Will Pharma Finally Have To Fess Up?

New efforts are under way to limit or make public its billions in giveaways to doctors

It's no secret that some drug companies pay for doctors to attend medical conferences in exotic locales. Others treat them to pricey meals and pass out pens and Post-it notes branded with product names. All told, drug and medical-device makers dole out an estimated $19 billion worth of gifts to physicians every year--a practice that worries New Jersey Attorney General Anne Milgram, among others. On Sept. 19 she summoned a task force to consider putting limits on this orgy of gratuities. Although New Jersey wouldn't be the first state to pass laws, any action there would have a huge symbolic impact: The Garden State is home to many of the world's largest pharmaceutical companies, including Merck & Co. (MRK ) and Johnson & Johnson (JNJ ).

Milgram is the latest high-placed party pooper to probe how the medical industry sways physicians' treatment choices. "Patients should be getting prescription and device recommendations based on what's best for them, not based on financial incentives doctors receive from companies," Milgram says. Four states and the District of Columbia have already passed laws requiring companies to disclose payments and other handouts to physicians. Federal lawmakers are on board: On Sept. 7, Senators Chuck Grassley (R-Iowa) and Herb Kohl (D-Wis.) introduced a bill requiring detailed, nationwide reporting of which companies are giving gifts, how much those gifts are worth, and who is taking them.

The trade group Pharmaceutical Research & Manufacturers says in a statement that doctors learn about new treatments from interactions with sales reps, and the legislation "could discourage this critical educational component."

In any event, exposing the largesse may not be enough to curb it. In Vermont, which passed its disclosure law in 2002, payments to some specialists are increasing at runaway rates (table). Among psychiatrists, the 11 biggest gift recipients netted an average of $45,692 each last year--a 119% jump over what they got in 2005. Julie Brill, Vermont's assistant attorney general, says the law has triggered a "robust dialogue" among professional organizations in the state, "but I cannot tell you it has reduced the payments."

Part of the problem is that even where states insist on disclosure, the data are incomplete, inaccessible, or both. With the exception of Minnesota, the states don't release full details, partly because drugmakers say the payments are driven by marketing strategies that should be protected as trade secrets.

In Minnesota, patients can learn how much their doctors have collected from medical-products makers, though it's not easy. At the Minnesota Board of Pharmacy, disclosures of pharma gifts are on a Web site, but they're not searchable by company or physician name. "The data collection is extremely crude," gripes Peter Lurie, deputy director of consumer advocate Public Citizen's health research group. The Minnesota board is working on making disclosures searchable, says Executive Director Cody C. Wiberg.


Senators Grassley and Kohl believe their bill will make up for the shortcomings of state laws. They propose that companies be required to report details of all payouts worth more than $25, including complete descriptions of the gifts and the names and addresses of physicians who receive them. Kohl's press secretary, Ashley Glacel, says the senator is calling for "a national registry that would be online and easily searchable."

Federal and state legislators are in for a tough fight from the mighty pharmaceutical lobby, which has beaten back most efforts to restrain drug marketing. Congress passed a sweeping drug-safety bill on Sept. 20, but not before stripping out provisions that would have limited the ability of pharma companies to advertise drugs directly to consumers. And in 11 states that weighed legislation to expose pharmaceutical gift-giving, the bills either stalled or were voted down.

That doesn't bode well for Senators Kohl and Grassley or New Jersey's Milgram, says Dr. Jerome Kassirer, a professor at Tufts University School of Medicine and drug industry gadfly. "My guess," he says, "is that pharma will push hard to sabotage this."

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By Arlene Weintraub

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