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AMA, Wall Street tap into doctors' collective insight via new Web service

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BOSTON -- The American Medical Association is working with a startup company that encourages doctors to swap ideas online and charges investment firms to view postings that could serve as tip-offs to drug side effects and other market-moving medical trends.

The AMA on Wednesday plans to announce a partnership with a company called Sermo Inc., which seeks to use the Web to tap into the collective wisdom of the service's growing network of 15,000 U.S. doctors.

Some doctors are skeptical the nine-month-old service can advance medical safety, and a pharmaceutical industry group worries the service could spread as much rumor as fact.

But the 160-year-old AMA hopes its collaboration with Cambridge, Mass.-based Sermo will open a new line of communication, allowing members to quickly share everything from advice about treating an individual patient's unique symptoms to opinions on whether regulators should approve an experimental drug.

The two-year deal allows the Chicago-based AMA to survey its members on hot topics, just as Sermo's Wall Street subscribers solicit doctors' opinions to help guide trading decisions on drug company and medical device stocks.

"From AMA's perspective, this gives us access to the largest online physician community, and lets us connect our members with that," said Dr. Cecil B. Wilson, chairman of the board of AMA, which has 250,000 members.

Nearly three-quarters of U.S. doctors based outside hospitals practice alone or in groups of five or fewer physicians, AMA says. That isolation makes it hard for many doctors to keep up on breaking medical developments, Wilson said, because they need to rely on journals, conventions, continuing education and word of mouth.

Dr. Michael Tomblyn, a radiation oncologist at the University of Minnesota, said he logs on to Sermo several times a day between patient appointments and is now one of the service's most frequent posters.

"Someone can say, 'I've got this one complicated case. Here's the workup. Have you ever seen this before, and how would you manage it?'" Tomblyn said. "Within three hours, you can have a dozen responses from physicians in three or four different specialties. With all the burdens of practicing medicine today, there is not a lot of time and effort put into creating a physican-to-physician community. That is really something Sermo has built."

Sermo -- the name means "conversation" in Latin -- says 15,000 physicians have signed up since its launch last September, dwarfing existing online physician forums that rely on advertising for support, unlike Sermo's subscriber-based, ad-free model. The privately held firm says it has raised $11.5 million in venture capital.

For now, Sermo isn't letting drug and device companies join a list of subscribers that Sermo says numbers "10 to 20" financial services firms, including managers of hedge funds and mutual funds. Subscribers pay $100,000 to $500,000 a year.

U.S. doctors sign up free of charge by sharing personal information including medical license numbers. Sermo verifies the information against records databases to try to prevent postings by non-doctors with an ax to grind, such as a pharmaceutical firm representative hyping a drug. Doctors post anonymously, without having to disclose ties to drug or medical device makers.

Other doctors rank postings based on whether the information appears credible -- a "wisdom of the crowd" approach that Sermo says assigns low rankings to spurious claims that should be read with skepticism. Doctors can challenge or corroborate others' postings.

As enticements, Sermo sometimes sends $20 checks to physicians who regularly make highly ranked postings.

"What we found early on is that the money was the smallest motivator," said Sermo's chief executive, Dr. Daniel Palestrant, a former surgery resident at Beth Israel Deaconess Medical Center in Boston. "The biggest is the sense of community, and the ability to share ideas with one another."

Dr. William Maisel, a cardiologist at Beth Israel Deaconess who recently chaired a Food and Drug Administration advisory panel on heart stents, said he's skeptical the Web site will supplement government registries and industry systems to track unexpected drug reactions and device malfunctions.

"Incomplete, cryptic descriptions of drug adverse events or device malfunctions are not particularly useful in determining whether a true problem exists," Maisel said. "Without knowing the event rate -- not just what went wrong, but out of how many patients exposed -- it is difficult to separate a true problem from an expected event."

Alan Goldhammer, of the industry group Pharmaceutical Research and Manufacturers of America, worries that many doctors will essentially be spreading rumors about drug side effects and could "short-circuit" clinical trials and reviews by drug companies and the FDA.

Marc Harris, director of U.S. equity research for RBC Capital Markets, said his firm is pleased with the information his medical stock specialists have picked up so far via Sermo.

After a study in March raised questions about the effectiveness of drug-coated heart stents, RBC polled cardiologists to see whether they expected fewer surgeries to implant the devices.

"Within the first three or four days, we got responses from 100 doctors, and 65 percent of them expected a reduction," Harris said.

"The jury's still out over how valuable this data can be," he added. "But if you think of it as part of the fabric of information investment managers could use to confirm their holdings, or for a mutual fund, that is valuable information."

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