Dr. Richard Wilkenfeld
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April 3rd, 2008

COMPETITIVE SQUEEZE
Industry Giants Push Obesity Surgery

By RHONDA L. RUNDLE
March 31, 2008; Page A1

Medical-device makers, venture capitalists and surgeons are racing to turn a once-controversial weight-loss procedure into the next big thing in elective surgery.

Once dismissed by some surgeons as a gimmick, gastric banding — in which a silicone band is wrapped around the upper stomach to restrict food intake — is now the focus of a fierce competition pitting consumer-products giant Johnson & Johnson against Botox maker Allergan Inc. Venture-capital-backed outpatient centers are popping up to implant the bands. Growing ranks of surgeons are touting the procedure at free public seminars. All see a vast market in a country where diet and exercise programs have failed to slow an obesity epidemic.

GASTRIC BANDWAGON   What’s New: Once dismissed as a gimmick, gastric banding is now seen by some in the medical industry as the next big thing in elective surgery.  The Players: Industry giants Johnson & Johnson and Allergan, as well as venture-capital firms that are backing outpatient centers.  Patient Concerns: The silicone device can shift after surgery, causing it to lose effectiveness. And patients may eventually need another surgery to replace or remove it.

Like any major surgery, gastric banding carries risks of infection and even death. The silicone device can shift after surgery, causing it to lose effectiveness. No one knows how long it will last inside the body, so patients may eventually need another surgery to replace or remove it. And some surgeons say the weight loss achieved through banding isn’t as much as other weight-loss procedures. “There’s no question that advertising and the commercialization of the band is what’s driving it,” says J.K. Champion, a bariatric surgeon in Atlanta. Bariatric is a medical term derived from the Greek word “baros” meaning “weight.”

Weight-loss surgery remains rare, despite the fact that about a third of adult Americans are obese — and despite evidence that the procedures improve overall health. Only an estimated 1% of the nation’s 15 million morbidly obese people, typically those who are 100 pounds or more overweight, have undergone surgery. That may be partly due to the fact that the most popular weight-loss surgery to date has been gastric bypass, a more invasive procedure.

FOOD LIMITERS Diagram: Gastric Banding vs. Gastric Bypass

A number of recent studies suggest that gastric banding is safer than gastric bypass, and some data suggest comparable, if slower, weight-loss results. Improvements in surgical techniques and follow-up care have helped gastric banding become the dominant weight-loss operation in Europe and Australia. Credit Suisse analyst Marc Goodman predicts that gastric banding will account for half of all weight-loss surgeries by 2010, up from about 30% today.

Treatment for Diabetes

And banding is emerging as a treatment for diabetes: It effectively cured the disease in 73% of treated adults who were lighter than people who typically undergo weight-loss surgery, according to an Australian study published in the Journal of the American Medical Association in January. Diabetes remission closely tracks weight loss.

Some parts of the country are already bombarded with gastric-banding ads. In one television spot airing in Texas for True Results, a Dallas-based chain of six outpatient centers, a young woman says, “I’m going to be around much longer for my family,” after losing 178 pounds. Unlike the band makers, physicians and clinics can make advertising claims that aren’t subject to the strict rules imposed by the Food and Drug Administration.

“We see patients come into our office at the Cleveland Clinic who have heard about the band,” says Philip Schauer, director of the Ohio-based Cleveland Clinic’s bariatric and metabolic institute. He adds that the ads exert a powerful influence. “You don’t see commercials for gastric bypass,” he says.

In gastric bypass, the surgeon reroutes the gastrointestinal system. But gastric bands don’t alter the body’s basic plumbing. Tiny incisions are made in the abdomen, and a camera is passed through one of them so the surgeon can view the operation site on a video monitor. A band made of silicone is fastened around the upper stomach to create a small pouch that limits food intake.

Periodic Adjustments

After the band is installed, doctors make periodic adjustments depending on the patient’s weight loss, food cravings and physical reactions to the band. Patients typically need four to six adjustments in the first year, and two or three in each of the next couple of years. If the band is removed, the patient may revert to old eating habits.

Not all surgeons have jumped on the bandwagon. Some believe gastric bypass is better for the super obese, who may be more than 200 pounds overweight. “We’re finding patients have different demands,” says Dr. Schauer.

