Device and Drug Manufacturers Paid $6.49B To Doctors, Hospitals in 2014
According to a federal government report, medical device and drug manufacturers paid out $6.49 billion to doctors and teaching hospitals in 2014 to promote their products. While many support the Physician Payments Sunshine Act’s (PPSA) effort to create more financial transparency, some feel it is damaging U.S.-led innovation and industry investment.
The PPSA, a provision of the Affordable Care Act, created the Open Payment Program, which requires that all payments and “transfers of value” between the medical industry and doctors and/or teaching hospitals be made public on a website developed by the Centers for Medicare and Medicaid Services (CMS).
According to NPR, this report, the first of its kind, illuminates just how ingrained the medical industry has become in the lives of those who use or prescribe its products. NPR cited a ProPublica analysis that estimated “14,600 doctors received payments on at least 100 days in 2014.”
An article in the Minnesota Star revealed that eight U.S. doctors from different parts of the country collected a total of $81 million from Medtronic and St. Jude Medical. In total, Minnesota companies paid to doctors $211 million that was not related to research.
Aaron Kesselheim, an associate professor of medicine at Harvard Medical School who has done a lot of research on industry/doctor interactions, told NPR “There are physician practices which have very deep relationships with pharmaceutical representatives, where they are a very integral part of the practice.”
Part of the incentive to expose these relationships is CMS’s concern about cost, and whether or not some doctors are prescribing more expensive medications or devices when there is little or no proof that a less expensive product wouldn’t work just as well.
While some of the data does look compromising, the Pharmaceutical Research and Manufacturers of America (PhRMA) emphasized that it is important to view the overall data within the proper context, so that the public can see how these relationships contribute to research and development of new and better standards in patient care.
“Achieving medical progress requires collaboration between biopharmaceutical research companies and physicians,” said PhRMA in a statement released in 2013.
Still, many believe that this transparency is the only way to reduce fraud within the industry and to reduce any potential conflict of interest in clinical studies. A recent study conducted by fair market value (FMV) firm Cutting Edge Information indicates that the U.S.’s adoption of the PPSA has begun to influence policymakers in emerging markets in Europe and Asia.
However, some worry that PPSA may cut down on physicians’ willingness to work alongside companies to create better products. Mark Gardner, a Minneapolis lawyer who represents a number of health care companies, told the Minnesota Star, “Some physicians don’t want this information public. Hopefully it does reduce fraud and abuse on the system, but it may come at the expense of less investment in the industry.”