The Dose - JK Wall

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Health Care & Life Sciences / Life Science & Biotech

Hoosier docs enjoy more than $40M a year from drug, device firms

March 20, 2015

Correction: An earlier version of this blog post stated an incorrectly high amount that Indiana's doctors were on pace to receive each year from drug and device firms. The mistake came because I reported the data released by the government as covering a four-month period, instead of the five months it actually covered. The post has now been corrected. I apologize for the error. -- J.K. Wall

New government data suggest medical device and drug companies direct more than $40 million per year to physicians in Indiana—and that doesn’t include money that goes for research.
These payments have been controversial for years—and a government Open Payments database, which went live with limited data on Sept. 30, promises to add fuel to the discussion.

So researchers at Indiana University’s Kelley School of Business did the most sensible thing: they asked patients what they think of these payments. Do they care? Do they want to know?
Turns out they do. But how patients feel about them varies based on what the money was for.

The only kind of payments that improved patients' views of their doctors, compared with doctors that received no payments from drug and device firms, were consulting fees to help develop new products. On average, the 854 patients surveyed by the IU researchers said physicians paid for consulting are viewed as “experts in the field” and “better informed about the latest treatments.” These positive views of doctors' expertise held regardless of how large the payments were.

But physicians who were paid for owning stock in a drug or device or company, or who received money for travel, suffered in patients’ perceptions of the doctors' expertise, trustworthiness and moral character. Patients also said those doctors would be less likely to act in patients' interests, and the patients said they would be less likely to choose or to follow the prescriptions of such doctors.

The research was published in February in the Journal of Law, Medicine & Ethics.

It’s not yet fully clear how the drug and device money flowing to Indiana’s doctors breaks down in those categories. But the Open Payments data, required as part of the Affordable Care Act, gives us a strong clue.
That data so far includes only payments made from Aug. 1, 2013 to Dec. 31, 2013. More data, should be coming in June.
During that five-month period, Indiana’s doctors received $19.4 million, according to the government database. If that amount were repeated for the other seven months of the year, Hoosier physicians would have received $46.3 million.
Less than half of that money, about $9 million, has been categorized. Here’s what Hoosier doctors were paid for:

-    Ownership interests, licenses and royalties: $2.8 million, or 31 percent
-    Speaking or “serving as faculty:” $2.2 million, or 24 percent
-    Food, travel and entertainment: $1.8 million, or 20 percent
-    Consulting fees: $1.6 million, or 18 percent
-    Gifts, grants and honoraria: $371,000, or 4 percent
-    Education: $197,000, or 2 percent
That means more than half of drug and device companies payments are in categories that actually hurt doctors in the eyes of their patients. That’s startling.
The IU researchers—Joshua Perry, Dena Cox and Anthony Cox—suggest drug and device companies may try to recategorize some of their payments under the more favorably viewed consulting label. They say the government should be vigilant to make sure payments are characterized accurately.
“Ultimately, the stakes are high,” they wrote. “Relational trust between a patient and health care provider is essential if a patient is going to engage in long-term, regular preventive health care, as well as to patient adherence to prescribed therapies.”

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