In July 2008, the U.S. pharmaceutical industry announced a revised code of conduct for its dealings with health providers. The industry action was spurred by the “Physician Payments Sunshine Act” sponsored by Senator Charles Grassley, a proposed federal law that would compel researchers to disclose fully any financial connections to drug companies.
In recent weeks, the call for transparent relationships between drug companies and doctors has gained prominence in two recent stories. First, Eli Lilly and, shortly thereafter, Merck announced their intention to begin posting online databases of all payments to physicians for speaking and consulting beginning in 2009.
Second, on October 3, the New York Times published the latest in a string of recent stories of physician nondisclosure of payments from so-called “big pharma,” in this case that Emory University psychiatrist Charles Nemeroff, M.D. failed report over a million dollars of income from drug makers, in violation of federal research rules. This follows similar stories about prominent researchers at Harvard, University of Cincinnati, and Stanford is adding “fuel to the fire” and increasing the likelihood of significant federal limitations on the relationships between physicians and drug companies.
Recommended Action: The attention that drug (and device) company payments to doctors are receiving may be out of line with the scope of the problem, but the momentum on this issue is unmistakable. Both the pharmaceutical industry and the American Medical Association are responding to public perception in supporting Senator Grassley’s efforts, and each new story in the lead-up to the passage of the bill strengthens this perception and creates the risk of even stricter rules.
The reality is that a very narrow group of academic physicians (who, in turn, are a narrow constituency within physicians) receive compensation from pharmaceuticals for speaking about drugs or advising on drug development or drug trials. As for the broader distribution of small benefits, such as “the routine provision of office breakfasts and lunches, or the occasional invitation to educational dinners at fancy restaurants,” it is difficult to believe that these benefits have significant, long-term impact on physician decisionmaking. The real issues in the relationship between physician compensation and decisionmaking, however, may be too compex to be addressed. In the meantime, it is unquestionably a good practice to ensure transparency and appropriate disclosure of financial interests in all healthcare businesses.
Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson advises physicians and other healthcare providers in regulatory compliance and business matters. For additional information, please contact him at harry@fentonnelson.com
©Harry Nelson 2008
California Healthcare Law 