Public Disclosure of Drug Company Gifts: High Prescribing Physicians Not Affected


The average doctor, in accordance with the sun laws, writes less Rx for marketed drugs

The pharmaceutical industry spends billions of dollars every year to get doctors to prescribe drugs. Critics say the payments, which include gifts, meals and other freebies, contribute to the high cost of health care and create conflicts between the ethical and financial interests of medical professionals.

Some medical institutions have tried to curb direct marketing to physicians by limiting contact with sales representatives. A handful of states, as well as the Affordable Care Act of 2010, require pharmaceutical companies to disclose tip value to doctors. The ACA makes the information available on a public website.

Such “solar laws” are widely used to identify conflicts of interest – which is why political candidates must name their campaign donors. Public disclosure helps inform patient (or voter) choices and, the theory goes, induces doctors, politicians and others to avoid the appearance of unethical behavior.

Examining the Effects of Sunshine Laws

However, some ethicists believe that public disclosure may simply give the recipient of a gift “moral license” to accept gifts. Although public policy is moving toward sun laws, there is little evidence to answer a key question: With respect to payments from pharmaceutical companies to physicians, are sun laws effective?

For the average doctor, the answer is yes, suggests a document by Matthew Chao of Williams College and Ian Larkin of UCLA Anderson published in Management Science. However, high prescribers appear to be unaffected. In a study of a 2009 physician payment law in Massachusetts, Chao and Larkin found a significant decrease in prescriptions for brand-name drugs in the two years after the law took effect. In fact, because there hasn’t been a comparable increase in generic drug prescriptions, the study suggests that doctors in Massachusetts are prescribing fewer drugs overall.

This is likely because some of the drug classes in their study not only have generic competition, but also over-the-counter remedies (such as antacids and natural sleeping pills like melatonin).

This last detail supports concerns that drug company payments to doctors are not just leading to the prescribing of expensive brand name drugs instead of cheaper generics, but to over-prescribing in general. “Meals and payments from pharmaceutical companies,” the authors write, “can cause physicians to prescribe marketed drugs to patients they otherwise would not prescribe.”

Disclosure, however, has not been uniformly effective. The decline in prescriptions came mainly from physicians accepting fewer gifts and payments or refraining from them altogether. Physicians in the study who received the most payouts showed no significant change, despite prescribing a higher than average number of marketed drugs. This suggests, the authors write, “that physicians who have accepted large amounts of meals after the law simply do not respond to the disclosure.”

For the study, Chao and Larkin looked at 254 drugs in eight drug classes prescribed by more than 2,700 physicians at academic medical centers in Massachusetts. They compared data from two years before and two years after the Sun Act went into effect with the prescribing habits of nearly 2,600 medical doctors in four other states. The Disclosure Act, they estimate, led to doctors at Massachusetts medical schools writing 135,000 fewer prescriptions for marketed drugs, a drop of about 4%.

The limits of disclosure

In 2017, the pharmaceutical industry provided more than $2 billion in meals, gifts and other payments to American doctors, according to the Centers for Medicare and Medicaid Services, which tracks the payments. Massachusetts findings reinforce Previous search by university researchers and investigative journalists. An earlier study by Chao, Larkin and other researchers found that academic medical centers that had restricted visits by pharmaceutical representatives recorded a significant drop in prescriptions for marketed drugs and an increase in those for generics.

This research does not indicate that payments incentivize physicians to prescribe more marketed drugs or that there is harm to patients. Those who support the practice say visits from sales representatives – who often come with small gifts or meals for doctors and their staff – help contribute to patient care by providing up-to-date information on the latest treatments, news uses of existing drugs and possible side effects. Consultation payments — which include the cost of attending industry-sponsored conferences — also allow physicians and pharmaceutical companies to exchange information. The research lends some support to this argument: A study found that details about a new drug’s harmful side effects spread faster among physicians with industry ties than among those without.

Chao and Larkin say their findings challenge the idea that gifts and payments are simply a way to share information about new drugs. Their study indicates that drugs new to the market – those available for a year or less without a generic alternative – were less affected by the law of the sun than older ones. If the primary value of sales calls was informational, lower meals and payments would likely have a greater effect on new drugs, since physicians would be less familiar with their benefits and special features.

So, are solar laws on payment of doctors effective? Chao and Larkin conclude that a national policy, like that of the ACA, can help reduce potential conflicts of interest, but the benefits may be limited. Like Massachusetts law, a nationwide disclosure requirement may not be enough to deter some doctors from accepting payments or change their prescribing behavior.

“This [these physicians] were immune from disclosure,” the authors write, “suggests that harsher measures, such as outright bans, may be needed if policymakers aim to eliminate such conflicts of interest altogether.”


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