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Insight & Intelligence : Sep 3, 2013
Spreading Sunshine on What Biopharma Pays Physicians
The new law requires more disclosure.!--h2>
Where biopharma payments to physicians and other healthcare providers are concerned, the names and numbers are mostly out there. But readers must wade through Internet data dumps of hundreds, if not thousands, of pages of listings that force them to keep their calculators handy as they tally what companies spent, and how many physicians and others received the money.
Washington promises to change that over the next year, as the Centers for Medicare & Medicaid Services (CMS) collects, aggregates, then publishes data on payments to providers, as required under Obamacare. CMS is supposed to launch a public website with the data by September 30, 2014, six months after companies must submit the data.
Will biopharmas use the new law to step up or cut back on provider spending? “That is the $64,000 question,” Kendra Martello, deputy vp for state advocacy with Pharmaceutical Research and Manufacturers of America (PhRMA), told GEN.
One key reason: Companies have until March 31 to report data to CMS. Another reason, she added, was because companies typically budget a year in advance: “The impact may not be immediate. It’s more likely, if I had to predict, that the impact would likely be felt over a period of time.”
Eric G. Campbell, Ph.D., director of research for the Mongan Institute for Health Policy at Massachusetts General Hospital, offered GEN another reason for uncertainty: The data will not only be used by obvious groups such as journalists, lawyers suing drug companies, physicians’ friends and family, even nosy neighbors—but by drug companies themselves.
“Say I’m working for Merck, and I want to hire a doctor. I’m going to go in and see how much that doctor is being paid by Pfizer. It’s going to create a market, if you will, for doctors’ services, which may actually drive the prices up or down depending,” Dr. Campbell said.
Pfizer spent $173 million in 2012 in payments to some 132,000 healthcare professionals and almost 1,500 research entities, Dean Mastrojohn, director, global media relations, told GEN.
“We do not anticipate any changes to our interactions with healthcare professionals as a result of Sunshine disclosures. We believe all stakeholders benefit from greater transparency and broader understanding of our interactions with health care professionals,” Mastrojohn said—comments echoed by Genentech and Novartis.
Falling Speech Payments
At GlaxoSmithKline (GSK)—which disclosed spending $84.5 million on 2012 research-related payments—spokeswoman Mary Anne Rhyne told GEN the company hasn’t seen many Sunshine Act changes related to research and physician payments.
She noted, however, that GSK physician speaking and consulting payments have declined “substantially” in recent years: “We have more tightly focused our educational programs to feature information on new medicines and medicine label changes, areas in which we believe physicians need the latest information.”
“There are physicians who have decided against participating in company programs, especially those associated with academic institutions where rules have been adopted to prohibit interaction with pharmaceutical companies,” Rhyne added.
For this year’s first half, GSK disclosed $8.8 million in grants to U.S. nonprofits “that foster increased understanding of scientific, clinical, and healthcare issues” and $6.09 million in physician speaking/consulting payments, but has not posted research payment data.
Besides GSK and Pfizer, Abbott Laboratories, Allergan, AstraZeneca, Cephalon (acquired by Teva Pharmaceutical Industries), Eli Lilly, Novartis, Merck & Co., two divisions of Johnson & Johnson, and subsidiaries of Forest Laboratories, Merck KGaA, and UCB are among pharmas agreeing to disclose at least some payments in recent years to settle federal lawsuits.
In 2012, a dozen biopharma giants spent more than $1 billion on payments to providers, led by Merck with $226 million, according to data by consultancy PharmaShine for the Financial Times. ProPublica has tallied more than $2 billion from 15 biopharmas since 2009.
Until the Sunshine Act, some drug giants including Amgen, Bayer, Sanofi, and Roche disclosed no payment data except as required by disclosure laws in Massachusetts, Vermont, Washington, DC, and West Virginia.
Roche’s Genentech subsidiary will let providers review payment data before submission to CMS through its new Sunshine Track when the secure online portal launches November 1. “Around mid-February, we will have to ‘freeze’ the data for reporting purposes, in order to meet the CMS reporting deadline,” Genentech spokeswoman Nadine Pinell told GEN.
Dr. Campbell said industry’s limited disclosure has swayed biopharma behavior in one respect: “What they have essentially done is begin concentrating their payments in certain people, key opinion leaders.”
As long as they can deliver for their companies, he said, payments will likely continue: “When hiring doctors to be promotional speakers doesn’t make them more likely to use the company’s products and services, then they’ll stop doing it.”
Section 6002 of the Patient Protection and Affordable Care Act requires disclosure of payments to providers by “any applicable manufacturer that provides a payment or other transfer of value.” The law forces manufacturers to disclose “any ownership or investment interest (other than an ownership or investment interest in a publicly traded security and mutual fund)” held by physicians or immediate family members during the preceding year.
Earlier this year CMS finalized regulations for 6002, now called the Physician Payments Sunshine Act. The law exempts reporting on indirect payments (such as travel, meals, and lodging) made through third parties to speakers at accredited continuing medical education (CME) programs. Such programs must be accredited by any of five groups: the Accreditation Council for Continuing Medical Education; the American Academy of Family Physicians; the American Dental Association’s Continuing Education Recognition Program; the American Medical Association; or the American Osteopathic Association.
Yet as many as 11 other accrediting groups serve specialists such as optometrists and podiatrists, excluding foreign groups, according to the CME Coalition. CMS’ rule may discourage doctors from some CME, PhRMA’s Martello said: “Or, they may be less likely to want to speak on a panel that is considered continuing medical education if it’s not accredited by one of those five organizations. So then, what’s the impact of that on the training and continuing education of physicians in the United States?”
The Biotechnology Industry Organization (BIO) told GEN the Sunshine Act also needs more public education by CMS about the need for physician-industry collaboration, and how it benefits patients.
“Physicians are often themselves inventors of new technologies; others provide valuable feedback, research, and technical expertise to improve existing devices,” BIO said. “It’s also important to emphasize that physicians receive critical training from companies or other skilled physicians so they can use and operate medical technologies safely and effectively.”
Do the Math
CMS envisions its payment database as “a national resource for beneficiaries, consumers, and providers to know more about the relationships among physicians, teaching hospitals, and industry.”
CMS can prove most valuable simply by totaling up the numbers industry has only partially added: “We plan to aggregate the data submitted and publish the data on a Web site that is searchable across multiple fields.”
Eli Lilly has published a helpful Q1 payment figure of $46.4 million, with pie chart. In contrast, Valeant in 2011 changed its payment reporting from specific amounts to ranges. And while Novartis’ Pharmaceuticals Division disclosed online it paid approximately $29 million in payments or transfers-of-value to physicians for the year ending September 30, 2012, a spokeswoman told GEN the figure included just that division and excluded research payments; Novartis began including data on research payments and other interactions with providers March 1.
Biopharmas face fines of $1,000 to $10,000 per failure to report each payment or other transfer of value, or an ownership/investment interest, “in a timely, accurate, and complete manner,” up to an annual maximum $150,000. Those fines balloon to between $10,000 and $100,000 for knowing failures to report each payment or value transfer, up to $1 million a year. Total combined maximum annual penalty for each entity reporting data to CMS is $1.15 million.
Yet biopharma’s biggest motivator lately hasn’t been steep fines, but cost-cutting as industry consolidates and patents for blockbusters expire. GSK’s insights on payments should spark at least a second look, if not a similar reduction by other companies. The Sunshine Act can hasten that, as well as research institutions limiting industry-physician ties to address concerns about pharma-bought doctors.
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