Opinion No. (2006)

BILL LOCKYER Attorney General GREGORY L. GONOT Deputy Attorney General THE HONORABLE JOSEPH L. DUNN, MEMBER OF THE STATE SENATE, has requested an opinion on the following questions: 1. May a physician prescribe for a patient a medical device that is distributed by a company in which the physician has an ownership interest? 2. If the physician may prescribe for a patient a medical device that is distributed by a company in which the physician has an ownership interest, may the company solicit physicians as investors in the company? CONCLUSIONS 1. A physician generally may prescribe for a patient a medical device that is distributed by a company in which the physician has an ownership interest, provided that any return on investment is based upon the physician's proportional ownership share and requisite disclosures are made. 2. Where a physician may prescribe for a patient a medical device that is distributed by a company in which the physician has an ownership interest, the company generally may solicit physicians as investors in the company. ANALYSIS The two questions presented for resolution concern a physician's financial investment in a company that sells medical devices 1 to…