National Registry of Pharmaceutical Payments May Be Gaining Momentum

In April 2007, the New England Journal of Medicine published results of a national survey examining relationships between physicians and pharmaceutical, medical device, and other medically related industries. The survey found that, of those physicians who participated, 94 percent reported some type of financial ties with the pharma industry, ranging from the receipt of free food and drug samples to reimbursement for CME and paid consulting work. In essence, the NEJM survey confirmed what has been known for years — that physician-pharma relationships are, in fact, common place. Not everyone, however, views the prevalence of physician-pharma industry ties as a positive trend. Critics argue that drug company gifts and payments can compromise physicians’ medical judgment, as well as improperly influence their prescribing habits. Indeed, many opponents of these relationships assert that a conflict of interest is created any time a physician accepts something of value from a drug company which is related to the practice of medicine. To help address these concerns, a number of professional organizations have instituted guidelines, in recent years, to assist their members with determining the appropriateness of pharma industry relationships. One such organization is American Medical Association (AMA), which has developed educational programs to help guide physicians in matters of conflicts of interest, gifts from industry, and factors to consider when prescribing drugs to patients. (The AMA’s tools range from on-line mentoring courses to published opinions on AMA Code of Medical Ethics standards, including E-8.06 Prescribing and Dispensing Drugs and Devices and E-8.061 Gifts to Physicians from Industry.) Another group is the Pharmaceutical Research and Manufacturers of America (PhRMA) which has published a voluntary code of conduct on product and marketing interactions with physicians and other health care professionals. Several states (e.g., Minnesota and Vermont) have also enacted legislation setting financial caps on pharma payments to physicians, as well as requiring disclosures of such payments to the public. In addition, a handful of medical schools and health care institutions (e.g., Stanford University School of Medicine, University of Pennsylvania School of Medicine, and Boston Medical Center) have adopted policies which prohibit or severely limit meals, gifts, etc., from drug companies in an effort to curb the influence that such companies may have on their medical students and physicians. Critics have responded that such efforts — while laudable — are still insufficient to eliminate the ethical concerns and conflicts of interest associated with physician-pharma relationships. Indeed, they have been quick to point out that current guidelines and regulations can oftentimes be easily ignored and/or circumvented — and that most are without any penalties for non-compliance. Moreover, they assert that such efforts do little to empower and educate patients on physician-pharma financial ties. For example, in a recent report published in the Journal of the American Medical Association, researchers evaluating two states’ pharma payment disclosure laws (Minnesota and Vermont) found that the laws not only produced data of “poor quality,” but also failed “to provide the public with easy access to information about these payments.” As a result, researchers concluded that, “in either state, individuals [would] have difficulty determining the number or value of payments that their physicians received from a specific company or from all companies combined.” In light of such criticisms, as well as growing concerns about escalating prescription drug costs, Congress has recently begun to take a closer look at physician-pharma industry ties. In June 2007, the U.S. Senate Special Committee on Aging conducted a hearing entitled, Paid to Prescribe? Exploring the Relationship Between Drug Companies and Doctors, for the purpose of examining the financial relationships that exist between physicians and drug makers. The committee heard testimony from representatives of the AMA and PhRMA, as well as representatives of the medical community. Committee members also weighed in with their own concerns about how pharma industry payments may affect physicians’ prescribing habits. As part of his opening statement at the hearing, committee chair Senator Herb Kohl (D-Wisconsin) commented that pharmaceutical industry “gifts and payments can compromise physicians’ medical judgment by putting their financial interest ahead of the welfare of their patients.” He further noted that, “while there are voluntary guidelines already in place, it is clear they are not being followed.” Senator Kohl then went on to propose a national registry to require the disclosure of drug company payments and gifts stating that, “We need transparency . . . Many of these gifts are not illegal, but we need them disclosed. These interactions involving things of value between the pharmaceutical industry and doctors must be made public.” Keeping true to his word, in September 2007, Senator Kohl introduced, along with his colleague Senator Chuck Grassley (R-Iowa), the Physician Payments Sunshine Act. The bill would require drug and medical device manufacturers with more than $100 million in annual revenue to report “payments” to physicians which exceed $25 in value. (Payments are defined therein to include any compensation, food, entertainment, gifts, trips, travel, products, honorarium, speaking fees, consulting fees, discounts, participation in conferences or CME, cash rebates, or any other economic benefit. Product samples intended for patients and payments for clinical trials are excluded.) Manufacturers would have to disclose physician names, addresses, facility affiliation (if any), and the date, value and nature of any payments -- with such payment information being made publicly available through an “Internet website that is easily searchable, downloadable, and understandable.” In the event a manufacturer fails to report this physician payment information, the company would be subject to fines not less than $10,000, but no more than $100,000, for each failure. Senator Kohl’s proposal of a national registry of pharmaceutical payments is apparently gaining momentum with other members of Congress. Recently, the AMA reported that U.S. Representative Peter DeFazio (D-Oregon) has plans to introduce similar legislation in the U.S. House of Representatives. According to the AMA, the legislation could be more expansive than the Physician Payments Sunshine Act put forth by Senators Kohl and Grassley, by applying to companies with less than $100 million in annual revenue. As such, 2008 could prove to be a very active year for legislators, consumer advocates, and lobbyists given the growing Congressional interest in making physician-pharma financial relationships more transparent to patients. Jennifer L. Griffin is a member of the Burr & Forman LLP Health Law Practice Group. January 2008