PharmExec Blog

The Trouble with Transparency


Jacky Law

Guest blog by Jacky Law

A couple of weeks ago I attended an industry awards dinner and had an interesting conversation with an eminent doctor who shall remain nameless. The doctor in question works in a highly specialized area and frequently talks about her research at conferences around the world. She always travels first-class and has come to expect accommodation at the best hotels, courtesy of the people who have invited her to speak, which may be a drug company or the conference organizers. She believes she is worth the extra expense and does not think for a second she is abusing the system.

But she was worried about a colleague in Italy who works in the same area and who has had a holiday home paid for in its entirety by a drug company. He also believes he is worth it. The area of medicine in question is highly competitive and I suspect both doctors earn their perks as far as the pharma companies are concerned.

The trouble is that in an era of transparency, other stakeholders get a look-in and conflicts arise, as UK readers will know from the furore that arose after expenses claimed by their Members of Parliament (MPs) were disclosed recently. In that uproar, it was clear that many MPs also thought they had done nothing wrong, even when their expenses ran to extremes such as the cleaning of a personal moat.

This was not how the electorate saw it and lots of MPs’ reputations and the integrity of the system took a hard knock. The doctor I was talking to wondered if the new fashion for transparency in pharma circles would similarly impact the medical profession.

As well she might. Just a few days earlier, Merck & Co had disclosed it had paid 1,078 doctors and nurses in the US a total of $3.7 million from July to September to talk to colleagues about company products and healthcare related to those products. On average, these professionals were paid $1,548 but the highest earner received $22,693, and several doctors got more than $10,000 — not inconsiderable sums.

Merck is not alone. Eli Lilly was the first to fall in line with new thinking on payments to physicians and GlaxoSmithKline, Pfizer and Johnson & Johnson are among others to say they will follow suit. Indeed, all pharma and medical device companies in the US will be compelled to disclose information on their payments to physicians if the Physician Payments Sunshine Act 2009, which was folded into the health reform bill approved last month by the Senate Finance Committee, becomes law. The act sets fines of up to $1 million for knowingly not reporting payments to doctors of more than $100 in a year.

So far the disclosures only focus on the US, but the arguments of Senators Chuck Grassley and Herb Kohl, who introduced the legislation, are equally persuasive in Europe. Timing is everything. The two senators had tried to introduce a similar bill a couple of years ago but it was not even considered by Congress. Now it is strengthened by incorporating many of the recommendations of the Medicare Payment Advisory Commission, an independent agency that advises Congress. Even if the act isn’t passed, many Big Pharma companies see compliance with its spirit as essential to repairing the damage the industry’s reputation has suffered in recent years. They probably also reckon it will save them money as it dawns on doctors, like the one I was talking to, that they also have reputations to protect and may well settle for less to speak on a company’s behalf.

The truth is that ordinary people, like the UK electorate when presented with what their representatives had been getting away with for years, see things differently from MPs or doctors. And having pharma companies pay for second homes doesn’t sound like a terribly impartial way of doing things.

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