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Issue Brief
Regulating Industry Payments to Physicians
Identifying & Minimizing Conflicts of Interest
Physicians write more than 2 billion prescriptions a year, an average of 7 for every American. Intensifying competition to capture these sales has doubled pharmaceutical industry marketing expenditures directed at physicians from $3.5 billion in 1996 to $7.2 billion in 2005 (excluding pharmaceutical samples). An undisclosed portion of that budget is spent on direct payments to physicians in the form of gifts, food, continuing medical education, travel, and consultancy fees. It is estimated that industry spending for lunches may alone total as much as $1 billion a year. A recent survey published in the New England Journal of Medicine indicates that 94% of physicians have received food, drug samples or other reimbursements and payments from the industry.
Several states and the District of Columbia have enacted so-called “sunshine laws” setting limits on industry payments to physicians and/or requiring disclosure of the payments. Existing laws are important first steps toward developing policies not
only to detect existing conflicts of interests, but ultimately to prevent them and end inappropriate industry influence on prescribing.
Proposed federal legislation: the Physician Payments Sunshine Act
Proposed legislation in both the U.S House and Senate would require industry to disclose “transfers of value” to physicians. Transparency laws highlight the need for change, but unlike actual marketing restrictions, disclosure itself is unlikely to completely mitigate the influence of industry marketing on prescribing. In this regard, existing laws are important first steps toward developing policies to not only detect conflicts of interests, but ultimately to prevent them.
The elimination of conflicts of interest in prescribing will:
• increase the quality and safety of prescribing
• lower prescription drug costs
• repair the damaged credibility of the medical profession
• restore patient confidence
Download the full PDF for more information.
"The legislation requiring public disclosure of the financial relationships between healthcare vendors and physicians has been widely discussed in policy circles for years. Critics claimed payments for speaking, consulting, research or even the small trinkets and meals delivered during routine sales calls unduly influenced physician choices and inflated healthcare costs. To combat those effects, Congress required public reporting of those payments in a publicly accessible database. The legislation, labeled the Physician Payment Sunshine Act, was included in the 2010 healthcare reform law."
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Prescription project director Danny Carlat identifies issues with the Physician Payments Sunshine Act requiring further clarification and guidance. Addressing those would ensure that manufacturers can appropriately implement the final rule, and enable consumers to benefit from transparency reports published by the Centers for Medicare & Medicaid Services.
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The Pew Charitable Trusts is working to decrease the influence of pharmaceutical marketing on doctors’ practices. With a three-year grant from the Attorney General Consumer and Prescriber Education Grant Program, Pew is collaborating several partners to improve conflict-of-interest policies within the 158 medical schools and 400 major teaching hospitals in the United States.
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The Pew Charitable Trusts appreciates this opportunity to submit comments to CMS's "Information Collection Activities" draft guidance. We suggest that both the research and non-research payment templates be modified in order to make it easier for consumers to identify which drugs, devices, biologicals, or medical supplies are associated with particular transfers of value.
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On Feb. 1, 2013, the Centers for Medicare & Medicaid Services published the final rule guiding implementation of the Physician Payments Sunshine Act, which Congress passed as part of the Affordable Care Act in March 2010 to increase transparency in the relationships between physicians and drug and medical device makers. Here are some of the highlights.
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