It’s a fact that’s been all but lost in all of the partisan feuding over healthcare reform, but after President Obama signs the historic legislation, Americans will see clearly how their doctors may be putting the profits of big drugmakers ahead of their personal safety.
The Senate bill, which the House approved Sunday night and Obama plans to sign into law at the White House Tuesday, contains little-known provisions that require drug and medical device companies to publicly report the gifts and payments they make to doctors.
The provisions, known as the Physician Payments Sunshine Act, require disclosure of gifts and financial compensation made to doctors by pharmaceutical companies, but would not actually limit those business relationships. The new requirements are similar to those already in force statewide in Vermont.
Those disclosures will include payments of cash or in-kind gifts to all covered recipients including: compensation; food, entertainment or gifts; travel; consulting fees; honoraria; research funding or grants; education or conference funding; stocks or stock options; ownership or investment interest; royalties or licenses; charitable contributions; and any other transfer of value as described by the secretary of health and human services, according to a fact sheet released by of the Pew Prescription Project, a watchdog initiative of the Pew Charitable Trusts.
Reporting won’t begin, however, until March 31, 2013 and public posting of information will begin Sept. 30, 2013.
The pharmaceutical industry spends nearly $30 billion annually on marketing, according to the Pew Prescription Project, citing a New England Journal of Medicine study. The majority, including samples, is spent on direct marketing to physicians, Pew adds. Nationwide, prescription drug spending rose 500 percent — from $40.3 billion to $200.7 billion — between 2000 and 2005, Pew says, citing a 2007 Kaiser Family Foundation study.
“Patients deserve to know if their doctors are receiving money from drug companies. Congress has added much needed transparency to the financial relationships between the pharmaceutical industry and physicians,” says Allan Coukell, director of the Pew Prescription Project. “The reporting requirements in the health care legislation will better protect patients and will help restore trust in our health care system.”
The evidence is clear, Pew says in a second fact sheet. Gifts, even small ones, change behavior, and such marketing drives up drug costs and sometimes puts patients at risk.
“Social science research sheds light on industry/physician interactions. It shows that a gift of any size imposes on the recipient a sense of indebtedness,” Pew says. “This need for reciprocity is a deep-seated human reaction.”
A comprehensive review of 29 empirical articles on the effect of industry interactions with pharmaceutical studies concluded that those interactions led to increased prescription drug costs, and also to “non-rational prescribing in the sense that the newly prescribed drugs had no therapeutic advantage over the alternatives,” Pew says.
During one six-week period, Pew reports that a medical resident reported being offered: “12 free breakfasts, 18 lunches, 16 branded pens, a branded eyeglasses cleaner, 2 penholder necklaces, branded pill holders, post-it pads, notepads, a pocket Physicians Desk Reference, correction paper strips, a coffee mug, a poster, a highlighter, a copy of the DSM-IV, a giant clip/fridge magnet, a ruler, a water/oil globe, a ‘History of Viagra’ book, and even a Viagra soap dispenser.”
Pew quotes Shahram Ahari, a former Eli Lilly salesman, pointing out that drug representatives never give just one pen or just one lunch. “I am in your office week after week, with a pen or a lunch. It is all about making you [the doctor] feel like I am your friend,” he says.
Pharmaceutical companies’ fiduciary responsibilities run to their shareholders, and those shareholders expect a return on their investments, Pew notes. In contrast, a physician’s fiduciary duty is to a single individual — the patient, it adds.
“When a physician accepts a gift for personal use, no matter how small, it represents a conflict of interest. This is true whether or not the physician’s judgment is affected,” it adds.
Reporting companies under the law are required to report a receiving physician’s name, address, and national provider identifier, which is a uniform billing code used by each physician in the United States. Companies also must report the value, date, form and nature of the payment using standardized descriptions for the various payment types, Pew says.
“This new legislation will enhance the safety of consumers by increasing transparency while in no way restricting business or limiting innovation,” Coukell says.
The publisher of the news site On The Hill, Scott Nance has covered Congress and the federal government for more than a decade.