What’s more, the duration of weight loss for either procedure is still unknown. The possible complications of banding include slippage of the device or erosion into the stomach. Many health insurers are still reluctant to cover the procedures — leaving patients to pay, or borrow, the $15,000 to $40,000 to finance the surgery.

But some patients are storming ahead anyway. “It’s the best thing I’ve ever done for myself,” says Patricia Zeolla, a 59-year-old teacher in New York City, who learned of the procedure via a Web site.

Concluding that gastric bypass is too “scary,” Ms. Zeolla opted for gastric banding instead at New York’s Lenox Hill Hospital; her insurer, initially resistant, eventually agreed to foot the bill after her surgeon intervened. In one year, Ms. Zeolla whittled her weight down to 166 pounds from 286 pounds.

The first adjustable gastric bands were implanted in Europe and Australia in the early 1990s. The procedure had many early detractors. A high rate of surgical complications made surgeons wary. Inamed Corp., the company pitching the Lap-Band, was better known for its breast implants and had a poor reputation with bariatric surgeons eager to distance themselves from cosmetic surgeons.

“There was a mind-set that gastric bypass was better,” says Paul O’Brien, an author of the recent Australian diabetes study and director of the Centre for Obesity Research and Education at Monash University in Melbourne, Australia. Dr. O’Brien did his first Lap-Band surgery in 1994 in Australia. Since then, he and his colleagues have studied thousands of patients.

Gastric banding exploded after 2006, when Inamed was acquired by Allergan, best known for the antiwrinkle drug Botox. Allergan bought Inamed for its portfolio of cosmetic medical devices, but “we quickly realized the real jewel was Lap-Band,” David E.I. Pyott, chief executive officer, said recently at Allergan’s offices in Irvine, Calif.

In November 2006, Allergan began advertising the Lap-Band directly to consumers, an unusual tactic for a surgical device. The company aired a television commercial featuring a distressed woman trying to “tame” a roaring lion pulling her to the refrigerator.

The campaign was an immediate success: Within a week, visits to Allergan’s Lap-Band Web site had increased nearly fivefold. Sales of Lap-Band and other obesity-intervention devices soared 50% last year to $270 million, making them Allergan’s fastest-growing product line.

Enter Johnson & Johnson. Last September, J&J’s Ethicon Endo-Surgical unit received FDA marketing approval to sell its band, dubbed Realize. In recent months, J&J has been bringing obesity surgeons to weekend training sessions to teach them how to implant the device. Bariatric surgeons such as Alan Wittgrove of La Jolla, Calif., who once pooh-poohed banding, say that J&J’s efforts are validating banding as an option.

Quiet Launch

In January, J&J quietly launched a snazzy Web site that has surgeons buzzing. The site, www.realizemysuccess.net, provides patients with a suite of customizable online tools. After receiving a personal code, a patient can create an image of himself or herself by answering a series of questions, then adjust the images to see how they would look 25 or 35 or 50 pounds lighter. Patients can send daily alerts to their cellphones at set times to remind themselves to avoid the office candy dish.

Patients can even see what they might look like in a new wardrobe, for instance, just as shoppers can when visiting retailer Lands’ End’s site. The site also helps surgeons track patients’ weight-loss progress. Surgeons receive alerts if a patient doesn’t come in for follow-up care, or begins gaining weight.

J&J says it spent nearly two years developing the site, which draws on ideas from other consumer businesses. The site’s customizable options are intended to keep patients on track, since studies show that long-term success at weight loss is driven by what happens to change behavior after surgery, says Tom O’Brien, Ethicon’s director of marketing. J&J adds that a media launch touting its Realize band is on the drawing board.

Despite Allergan’s head start, Credit Suisse’s Mr. Goodman expects J&J to grab a chunk of the market almost immediately. Although both companies charge roughly the same amount — about $3,000 — for their bands, J&J has a small army of specialized salespeople selling other bariatric surgery supplies and instruments.

Adapting Strategies

Allergan isn’t backing down. Adapting strategies that built Botox into an iconic brand, Allergan is rolling out a new multimillion-dollar Lap-Band campaign. “If I lost the weight…I could stop taking so many medications,” says one heavyset woman in a television spot that started airing in March. Shown on ABC, CBS and cable stations, the spot targets female audiences of daytime soap operas. Allergan has also revamped its Lap-Band Web site with a support program for patients before and after surgery.

