Texas Malpractice Lawyer

Janury 16, 2012 — New York Times reports that the Obama administration will soon be acting to require companies that manufacture drugs or medical devices to disclose all money that they pay to doctors. The move is intended to increase transparency, after it was discovered that one out of four doctors accept payments from drug companies — sometimes millions of dollars. It is common practice for companies to pay doctors large sums of money for research, consulting, speaking, travel, and entertainment. Advocates for consumers say that new laws will help prevent outright bribery of doctors, and improve the public knowledge about how much money their doctor is receiving, and from whom.

The Times has already found that 1/4 of doctors accept payments, and 2/3 accept gifts of food from companies promoting their products. It seems clear that such engagements could lead to a conflict of interest, because while most patients assume that their doctor is only looking out for their patients’ best interests, this may not be the case. A doctor who has been influenced by a drug company may be more likely to prescribe a medication to a child. As an example of inappropriate payments made to doctors, the U.S. Department of Health and safety pointed to manufacturers of hip and knee replacements, who paid doctors large sums of money in both research and surgery to promote their products.

In addition, a doctor who has been paid by a drug company may be more likely to prescribe a patient with a higher cost version of a drug, rather than its lower-cost generic or a cheaper equivalent. A policy that increases transparency could potentially reduce costs to the American taxpayer, because doctors who over-prescribe medications would be obvious, so perhaps they would be less likely to act in the favor of the drug company rather than the patient or the government picking up the tab.

In addition, patients would be able to make their own decisions about whether to trust the judgment of a doctor who is receiving large amounts of money from a drug company or medical device company.

The proposed transparency laws would only affect medical device companies that have at least one product covered by Medicare or Medicaid — about 1,100 companies. They would all need to submit reports about how much money they paid to doctors, and to which doctors. The report would be subject to audits. Accidental omissions would be subject to a $10,000 fine. Intentional omissions would be subject to a $100,000 fine, up to $1 million per year.

The U.S. government runs two federal programs to pay for the medical care of older Americans, the disabled, and the poor — Medicare and Medicaid. U.S. taxpayers pay more than $100 billion on these two programs annually. As the fallout from the recession begins to hit social programs such as these, they are facing new scrutiny. It is hoped that with additional transparency in the link between drug companies and doctors, the American taxpayer will be spending less on these programs because doctors will be less likely to be swayed by drug/device companies into over-selling products.

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