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Medtech and Pharma Firms Paid $6.5B to Docs in 2014

Last year marked the first full year in which CMS tracked payments from industry to doctors.  

Brian Buntz

Domestic pharmaceutical and medical device companies paid physicians $6.49 billion last year, based on data gathered through the Sunshine Act, a provision of the Affordable Care Act. In all, more than 600,000 physicians and 1100 teach hospitals received payments from drug and device makers.

The government database, which is searchable via an online portal gathered by CMS, provides details on the date of the payment, the amount, and what it covered. The payments are loosely organized into groups: general payments made to physicians, which cover items such as food and beverages as well as travel and lodging; and research payments made to physicians, hospitals, and clinics.   

Approximately half of the money in 2014--$3.23 billion--supported research. The largest payments tended to be related to research on drugs that were already on the market.

Proponents of the law support the provision's ability to expose conflicts of interest. "Relationship between companies and physicians could, under certain circumstances, lead into undesirable outcomes for patients," said Stefanos Zenios, PhD, a professor at Stanford University (Palo Alto, CA) in 2012.

Critics of the law have derided the low threshold it sets for payments (any payment to a doctor over $10 must be listed), arguing that value of the information gathered is questionable while the costs of complying with the law are high--especially for startups. "The legislation could accelerate the trend where you see companies, especially early-stage start ups, go outside of the United States to do their product development work and to bring their products to the market," Zenios said.

The American Medical Association recently released a similar statement, explaining that it criticizes inappropriate, improper payments from industry to doctors, but adds that the relationships between the two can help foster innovation while educating doctors. It also calls for safeguards to ensure the accuracy of the data while asking for more context to help explain the nature of payments. "[B]ecause of issues with the implementation of the law, the AMA believes that certain safeguards are needed to ensure the information is depicted correctly and in context to be useful for patients and fair to physicians," reads part of a statement from the AMA.

The AMA further states that the CMS Open Payments program has been "plagued by significant shortcomings that call into question the accuracy of information published, including an overly complex registration process and inadequate opportunity for physicians to review their individual data."

Other trade groups have also criticized the implementation of the law. Last year, Pharmaceutical Research and Manufacturers of America, BIO, and AdvaMed penned a letter to questioning why CMS reserved the right to withhold "as much as one-third of the data that was submitted by manufacturers and group purchasing organizations to the Open Payments system for the first reporting period." "It is not clear why this volume of data is being withheld," that letter stated, referring to incomplete data published by CMS for 2013. Ultimately, more than one third of the data from 2013 was redacted.

For 2014, the first full year that such data were collected, 99% of the payment data was published.

Later in 2014, a variety of trade groups criticized the database for being riddled with errors.

Refresh your medical device industry knowledge at MEDevice San Diego, September 1-2, 2015.

Brian Buntz is the editor-in-chief of MPMN and Qmed. Follow him on Twitter at @brian_buntz.

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