LINDA WERTHEIMER, HOST:
Some of the nation's largest pharmaceutical companies have slashed the payments they give to doctors and other health professionals for promoting their products. That's the finding of a new investigation by the nonprofit newsroom ProPublica. The decline in spending comes as more companies have voluntarily posted what they pay doctors who promote their drugs. And it's happening as a deadline approaches for mandatory disclosure.
Charles Ornstein of ProPublica led the investigation and he joins us now. He's in our studio in New York. Good morning.
CHARLES ORNSTEIN: Thanks for having me.
WERTHEIMER: Now, first of all, could you just kind of step back a bit and tell us the background here? How do these payments work? What do the companies want these doctors to do for them? What do they think they're getting?
ORNSTEIN: Well, for many decades, we've known almost nothing about this, but pharmaceutical companies have long worked with physicians and other health professionals to educate their peers about drugs and to help promote sales of their products. Some doctors can earn hundreds of thousands of dollars a year for speaking engagements.
Pharmaceutical companies hope this increases the, you know, sales of their products and gets them into new markets and new physician hands.
WERTHEIMER: Should the fact that docs are flogging drugs for cash make us suspicious or should we assume that they're just simply spreading the word about some good drug they routinely prescribe?
ORNSTEIN: Well, in recent years, this has been incredibly controversial. A number of pharmaceutical companies have paid huge sums, billions of dollars in some cases, to settle whistleblower lawsuits alleging that they improperly marketed their products and paid kickbacks to physicians in exchange for them prescribing their products. So I think that this has been looked upon less favorably in recent years in a number of major universities, and academic medical centers have gone so far as to prohibit their faculty members from giving these paid talks for drug companies.
WERTHEIMER: Now, you're new analysis shows that the payments have started to slack off. In one case, Eli Lilly, which is a very big manufacturer of psychiatric drugs, Lilly cut spending in half from 2011 to 2012. Could you tell us more about the kind of thing you found?
ORNSTEIN: Well, Lilly was just one example. The drug company Pfizer, which is another huge company, dropped by more than 60 percent and the world's biggest drug company in terms of U.S. sales, Novartis, they cut their payments by 40 percent. So I think that there's a couple things that are going on here. One, is these companies have some big blockbuster drugs that are losing their patents and so they're facing generic competition.
And when that happens, the companies tend to pare back spending on promoting those drugs because they're not going to be prescribed anymore. So that's going on. But on the other hand, we're also seeing this wave of transparency and as patients are able to look up and see how much money their physicians earn by working with the pharmaceutical industry, we're seeing, certainly, that the payments are going down.
WERTHEIMER: I understand the Affordable Care Act requires companies to disclose all such payments and that will start in September. Do you imagine that just shining a little light on the subject will cause these kinds of payments to drop still more?
ORNSTEIN: Well, most people think about Obamacare in terms of the health exchanges or Medicaid expansion and that's where the real focus has been, but I think this provision within the act called the Sunshine Act, has the potential to really change things up quite a bit because when all patients are able to look up their physicians and see their interactions with the pharmaceutical industry, I expect there to be a lot more give and take and questions that patients ask of their physicians.
And that could have the effect of a physician saying, you know what, it's not worth it. I don't want to have a relationship if I'm going to on a website and my patient's going to come in and instead of asking me about their health condition, they're going to be asking me about my financial relationship.
WERTHEIMER: It's been our experience in commerce of all kinds that if you find that something stops working for you, then you do something else. So if paying docs to pump up the reputation of drugs, if that's dwindling, what's next for these big drug companies? What are they going to do?
ORNSTEIN: Well, that's an excellent question. Drug companies have a lot of ways of working with physicians and other health professionals. So there are research funds. They pay them to serve on advisory boards. But also the Affordable Care Act, the Sunshine Act, does not require drug companies to disclose how much they provide to, say, physician assistants or nurse practitioners, and there's a number of folks who think that some of the funding will shift to those practitioners because it doesn't have to be disclosed.
WERTHEIMER: Charles Ornstein is a senior reporter for ProPublica. He joined us from our studios in New York City. Thank you very much.
ORNSTEIN: Thanks for having me.
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