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New Health Law Will Require Industry To Disclose Payments To Physicians

Doctors who accept speaking fees, five-star meals and other compensation from pharmaceutical or medical device companies will soon see their names – and the value of the gifts they accept – revealed on the Web, under a new federal law that follows several states in drawing attention to such financial benefits.

The experience of one of those states – Vermont – suggests that highlighting the medical industry’s largesse may curb the payments.

This month, the attorney general of Vermont – one of three states to require gift disclosures – released data showing that total payments to physicians dropped 13 percent in fiscal 2009 to $2.6 million. The reporting requirement began in 2002.

Consumer advocates have complained that industry compensation can affect a doctor’s choice of drugs or treatment and that exposing the doctors will dissuade such behavior. But some consumer groups say that the new law is too narrow in its scope. And it has raised complaints among some doctors, who say the provision will unfairly stain legitimate work they do for industry.

The overall dollar value of gifts to Vermont physicians “has been going down steadily for the last three years,” says Wendy Morgan, chief of the state attorney general’s public protection division. “I think there are more health care providers who won’t accept gifts.”

Vermont lawmakers want to make sure of that. Last year they amended the law to ban most gifts outright, including food, which accounted for $800,000 of the 2009 total.

The other states with similar legislation, Massachusetts and Minnesota, have also outlawed many forms of corporate gift-giving, although they do allow doctors to accept speaking fees and most product samples. All three states allow research grants.

Yet even consumers in those three states will get more detailed information and easier access to the data under the new federal program, which is part of the health overhaul signed into law last month. 

Database Will Be Available Sept. 30, 2013

The Physician Payments Sunshine Act requires companies to begin recording any physician payments that are worth more than $10 in 2012 and to report them on March 31, 2013. That includes stock options, research grants, knickknacks, consulting fees and travel to medical conferences at chi-chi hotels. The details will be posted in a searchable database starting Sept. 30, 2013.

The measure is based on a bill that was introduced more than two years ago by Sens. Charles Grassley, R-Iowa, and Herb Kohl, D-Wis. The senators believe that physicians who receive benefits from drug and device makers are more inclined to prescribe the priciest products.

“We hope this lowers health care costs and strengthens patient-doctor relationships,” says Ashley Glacel, a spokeswoman for the Senate Special Committee on Aging, which spearheaded the original bill.

It’s not just states that are reporting physicians who are compensated by life-sciences companies. A growing number of pharmaceutical companies, feeling pressured by lawmakers expressing concerns about medical conflicts of interest, are also listing physician payments on the Internet. Most recently, Pfizer released details of $35 million in payments that it made to doctors in the second half of 2009.

Some industry critics gripe that the federal law has too many loopholes. It only applies to physicians and teaching hospitals, for example. Companies won’t have to report payments they make to nurses, physician assistants, and other medical professionals who might influence which products are prescribed.

“If any marketing avenue is not regulated, companies will find a way to exploit it,” predicts Dr. Daniel Carlat, a psychiatrist and associate professor at Tufts Medical School. Carlat was once a speaker for Wyeth but quit over concerns about how to deal with a depression drug’s side effects. “I expect we’ll see a lot more nurse practitioners giving hired-gun talks,” he says.

In Vermont, corporate payouts to nurses totaled $288,000 in 2009-almost triple the amount they received the previous year.

Some physicians opposed federal and state efforts to limit physician-industry relationships because they fear it will impede innovation.

Complaints From Doctors

“The use of the term ‘sunshine’ has an implicit aura of corruption,” says Dr. Thomas Stossel, a professor of medicine at Harvard. Last year, Stossel co-founded the Association of Clinical Researchers and Educators, which promotes collaboration between physicians and industry to create better products.

Stossel has accepted speaking and consulting fees from companies such as Merck and Pfizer, and he says he’s not opposed to his name appearing in corporate disclosures. But he does believe concerns about relationships between companies and doctors have been overblown. “What’s wrong with a company buying me lunch or giving me a tote bag?” he asks.

Other physicians acknowledge that donations from industry – even small ones – can create conflicts of interest. “There is extensive literature suggesting that gifts can influence behavior,” says Dr. Robert Steinbrook, adjunct professor of medicine at Dartmouth Medical School.

That evidence prompted the National Academy of Science’s Institute of Medicine to issue a report last year endorsing the elimination of all physician-industry relationships that might unduly influence prescribing behavior.

While the new federal law stops short of banning gifts, it does promise to increase the public’s understanding of how companies interact with physicians. Rather than simply listing names and dollar amounts, the federal database will include explanations of what services the physicians provided in return for the payments. And drop-down menus will make it simple for patients to parse the data by name, type of gift received, and other specifics.

As a result, “the legislation will allow us to analyze the data in ways that are meaningful,” says Jerome P. Kassirer, a professor at Tufts University School of Medicine and author of “On the Take,” a book about physicians’ financial relationships with companies.
That will be especially useful for patients facing hip or knee replacements, or other procedures involving expensive medical devices, Kassirer adds. “They’ll be able to determine whether their doctors are heavily invested in the companies making the devices,” he says.

Research suggests that those details matter to some patients. Kevin P. Weinfurt, an associate professor of psychology and neuroscience at Duke University, has studied how patients participating in clinical trials react to physician disclosures. He found that patients were particularly troubled when doctors owned stock in the companies that were managing the clinical trials. “They felt somehow that this physician could do something in the trial that could make the company a lot of money, which would then make him a lot of money,” Weinfurt says.

Industry groups representing pharmaceutical and medical-device makers have supported the federal provisions on physician disclosures.

“This knowledge will give the public greater confidence in the nature of the relationships” between companies and physicians, says David Nexon, senior executive vice president of AdvaMed, a trade association of medical device makers. “We have nothing to hide.”

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