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Pharmaceutical Companies Forced to Disclose Doctor Payments

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In an attempt to stymie medical conflicts of interest, the U.S. government is set to require drug firms to report payments they make to physicians for research and consultation, travel, speaking engagements and entertainment. It has long been suspected that such payments can have a large influence on how doctors practice medicine, and can contribute to higher costs by encouraging the use of more expensive drugs and medical devices. The new health care law is designed to increase the likelihood that doctors will make decisions in the best interests of patients, without regard to the their own financial gain.

Free Defective Drug Lawsuit Evaluation: If you or a loved one has been injured by a defective drug, you should contact our law firm immediately. You may be entitled to compensation by filing a suit against the manufacturer of the medication and we can help.

What’s the problem?

January 16, 2012 - According to an article published today in the New York Times, large numbers of doctors around the country receive substantial payments that can run into the hundreds of thousands and even millions of dollars for consultations and public lectures. Research conducted by the Times and others has found that about a quarter of medical physicians take money from pharmaceutical manufacturers, and that nearly two-thirds accept gifts such as food for staff members and themselves.

Taking these figures into consideration, it stands to reason that doctors who take money have the potential to practice medicine differently from those who do not, and that they are more willing to prescribe experimental medications in risky and unapproved ways.

Under the new health care law, if a company has just one drug or device covered by Medicare or Medicaid, it will have to report all its payments to physicians other than its own employees. The payment information will then be posted on a website where it will be made available to the public.

Pharmaceutical manufacturers will have to disclose if they provide payments to a doctor for helping to develop, assess or promote new products. Royalty payments and money to teaching hospitals for research and other activities will also have to be reported under the new law.

Recent estimates have found that more than 1,100 companies will have to file reports, resulting in huge amounts of new information about doctor payments. The Obama administration has stated that it will inspect and audit all new data to make sure reports are comprehensive and accurate.

For each payment that a company fails to report, a penalty of up to $10,000 will be imposed. If the company knowingly covers up payments, a $100,000 fine will be assessed for each violation, up to a total of $1 million a year.

The new requirements are currently three months overdue. Under the healthcare law, a payment reporting system was supposed to have been established by Oct. 1, 2011. The public will have until Feb. 17 to comment on the new policies, after which Medicare officials will issue final rules with the force of law.

Consumer watchdog groups have long demanded information regarding the financial ties between doctors and pharmaceutical companies.

“Patients want to know they are getting treatment based on medical evidence, not a lunch or a financial relationship. They want to know if their doctor has a financial relationship with a pharmaceutical company, but they are often uncomfortable asking the doctor directly,” said Allan J. Coukell, a pharmacist and consumer advocate at the Pew Charitable Trusts.

For its part, the Obama administration has stated that the public can benefit when physicians and companies work together to develop new, potentially life-saving medications and devices. However, the administration also believes these relationships can“lead to conflicts of interests that may affect clinical decision-making” and “threaten the underlying integrity of the health care system.”

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Free Defective Drug Lawsuit Evaluation: If you or a loved one has been injured by a medication, you should contact our law firm immediately. You may be entitled to compensation by filing a defective drug suit and we can help.

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