Shining A Light On Physician Payments: Delayed Rule Imperfect But Useful

February 15, 2013 | 3:50 pm
Celia Wexler
Former contributor

Back in 2010, when Congress approved the Patient Protection and Affordable Care Act, commonly known as “Obamacare,” it included a requirement to help all of us become more knowledgeable about our health care, and to reduce unacceptable conflicts of interest between physicians and drug and device makers.

The bipartisan mandate in the new health care law was championed by Sen. Chuck Grassley (R-IA) and then-Senator Herb Kohl (D-MN). It requires all drug and device companies to report any gifts or payments to physicians or teaching hospitals that are worth more than $10, or $100 in the aggregate in any given year. As Sen. Grassley stated: “Disclosure brings about accountability, and accountability will strengthen the credibility of medical research, the marketing of ideas, and ultimately the practice of medicine.”

The Senators believed that the public should know whether their doctors or hospitals are being improperly influenced to use certain drugs or medical devices to treat them. They pushed for this law because of real-world examples of how this influence can both drive up the cost of health care and harm patients. The Union of Concerned Scientists, along with a number of public health and consumer groups including Consumers Union, and The Pew Charitable Trusts, publicly endorsed the rule.

Senator Chuck Grassley

Senator Chuck Grassley (R-IA) has been a strong champion of conflict of interest rules and was key in getting the sunshine provisions in the healthcare law. Photo: Senator Grassley’s Office.

UCS supported both its public health and scientific integrity benefits. Disclosure supports the practice of medicine that is based on independent, rigorous science rather than on the most generous perks for clinicians.

Improper influence 

Sen. Grassley’s investigations revealed millions of dollars in improper payments by drug and device companies to physicians to promote their products. Sometimes physicians failed to disclose the significant investment in companies that sold the devices they routinely used in their patients

One target of Senate investigators, device maker Medtronic, ultimately agreed to pay  $23.5 million to settle a lawsuit alleging it paid doctors kickbacks to use its brand of pacemakers and defibrillators. Drug maker Eli Lilly in 2009 agreed to pay a $1.4 billion fine after the government charged that it had illegally marketed Zyprexa, an antipsychotic drug.

A 2010 investigation by the nonprofit investigative reporting outlet, ProPublica, found that drug makers were not picky about whom they paid to endorse their products. The companies had paid thousands of dollars in speaking fees to physicians who had been disciplined for infractions by their state medical boards for lack of competence or ethical breaches.

As the government imposed fines and settlements on major drug and device makers, these enforcement actions began to be conditioned on an agreement that these companies publicly disclose their gifts and payments to doctors and teaching hospitals. By the time the Physician Payment Sunshine Act became law, many of these huge businesses realized that transparency was in their best interest and could help restore patient faith in their products.

Sunlight but not stigma

The proposed rule did raise some concerns. The American Medical Association, for one, was worried that publicly disclosing payments or gifts to physicians from medical products companies could unfairly tarnish a physician’s good name.

I’d like to know if my doctor is getting a substantial amount of money that could influence his decision making. Photo: Flickr User 401(K)2013

No one wants to harm a physician’s reputation. But the publicly available data will in no way imply that recipients are doing something immoral or illegal. However, as a patient, I would want to know whether my doctor was being paid more than $100,000 a year to promote a certain drug, particularly if the doctor was prescribing it for me. And if disclosure discourages a physician from accepting an expensive lunch or dinner or speaking engagement in Hawaii, that’s not a bad public policy outcome.

This reform has been a long time coming. The regulations were supposed to be issued by October 1, 2011. They were not released for another 15 months.

Because of this delay, the public will not have access to this crucial information until next year at the earliest.

And the disclosure rule, while going a long way towards reducing unacceptable financial ties between doctors and the makers of medical products, is far from air-tight. Drug and device companies invest hundreds of millions of dollars in continuing medical education for physicians, and some of these payments will not have to be disclosed.

Other loopholes also remain. Drug and device makers won’t have to disclose all indirect payments, for example. If Merck gives a million dollars to a medical society, but does not stipulate how the society should use the funds, or who should benefit from the money, this gift will not have to be disclosed. To me, that seems like an open invitation for a lot of winking and nodding between drug and device companies and medical societies and other nonprofits that might be formed purely to receive secret gifts.

But this disclosure rule is a start, if too late and not as comprehensive as we would have wished. Sen. Grassley has promised to “stay vigilant about how this law is implemented.” So should we all.