The Latest Big Pharma Scandal

Payments from drug companies are rampant and perfectly legal, which is why the new Sunshine Act is the first step in cleaning up medicine

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Imagine yourself in front of your computer, looking up information about a drug prescribed by your doctor. Your Internet search tells you that there is a cheaper, maybe even a generic version available, but you have just paid top dollar for the brand name drug. You also learn that another treatment may be safer than the prescription you just filled. Now imagine you discover that your doctor gets paid by the manufacturer to promote the drug to other doctors.

There are various words for this sort of financial transaction, when, say, a radio disk jockey is paid by a recording studio to play a song or a broker is paid to tout a stock — both of which, by the way, are illegal. In medicine it’s called a financial conflict of interest, although “pharmapayola” is in some ways more accurate. It’s perfectly legal, and it’s rampant. In a survey published in the Archives of Internal Medicine in 2010, 28% of physicians reported that they received some kind of payment from a drug company to serve on a speaker’s board, as a consultant, or on an advisory board. Other bennies handed out by companies included free drug samples, tickets to sporting events, meals at five-star restaurants and all-expenses paid trips to medical meetings in nice locales.

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As of this year, doctors who accept gifts and payments from drug and device makers will see their names on the web, the result of the 2010 Physician Payment Sunshine Act, one of the most controversial provisions in the health care reform law. Companies will be required to report any gift or payment to a doctor or academic researcher over $10, whether it’s in the form of stock options, speaking fees, box seat tickets, knickknacks for the doctor’s office or travel to a medical conference. Doctors will also be required to disclose payments and gifts.

Some critics complain that the Sunshine Act will stifle innovation — that money and time better spent on coming up with better treatments will be diverted to nitpicking bureaucracy. The “pharmascolds” who support the legislation, they say, are demeaning doctors. One such critic is Tom Stossel, a Harvard physician (he takes money from Merck and Pfizer), who claimed in a recent op-ed in the Wall Street Journal that conflicts of interest don’t matter to patients and don’t harm them.

But a mountain of evidence says otherwise. Numerous studies have found that doctors who accept free gifts and payments are more likely than those who don’t to prescribe “irrationally.” They prescribe an expensive brand name drug when a cheaper generic will do, or a less effective, more dangerous version when there’s a better alternative. Even more troubling, medical research on devices (such as pace makers and hip replacements) and drugs is routinely biased when the researchers have conflicts of interest.

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Other critics of the law worry that disclosure won’t do any good, that many doctors will continue taking the money even if their names are put up in lights on the web. They’re right: disclosure alone doesn’t discourage behavior, it’s the shame that goes along with it, and there are hints that even the prospect of being exposed for having a conflict of interest is starting to discourage doctors from taking the money. Between 2004 and 2009, the number of doctors with a financial relationship with industry declined from 94 to 84%.

Of course, drug and device manufacturers are not stupid. Drug companies spent at least $220 million last year just on speaking fees to doctors. They spread that kind of money around because it works: it helps them sell more product. As doctors become more wary, companies have begun to target nurses and pharmacists, who can also influence the drugs you take. The Sunshine Act is just the first necessary step in cleaning up medicine.