In a bid to neutralize its disadvantages in the surgical market, Allergan recently signed a co-marketing pact with Covidien Ltd., J&J’s largest competitor in the bariatric-surgery field. Covidien’s sales force will scout out general surgeons interested in the banding business.

“We threw [J&J] a curveball with Covidien,” Allergan’s Mr. Pyott boasts. The arrangement also puts a third large company behind the push toward gastric banding, raising its profile, he adds. Mr. Pyott says he is focused on growing the overall market for banding, rather than defending Allergan’s share vis-à-vis J&J.

Gastric banding is also being promoted by a growing number of outpatient banding centers. Backed by venture capitalists, the clinics buy specially designed waiting-room furniture, operating tables and scales to accommodate large people. Facilities are located a few steps from parking spaces to make access easier for outsized patients. The centers spend liberally on marketing to lure cash-paying customers. Banding typically costs $17,000, versus $25,000 for gastric-bypass surgery, though surgeons sometimes charge much more.

The American Institute of Gastric Banding, which operates the True Results clinics, says it has performed more than 11,000 surgeries since 2001. In Texas, “we basically took the Lasik playbook and ran it for banding,” says founder Peter Gottlieb, referring to the popular eyesight-correction surgery. Closely held oBand Surgery Centers Inc., with surgery centers in Los Angeles, Las Vegas and Orange, Calif., has a billboard on a busy boulevard in Los Angeles and is running commercials on the “Dr. Phil” and “Oprah Winfrey” television shows.

Then there is the growing number of surgeons who are joining the fray. Unlike gastric bypass, gastric banding is a relatively simple procedure, making it easy for surgeons to pick up.

Now, scores of surgeons across the country are touting weight-loss surgery at free seminars. Patients find them on Web sites sponsored by Allergan and J&J, as well as the Web sites of individual surgeons, hospitals and outpatient centers. The sites invite users to punch in a zip code to find seminars in their geographic area. JourneyLite, a network managed by closely held Bariatric Partners Inc., recently directed prospective patients to such a meeting in Ventura, Calif.

About 50 people, mostly middle-aged women, gathered in a nondescript room in the office suite of a local bariatric surgeon. Dressed in blue surgical scrubs, Helmuth Billy chatted for three hours about everything from the benefits of losing weight to the calories in a Starbuck’s caramel macchiato coffee. The “personal cost of obesity” adds up to $15,568 a year, including medications and food, according to a slide Dr. Billy showed, which was provided by Allergan. The total turned out to be close to what the surgeon charges for surgery, including follow-up visits.

One of his patients, a dark-haired woman in her 50s, stood up. “My name is Sandi and I weighed 424 pounds in May 2004, before losing 250 pounds,” said Sandi Henderson, who adds that she swims every morning and has tossed out her old medications. “I put my food-addiction money toward shopping and exercise,” she laughed. Since her insurance specifically excluded bariatric surgery, Ms. Henderson says she used some of her retirement savings to pay for the procedure.

The band makers are hoping to change insurers’ minds. While Inamed had employed only five people in its reimbursement department, Allergan has 100 people in that job today, and “we are monitoring how we’re moving the needle,” says Mr. Pyott. This year, the team is targeting major employers who make their own decisions about coverage.

Insurers are slowly loosening their purse strings. The federal agency that oversees the Medicare program instituted coverage for bariatric surgery in early 2006. That was followed by a favorable assessment on gastric banding last year from the BlueCross BlueShield Association, whose member health plans look to it for guidance. In September, the federal Tricare program, which provides coverage for 9.2 million active and retired U. S. military personnel, as well as their families, said it would cover gastric banding, retroactive to February 2007.

Allergan is also working to expand Lap-Band applications to younger and lighter patients. It is sponsoring human tests in teens between the ages of 14 and 17 as well as adults who aren’t as heavy as most bariatric surgery candidates. To make the band adjustments easier, the company is developing a remote-control system that would allow surgeons to loosen or tighten the devices telemetrically.

Write to Rhonda L. Rundle at rhonda.rundle@wsj.com

  

Meredith

April 3rd, 2008

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March 27th, 2008

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