U.S. to Force Drug Firms to Report Money Paid to Doctors
By ROBERT PEAR
Published: January 16, 2012
WASHINGTON — To head off medical conflicts of interest, the Obama administration is poised to require drug companies to disclose the payments they make to doctors for research, consulting, speaking, travel and entertainment.
Many researchers have found evidence that such payments can influence doctors’ treatment decisions and contribute to higher costs by encouraging the use of more expensive drugs and medical devices.
Consumer advocates and members of Congress say patients may benefit from the new standards, being issued by the government under the new health care law. Officials said the disclosures increased the likelihood that doctors would make decisions in the best interests of patients, without regard to the doctors’ financial interests.
Large numbers of doctors receive payments from drug and device companies every year — sometimes into the hundreds of thousands or millions of dollars — in exchange for providing advice and giving lectures. Analyses by The New York Times and others have found that about a quarter of doctors take cash payments from drug or device makers and that nearly two-thirds accept routine gifts of food, including lunch for staff members and dinner for themselves.
The Times has found that doctors who take money from drug makers often practice medicine differently from those who do not and that they are more willing to prescribe drugs in risky and unapproved ways, such as prescribing powerful antipsychotic medicines for children.
Under the new standards, if a company has just one product covered by Medicare orMedicaid, it will have to disclose all its payments to doctors other than its own employees. The federal government will post the payment data on a Web site where it will be available to the public.
Manufacturers of prescription drugs and devices will have to report if they pay a doctor to help develop, assess and promote new products — or if, for example, a pharmaceutical sales agent delivers $25 worth of bagels and coffee to a doctor’s office for a meeting. Royalty payments to doctors, for inventions or discoveries, and payments to teaching hospitals for research or other activities will also have to be reported.
The Obama administration estimates that more than 1,100 drug, device and medical supply companies will have to file reports, generating “large amounts of new data.” Federal officials said they would inspect and audit drug company records to make sure the reports were accurate and complete.
Companies will be subject to a penalty up to $10,000 for each payment they fail to report. A company that knowingly fails to report payments will be subject to a penalty up to $100,000 for each violation, up to a total of $1 million a year.
Top executives are potentially liable because a senior official of each company — the chief executive, chief financial officer or chief compliance officer — must attest to the accuracy of each report.
The new requirements, or something very similar, will take effect soon; in fact, they are overdue. Under the new health care law, the administration was supposed to establish payment-reporting procedures by Oct. 1, 2011. The public will have until Feb. 17 to comment on the proposals, which are broadly consistent with the expectations of industry and consumer groups. After considering the comments, Medicare officials will issue final rules with the force of law.
Consumer advocates have long demanded details of the financial ties between doctors and drug and device companies.
Allan J. Coukell, a pharmacist and consumer advocate at the Pew Charitable Trusts, said: “Patients want to know they are getting treatment based on medical evidence, not a lunch or a financial relationship. They want to know if their doctor has a financial relationship with a pharmaceutical company, but they are often uncomfortable asking the doctor directly.”
In an introduction to the proposed rules, the Obama administration says that patients can benefit when doctors and the industry work together to develop life-saving drugs and devices. But, it said, these relationships can also “lead to conflicts of interests that may affect clinical decision-making” and “threaten the underlying integrity of the health care system”....
I think this is good news. Both innovator and generic manufacturers should be subjected to transparency pressure, not only in the US but also in the Philippines, elsewhere. In the US as of 2008, 69 percent of total pharma market by volume was accounted for by generic manufacturers, although these producers account for only 13 percent by value, see data and graph here, Generic Drugs Asia 3: FDAs and the Consumers, November 25, 2011.
About two years ago, the Pharmaceutical and Healthcare Association of the Philippines (PHAP) sponsored a social dialogue with member-NGOs of the Coalition for Health Advocacy and Transparency (CHAT) of which MG Thinkers is a member. Among the topics discussed, PHAP discussed their Code of Ethics, which explicitly limits and restricts their member pharma companies' gifts and payment to physicians and the latter's non-medical activities like a sports/touring event. Many CHAT and MeTA leaders expressed surprise at their strict code, including CHAT Chairman, former Gov. Obet Pagdanganan.
I know that the Philippine Chamber of Pharmaceutical Industry (PCPI) does not have a code of ethics imposed on its members, like limiting or restricting their member pharma companies' gifts to physicians. I hope they will have one too someday, I know the PCPI leaders, they are good gentlemen and good friends of mine.
About 60 percent (or more) of total Philippine pharma market is accounted for by the national and local generic companies. United Laboratories (Unilab) alone corners about 24 percent of total pharma market, larger than the combined sales of the 2nd, 3rd and 4th (GSK, Pfizer and Roche or MSD, am not sure of the 4th).
So any government policy and pressure towards transparency should apply to all players -- innovator pharma, generic pharma, importer pharma, both multinationals and local. I think some innovator pharma give gifts to physicians so that the latter will prescribe their more expensive drugs. The local generic pharma also give gifts to physicians so that the latter will endorse/prescribe their lesser known drugs. The importer pharma also do for the same reason.
One problem with this policy should it be applied here, is that this will be another job that will require additional monitoring by the DOH and/or FDA. The DOH cannot even properly monitor if the money they give to DOH-attached hospitals, or the money they give to Botika ng Barangay (BnB), or money spent on other programs, are properly utilized and not wasted or stolen.
Drug Price Control 23: Greece's Pharmacy Nightmares, January 13, 2011
Drug Price Control 22: Comparing Prices of Drugs, Diagnostic Tests, PFs, December 24, 2011.