Federal Law Needed to Require Drug Companies to Disclose Payments to Doctors, Public Citizen Tells Congress

June 27, 2007

Federal Law Needed to Require Drug Companies to Disclose Payments to Doctors, Public Citizen Tells Congress

Dr. Peter Lurie Testifies Before Senate Committee About Mandating Public Disclosure of Physicians’ Potential Conflicts of Interest

WASHINGTON, D.C. – Current state laws that require the disclosure of pharmaceutical company payments to physicians are inadequate and a strong national disclosure law is needed, Public Citizen testified before Congress today. Dr. Peter Lurie, deputy director of the Health Research Group at Public Citizen, addressed the Senate Special Committee on Aging during a hearing entitled “Paid to Prescribe? Exploring the Relationship Between Doctors and the Drug Industry.”

In contrast to other professions such as education and law, which do not allow payments from those who could benefit from the use of particular products, the health care profession allows payments from the drug industry to doctors that involve cash, cash-value payments or in-kind payments, including meals and conference fees. To reduce conflict of interest, the American Medical Association (AMA) recommends that gifts be of educational value and not exceed $100. The pharmaceutical industry has similar guidelines.

But a study published by Lurie and co-authors in the March 21, 2007, issue of the Journal of the American Medical Association found that these payments are not readily accessible to the public despite new state disclosure laws in Vermont and Minnesota. Maine, West Virginia and the District of Columbia also require certain payments to be reported, but the laws are not yet in force.

Moreover, these payments often involve substantial sums and may exceed the AMA and drug industry’s voluntary limits. The study found that in Vermont, 2,416 publicly disclosed payments to physicians over two years were for $100 or more, totaling $1.01 million. The median payment was $177, but with a range of $100-$20,000. Sixty-eight percent of these payments were in the form of food, clearly providing no patient benefit and therefore potentially violating the AMA and drug industry guidelines.

In Minnesota, 6,238 payments to physicians over three years were for $100 or more, totaling $22.39 million. The median payment in this state was $1,000, with a range of $100-$922,239.

Disclosure laws provide a window into the pharmaceutical industry’s multibillion-dollar marketing practices, which often involve giving free drug samples and other items to doctors, underwriting continuing medical education activities and providing free travel. While physicians may argue that these interactions do not affect them, much research suggests otherwise. Pharmaceutical companies would not pay such exorbitant sums if they did not think they could influence prescribing practices.

“There is an obvious conflict of interest when drug companies promoting a specific product are able to use marketing rather than science to influence the way a doctor prescribes,” said Lurie. “This can result in the prescribing of unnecessary drugs or newer, more expensive drugs that may have undiscovered dangers.”

State disclosure laws simply bring an otherwise private interaction under public scrutiny.  However, a Public Citizen analysis prepared for the hearing demonstrates that all of the state laws currently on the books are deficient in some way. Minnesota and West Virginia, for example, do not require separate reporting of each payment, and only Maine and Vermont allow electronic filing of reports. West Virginia’s disclosure law is the weakest by far. It does not require that companies list the names of the physicians to whom payments are made, nor does the statute have any enforcement mechanism. All states have at least some categories of payments that are exempt from disclosure.

Lurie recommended that disclosure laws be expanded to include medical device and biologic companies, and that a federal law be passed that requires disclosure of such gifts on a national basis.

“These interactions are eroding the public’s trust in the medical profession,” Lurie testified. “These conflicts bear a strong resemblance to the recently reported scandals in the student loan business, but the difference is that in medicine, they are formally condoned by the profession.”

To read the testimony, click here.

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