Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI), and Rep. Peter DeFazio (D-OR) and Ways and Means Health Subcommittee Chairman Pete Stark (D- CA) have all introduced legislation known as the Physician Payment Sunshine Act. The proposed Act would require drug companies to file quarterly reports disclosing payments of $25 or more made to physicians for speaking, consulting, travel, gifts, food, etc.
Eli Lilly and Co. has volunteered to disclose payments of more than $500 to doctors who are compensated for acting as advisors or speaking at educational seminars. But this falls far short of the requirements of the proposed Physician Payment Sunshine Act.
The purpose of the Physician Payment Sunshine Act is to deter drug companies from paying physicians to improperly influence medical decisions. Recently, two of the largest drug companies in America—Amgen and Johnson & Johnson—were found to have been paying doctors hundreds of millions of dollars to prescribe anemia medications that were recently found to be unsafe at commonly used doses.
Amgen, maker of Aranesp and Epogen, and Johnson & Johnson, maker of Procrit, have been competing for the market in anemia drugs. Although federal laws bar drug companies from paying doctors to prescribe medicines that are given in pill form and purchased by patients from pharmacies, drug companies have found a way around this by offering rebates.
Big users of these drugs, such as cancer doctors and kidney dialysis centers, buy the drugs from the companies and receive rebates. They also get reimbursements from Medicare or private insurance companies, often at a markup over the doctors’ purchase price. The office manager of a group of six cancer specialists in the Pacific Northwest came forward and admitted that his employers prescribed $9 million worth of Amgen’s drugs and received $2.7 million in rebates. The six doctors made approximately $1.8 million in net profit on the drugs.
There is little evidence that the drugs make much difference for patients with moderate anemia. And according to federal statistics, increased use of the drugs has not improved survival in dialysis patients.
Although most physicians claim that free lunches or trips have no effect on their medical judgment, research has shown that these gifts or forms of compensation can affect how people act, including publishing positive findings and suppressing negative information.
Minnesota, Vermont, West Virginia, Maine and D.C. currently have laws requiring disclosure of payments from drug companies.