PEDIATRICS Vol. 94 No. 1 July 1994, pp. 89
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EFFECTIVE? MAYBE. PROFITABLE? CLEARLY

J. F. L. MD

SANTA ANA, CALIF.—The Tokos Medical Corporation, which sells a service that detects early labor in pregnant women, recently started a program to reward obstetricians who ordered it for their patients.

In its ifies the company called the program "Dr. Deal." The deal: earn up to $20,000 annually on an investment of $1,000.

The program, in which 300 to 400 obstetricians nationwide are participating, works like this: The doctors put up $1,000 each to become shareholders in a company set up by Tokos that typically exists only on paper. In return, the doctors pocket 15 percent of the payment for any Tokos services prescribed by members of the physician-owned company. Tokos says participating physicians currently average about $5,000 a year from the arrangement; literature from one Tokos subsidiary boasted that annual earnings could reach $22,500

But a debate is growing about the effectiveness of the home uterine monitor that is the keystone of Tokos's service. The Food and Drug Administration is also investigating Tokos's marketing claims. Separately, there is a scientific controversy about the safety of the drugs Tokos sells to prolong pregnancy.

Some doctors are concerned about not only Tokos's marketing practices but also the willingness of some physicians to take part in its investment plans. "It is a sad day for medicine," say Dr. Benjamin Sachs, chief of obstetrics and gynecology at Beth Israel Hospital in Boston.

A look at Tokos's marketing efforts highlights one of the most troubling issues in health care: Medical companies often go to great lengths to encourage doctors to use their products, and to persuade insurers to pay for them.