to make an informed decision. Secondly, it usually has no direct implications on anyone’s health.
The case of Cochlear points, works in a similar way. Surgeons, audiologists and other front line staff would get points each time their service brought a CI from Cochlear. In other words, the more Cochlear implants a surgeon implanted, the more ‘points’ they would get, and thus bigger and more freebies from Cochlear.
Purchasing these devices for medical staff, was not for personal use, but they would then need to sell the benefits of a CI to a deaf person or parents of deaf children to get rid of the device, so in turn they could buy more CIs from the manufacturer, and get more points or bigger freebies.
Freebies included (to woo medics and encourage cochlear implantation):
- golf tournaments
- first class airfares and also for spouses or guests
- exotic holidays
- all expenses flights/trip to Australia twice a year, with significant free time & recreational activity
- payment of salaries of employees, and general operating expenses of clinics (which means more profit for physicians or practices)
- free products (which they could then sell on - device costs £16,500, so that much free money)
- direct cash payments
On a points system, these freebies would increase the more CIs implanted. Implant more, and you get a bigger personal prize.
To quote from the complaint brought by the US government and a former Vice President of Cochlear:
“The express purpose of such payments are and were to encourage Physicians to direct hospitals … to purchase Cochlear Implant Systems”.
Other dubious practices
Other marketing techniques included such people involved must agree to purchase between 5-10 implants to attend an event. You would obviously then need to pass on this purchase decision to a deaf person, by marketing or selling the idea of a CI to them.
In addition, Cochlear required provide certain outcome evaluations i.e. make sure the results were favourable to Cochlear. Perhaps modify statistics or influence these, and lack impartiality.
See the mentality here? Lets sell the benefits of a CI to deaf people, perhaps tap into their vulnerability, so I can have some more freebies. Perhaps tell them they won’t get through education (I’ve been told this) if they don’t have a CI. Abuse and play on fear. Perhaps tell parents that alternatives such as sign language is a bad, and their child will never be normal (again I’ve seen it happen in clinical situations).
The problem with this, is two things:
- there is a conflict of interest between a surgeon getting a reward, and what is in the best interest of the patient. A surgeon might want some freebies, thus could go for a hardcore marketing technique (implant will really change your life etc), whether it is good for the patient or not. This brings the medical profession into disrepute.
- who is in control? When you go shopping at Sainsburys, you make an active decision to do this, and making an informed decision. The process is more transparent. How many end users are aware of the above?
Cochlear has publically stated that it wanted a 20% target growth internationally, and has beaten these targets, thus one can only assume that such aggressive marketing techniques (and what I would call unscrupulous), are happening elsewhere including the UK. For an international company, it would not single out one country in terms of incentives.
Who is protecting deaf people?
Okay, exactly what are deaf organisations doing about this? Pussyfooting around in case they offend someone, as they have done so for years? Too scared to jeopordise their positions, and put their neck on the line?
Do they receive money too or some other incentive to shut the hell up? Balanced information cannot exist just by taking CI information vs cultural information, money and power structures get in the way.
A good example of money being the root of all evil?
For the record, if an adult wants an implant then they can have 100 for all I care. However, the over marketing strategies has always scared the hell out of me. It plays on fear of being in a minority and seeks to makes millions from this.
As for Cochlear shareholders, you should all be ashamed of yourselves. The sad thing is, due to how society is constructed, these people will probably think its an ethical investment.
Complaint: US Court District of Colorado [PDF]
Former CFO Turns In Cochlear Americas
Deafness Research UK: Cochlear Implants
Cochlear set to grow 20% in 5 years
Cochlear takeover bid by Medtronic possible
Cochlear’s aggressive marketing working