28 February 2024

Doctors Net Billions From Drug Firms

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Drug and medical-device companies paid at least $3.5 billion to U.S. physicians and teaching hospitals during the final five months of last year, according to the most comprehensive accounting so far of the financial ties that some critics say have compromised medical care.

The figures come from a new federal government transparency initiative. The 2010 Affordable Care Act included a provision dubbed the Sunshine Act, which requires manufacturers of drugs and medical devices to disclose the payments they make to physicians and teaching hospitals each year for services such as consulting or research. The Centers for Medicare and Medicaid Services compiled the records into a database posted online Tuesday, though the agency said that about 40% of the payment information won't identify the recipients because of data problems.

The database revealed totals, such as the $122.5 million paid by Roche Holding AG's Genentech unit to City of Hope medical center in Duarte, Calif., as royalties on sales of several products including blockbuster cancer treatments Herceptin and Avastin.

Genentech licensed patents from City of Hope based on research the medical center conducted in the early 1980s. The company said that excluding the City of Hope royalties, about 85% of the physician payments it reported to CMS were focused on drug research. City of Hope said the royalties are allocated to the inventors and to support continuing research.

The push for greater transparency was driven by concerns that doctors' prescribing decisions are tainted by the money and gifts they receive each year from companies. Supporters expect the transparency initiative to provide useful information to patients about the relationships their doctors have with industry and to curb the influence of payments on medical care.

Companies have defended their payments to physicians as necessary to conduct research and communicate how products should be used.   The payments and so-called transfers of value to an estimated 546,000 doctors and 1,360 teaching hospitals include such items as free meals that company sales representatives bring to physicians' offices, fees paid to doctors to speak about a company's drug to other doctors at restaurants, compensation for clinical trial research and consulting fees.

Some doctors have earned tens of thousands of dollars annually from drug companies by flying to various cities to give paid speeches, while some surgeons have received even larger amounts from medical-device makers, partly from royalties on products they helped develop.

Doctors have expressed concern about having their names attached to money paid by industry. Some have scaled back their interactions with industry because they know it will be reported publicly.

The first batch of data released by CMS on Tuesday covers payments made from Aug. 1 to Dec. 31, 2013. Beginning next year, companies will report full-year data annually. Companies submitted the data to CMS earlier this year, using the so-called Open Payments portal. The agency has allowed physicians to register with the Open Payments system to get a preview of the payment records, before it went public, to allow time for them to dispute any reports they believed were inaccurate.

But it hasn't been a smooth process. First, CMS delayed the public reporting of the data by a year to give companies more time to prepare. The Open Payments online system has experienced technical problems, including a data mix-up that resulted in some doctors being linked to payment records for other doctors with the same surname. The preview function for doctors had a cumbersome registration process and was taken offline at times in recent weeks.

The first batch of data is incomplete. CMS in August said it removed about one-third of the payment records from the physician-preview database because it said some of the state medical-license numbers that companies reported for doctors didn't match a database that the agency was using for verification, among other problems. CMS now is releasing those records but without identifying the physicians tied to them. It will update the database to include the physicians' names for those records next year.

The agency's handling of the problematic records also has drawn criticism from companies, which said they reported the vast majority of data properly. About $22 million in physician-payment records reported Eli Lilly for the five-month period of last year, for example, was removed from the physician-preview database, out of a total reported of about $85 million. Industry and medical groups also have complained that CMS didn't offer advance information about how the data would be presented publicly.

Click here to access the full article on The Wall Street Journal. 

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