Sunshine Law Exposes Vast Industry Payments to Physicians

After years of delay, the Physician Payments Sunshine Act — a federal law intended to shine a bright light on the payments that flow from the pharmaceutical and medical device industries to physicians — finally went into effect in 2014. The initial data released under the law revealed a staggering amount of industry money paid to physicians last year.

The Sunshine Act, which was championed by Sen. Chuck Grassley,[1] is a short provision tucked within the Affordable Care Act, the 2010 law that established what is commonly referred to as Obamacare. The provision requires manufacturers of drugs and medical devices to report to the federal government payments and gifts to physicians and teaching hospitals.[2] The law also mandates that these payments — along with the names of the companies, physicians and hospitals involved — be made public.[3]

On Sept. 30, the Centers for Medicare and Medicaid Services, the agency charged with implementing the Sunshine Act, released the first batch of data on industry payments to physicians and teaching hospitals. Although the initial data spanned only the last five months of 2013,[4] the total value of the payments and the number of physicians involved are striking:[5]

• The disclosed payments totaled $3.5 billion. (Another $1.1 billion in payments were not disclosed for various reasons permitted under the Sunshine Act.)
• The number of reported payments totaled 4.4 million.
• Approximately 546,000 physicians and 1,360 hospitals received payments.
• The breakdown of payments by purpose was: $1.5 billion for research; $1 billion for company stock; $380 million for speaking and consulting fees; $302 million for royalties and licenses; $167 million for travel, food and lodging; and $128 million for other purposes.[6]

While some of these payments may seem appropriate — such as those related to the conduct of industry-funded clinical trials — the majority of them have a corrupting influence on the practice of medicine. Financial relationships between physicians and industry can subtly and not so subtly influence the opinions and recommendations of health care providers in a variety of settings, including during the delivery of medical care, Food and Drug Administration advisory committee meetings, and the deliberations of expert panels that develop clinical practice guidelines. Indeed, the primary reason companies make so many payments and gifts to physicians is implicitly to influence their prescribing practices.

Ultimately, the bottom-line financial interests of the companies are not aligned with the best interests of patients.

References

[1] Chuck Grassley, United States Senator for Iowa. A ray of sunshine on drug company payments to doctors. http://www.grassley.senate.gov/about/ray-sunshine-drug-company-payments-doctors. Accessed October 19, 2014.

[2] Public Law 111–148. March 23, 2010. http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf. Accessed October 19, 2014.

[3] Ibid.

[4] Frieden J. Sunshine Act database debuts to skepticism. October 1, 2014. MedPage Today. http://www.medpagetoday.com/PublicHealthPolicy/GeneralProfessionalIssues/47901. Accessed October 19, 2014.

[5] Centers for Medicare and Medicaid Services. Open payments data fact sheet. October 1, 2014. http://www.cms.gov/OpenPayments/Downloads/Fact-Sheet-Sept-30-2014-Published-Data.pdf. Access October 19, 2014.

[6] Thomas K, Armendariz A, Cohen S. Detailing financial links of doctors and drug makers. September 30, 2014. The New York Times. http://www.nytimes.com/2014/10/01/business/Database-of-payments-to-doctors-by-drug-and-medical-device-makers.html?_r=0. Accessed October 19, 2014.