Medical Providers Reap Billions from Promoting Products (Updated)

Last year, the federal government launched Open Payments, a database that tracks the dollars that flow from drug and medical device manufacturers to medical providers. Last week, it reported that $6.5 billion was paid last year to doctors and hospitals, for a range of services and, well, graft.

More than 600,000 doctors received payments, as well as about 1,100 teaching hospitals.

As reported by the Associated Press (AP), $3.2 billion went to fund research, about $2.6 billion was for miscellaneous items and about $700 million represented investments and ownership stakes.

Approximately 8 in 10 dollars went to doctors, “whose prescribing decisions,” the story noted without editorializing on the potential conflict of interest of this arrangement, “affect the fortunes of pharmaceutical and medical device manufacturers.”

A more thorough analysis of this pay-your-pal arrangement was made by ProPublica and NPR, which identified individuals who reaped the biggest bounty.

Meet Dr. Ana Stankovic of New Hampshire, for whom, according to ProPublica/NPR, “[f]ew days went by last year [when she] didn’t receive a payment from a drug company.

[Note: See postscript at the end of this piece for a response by Dr. Stankovic.]

“All told, 29 different pharmaceutical companies paid her $594,363 in 2014, mostly for promotional speaking and consulting, but also for travel expenses and meals, …”

Although she received payments on nearly every workday of last year, she still ranked only about 250th in her total take among the hundreds of thousands of U.S. doctors who received payments last year.

Although it’s hardly news that providers are well paid by the pharmaceutical industry, the newly released data demonstrate the range of specialists who cash in. They include dentists, optometrists, podiatrists and chiropractors, but, as the story made clear, “What is being seen for the first time now is how ingrained pharmaceutical companies and their sales reps are in the lives of those who write prescriptions for their products. A ProPublica analysis found that 768 doctors received payments on more than half of the days in 2014. More than 14,600 doctors received payments on at least 100 days in 2014.”

Some might not have collected a lot of money, just a little, but almost every day. Dr. Juichih Hsu, a family medicine practitioner in Maryland, received payments on 286 of the 365 days last year, more than anyone else. Sometimes, she received meals from several drug companies … on the same day.

Some observers consider this practice, well, networking. Dr. Aaron Kesselheim, associate professor of medicine at Harvard Medical School, told the reporters, “Every day it’s another drug company coming in for a lunch. Sometimes it may be some drug companies are bringing breakfast and some are bringing lunch and it’s just part of the culture of the practice.”

Uh huh. And sometimes that culture seems rotten.

Dr. John Fritz, of New Jersey logged payments of $232,003 over 256 days last year from drug and device makers. In June, he was charged with fraud and bribery for referring patients over several years to a medical imaging company in exchange for about $500,000 in kickbacks. It’s logical to wonder about the connection.

Such extensive contact with industry reps, Kesselheim told ProPublica/NPR, can signal less than a best-practice approach to how doctors prescribe drugs; that is, they’re getting information from the companies that make the drugs, not necessarily in equal measure with the impartial science that analyzes them. “There’s good evidence that that affects prescribing practices and physician behavior,” Kesselheim said.

Are you surprised that the drugs Stankovic got paid to promote are unusually expensive for the patient? H.P. Acthar Gel, prescribed for multiple sclerosis, runs about $39,000 per prescription, despite no evidence that it works better than less expensive drugs. (Stankovic also was paid to promote a drug for serious a kidney disease called Soliris. It’s among the most expensive drugs in the world, but is considered highly effective.)

ProPublica/NPR found big differences in the number of industry interactions among physicians in different specialties. Rheumatologists, who specialize in the treatment of arthritis, lupus and scleroderma, averaged 40 days of interactions with drug and device companies, the most of any other large specialty. Next were endocrinologists (who treat diabetes, among other disorders) and two kinds of heart specialists, electrophysiologists and interventional cardiologists. Specialists with the fewest drug and device maker interactions were dentists, chiropractors, neonatologists and pathologists.

Among the commercial participants, Genentech Inc. spent the most on general payments (that is, not for research), $387.7 million, mostly royalties for its cancer drugs Rituxan, Avastin and Herceptin to City of Hope National Medical Center in Duarte, Calif., a major cancer center. AstraZeneca, Pfizer and Allergan were other big spenders in the category of general payments.

Royalty fees accounted for $803.5 million in general payment spending in 2014, more than any other category. Those fees, based on sales of a product, are paid by device manufacturers to physicians who work with the company to invent the device. Next came promotional speaking ($632.4 million) and consulting ($369.4 million). Food and beverages accounted for the highest number of payments by far, 9.4 million, but these had a relatively low value of $224.5 million.

Open Payments does not report the value of drug samples left at doctors’ offices nor most of the money companies spend on independently administered continuing medical education, which they support with unrestricted grants.

ProPublica has been tracking industry payments to doctors since 2010 through its online database, Dollars for Docs. (Research and ownership payments are not shown in Dollars for Docs.)

Professional networking can yield benefits for all participants, and in the case of medicine, patients, too, can benefit from productive relationships their providers have with the companies that make therapeutic products. But because those relationships are ripe for abuse, patients must be bold when their doctors recommend or prescribe any drugs or devices: Ask why he or she chose that particular therapy, what is expected from its use and how soon, what are the risks and potential side effects, and, if the provider has ever accepted payment from the manufacturer. If so, find out what it was for, and over what period of time. Ask if your doctor submits reports to Open Payments, which is voluntary for providers.

The answers will help you know whether your doctor is recommending something because it’s scientifically a good idea, because they want to keep their business relationship in good shape or both.

Postscript: Dr. Stankovic contacted me about the references to her in this blog post. The dollar numbers appear to be accurate, but she says the piece makes some misleading statements. I’m happy to correct anything that is not right.

* She says most of the money she was paid last year was for reimbursement of travel.

* She says she has a consulting practice that explains why she is paid this much.

* She believes she is not promoting expensive drugs because she has been paid to do so, but that she is educating doctors about certain orphan drugs for rare conditions within her specialty of kidney diseases. That explains the multiple sclerosis drug mentioned in the piece, which apparently also has a use for some rare kidney troubles.

There are plenty of doctors in the District of Columbia, Virginia and Maryland — our home turf – who receive large sums from drug and device makers. A few of them have been paid well into seven figures. I placed links to the ProPublica database so readers can check those out.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
Washingtonian Top Lawyer 2011
Avvo Rating 10.0 Superb Top Attorney Best Lawyers Firm
Contact Information