Pharmaceutical companies spend billions of dollars on marketing every year, and a big chunk of it goes directly to the doctors who prescribe their products to patients. Several states have decided to clamp down on these practices, requiring drug companies to disclose all gifts or payments to doctors.
The Vermont Legislature recently passed the strictest bill to date, and it is expected to become law next month. Vermont state Sen. Peter Shumlin, who sponsored the bill, says the state is trying to take a leadership role in what he calls a national problem.
Just in the state of Vermont, with its 600,000-plus citizens, the industry spent almost $3 million last year, Shumlin says. "So you can imagine if the problem is that large in Vermont, they're spending hundreds and hundreds of millions of dollars undertaking this practice in states like California and New York."
The Vermont legislation doesn't preclude drug companies from spending their millions to influence physicians' prescribing practices, he says.
But if they do, the state wants to ensure that Vermont's consumers know exactly how much their doctor has profited and where the money came from. "We think the best way is pure transparency," Shumlin says.
The pharmaceutical industry already asks its members to voluntarily stop giving "noneducational" gifts — such as pens or notepads — to doctors.
The freebies doctors do get from drug companies range from meals to trips to theater tickets. These gifts come with the opportunity for a company to influence a doctor's decisions, Shumlin says.
Sometimes a company might compensate physicians for lecturing at conferences or providing other services. Shumlin says this kind of paid relationship directly affects the patient, citing a recent report from the Institute of Medicine of the National Academies.
The report "indicated that the acceptance of meals and gifts and cash payments influences the prescribing practices of physicians and health care providers, and often leads to the prescription of a particular drug that doesn't have the same outcomes or beneficial effects on the patient that another drug might have," Shumlin says.
"So in other words, it drives consumers to higher-cost medicines."
A Federal Bill In The Works
In Congress, Iowa Sen. Charles Grassley is co-sponsoring a bill like Vermont's. Grassley emphasizes that the goal of the bill is similar to Vermont's: transparency without making the marketing practices of drug companies illegal.
The federal government is a huge purchaser of health care services and products, Grassley says, and the bill intends to protect those federal consumers as well as extend protection to the private sector.
The federal bill wants to disclose all transactions above $100. "If you go to your local doctor," Grassley says, "you ought to know if he's giving a lecture at some pharmaceutical seminar and got paid for doing it."
"If he's subscribing to that company's product and saying you should take it, you ought to know that," he says. "You make the choice as the consumer.
Loopholes Too Large?
Shumlin is in support of a bill that's as tough as Vermont's, but is skeptical of the current federal version. "When you start to read the federal bills, you find that, in fact, they have huge loopholes in them."
Last year's version of the bill, for example, had an exclusion that exempted the disclosure of payments from third parties, he says.
"What that means is that instead of having the pharmaceutical industry make direct payments to the health care provider, all they had to do was hire an advertising company [or] a consulting company to make those payments and it wouldn't be reported.
"So I have very little confidence that a bill will ever pass in Washington that doesn't pre-empt state laws that actually make a difference."