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Drug Company Payments to Doctors Often Exceed Recommended Limits; Data Widely Unavailable to the Public

March 20, 2007

Drug Company Payments to Doctors Often Exceed Recommended Limits; Data Widely Unavailable to the Public

New JAMA Study Investigates Failures of State Payment Disclosure Legislation

WASHINGTON, D.C. – Payments from pharmaceutical companies to physicians are not readily accessible to the public despite new state disclosure laws and often involve substantial sums, according to an article co-authored by Public Citizen published today in the Journal of the American Medical Association (JAMA).

In contrast to other professions such as education and law, the health care profession allows payments from the drug industry to doctors that involve cash, cash-value payments or in-kind payments, such as meals or conference fees. To avoid conflict of interest, the American Medical Association recommends that gifts should be of educational value and not exceed $100. The pharmaceutical industry has similar guidelines.

Five states and the District of Columbia require these payments to be reported. Of these, only two states – Vermont and Minnesota – currently make the data publicly available. The study is the first to evaluate the effectiveness of public disclosure laws in these two states and also the first to investigate the prevalence and magnitude of the disclosed payments. Co-authors included Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group, and Dr. Peter Lurie, the group’s deputy director.

“Full disclosure of these payments is an important way to help the public better understand the relationship between the drug industry and their doctors. We hope this will discourage many doctors from taking these payments and thus prevent an erosion of public trust,” said Wolfe. “It will also encourage the medical community to address the known impact of payments on prescription writing.”

The study revealed that the disclosure laws enacted by Vermont and Minnesota fail to provide the public with easy access to information about these payments. The quality of the information that can be obtained is often non-standardized, inconsistently reported or withheld by the industry on trade secret grounds, rendering it insufficient for revealing the true patterns of payments between drug companies and specific doctors.

The study looked at public data in Vermont from July 1, 2002, to June 30, 2004, and found that 61 percent of payments were not released to the public because pharmaceutical companies designated them as trade secrets, and 75 percent of publicly disclosed payments were missing information necessary to identify the recipient. The data obtained from Minnesota for the period Jan. 1, 2002, to Dec. 31, 2004, show that only 25 percent of companies reported payments in each of the three years.

Public Citizen sued the attorney general of Vermont and numerous pharmaceutical companies to obtain disclosure of payments designated as trade secrets. As of February 2007, 18 companies settled the lawsuit, and 12 of those provided a record of their disclosed payments. The records of these payments were not received in time to include in the study.

In Vermont over the two years studied, 12,227 payments totaling $2.18 million were publicly disclosed. Of these, 2,416 payments to physicians involved $100 or more, totaling $1.01 million with a median payment of $177. In Minnesota over the three years studied, 6,946 payments totaling $30.96 million were publicly disclosed. These included 6,238 payments of $100 or more to physicians, totaling $22.39 million with a median payment of $1,000.

Among the 2,416 payments of $100 or more made to physicians in Vermont, 68 percent were in the form of food, and only 4 percent were in the form of books or grants. Many of these payments were for education (28 percent), one-on-one interaction with doctors [known as detailing] (26 percent) and speakers (14 percent), although the largest payments were for speakers or other unspecified purposes.

Among the 6,238 payments of $100 or more made to physicians in Minnesota, many were for unspecified purposes (46 percent), education (27 percent) and speakers (13 percent), although the largest sums were for research, speakers, consulting and other unspecified purposes.

“Even with the many problems limiting public access to payment information, we were still able to observe that substantial numbers of payments in excess of $100 had been made to physicians by pharmaceutical companies,” said Dr. Joseph Ross, the principal author and an instructor at Mount Sinai School of Medicine. “And we are probably only seeing the tip of the iceberg, given the incompleteness of the data.”

“Individuals who want to know how much drug company money their doctor is accepting and from whom will have a difficult time finding the information because the state disclosure laws are so riddled with holes and inconsistencies,” said Lurie. “States that enact public disclosure laws in the future should learn from these mistakes and require a more consistent and easily understandable system to report these kinds of payments.”

The authors recommended eliminating the trade secret exemption for payment disclosures in Vermont and designating a single state agency with real enforcement power to collect and disseminate the information to the public in an understandable manner as part of an online, searchable database.

To read the article’s abstract, click here.