Big Pharma's Dirty Secret: How Physician Payoffs Drive Up Drug Prices

Posted on: Sunday, April 7th 2024 at 3:00 am

Written By: 

GreenMedInfo Research Group

What if I told you that the skyrocketing cost of your prescription drugs was directly tied to the billions of dollars drug companies pay your doctor each year? A shocking new analysis reveals how this unethical practice, which is essentially legal bribery, lines the pockets of physicians while bleeding patients and our healthcare system dry.

A new ProPublica analysis found that doctors who received payments from pharmaceutical companies tied to specific brand-name drugs prescribed far more of those drugs compared to doctors who did not receive such payments. This pattern held true for 46 out of the 50 most prescribed brand-name drugs in Medicare. On average, doctors receiving payments prescribed 58% more of the drug than their peers. These industry kickbacks, which are largely legal, drive up drug costs for patients and waste taxpayer dollars.

The Multibillion-Dollar Scam: Industry Payments to Physicians Increase Healthcare Costs for All

If you've ever wondered why prescription drug prices in the United States are the highest in the world, look no further than the cozy financial relationship between your doctor and Big Pharma. A groundbreaking new analysis by ProPublica reveals the insidious way drug companies essentially bribe physicians to prescribe more of their expensive brand-name medications, driving up costs for patients while padding the bottom lines of pharmaceutical giants.1

The investigation examined the 50 most prescribed brand-name drugs in Medicare, focusing on physicians who received money from the drugs' manufacturers in the form of speaking fees, consulting payments, meals, travel and more. In a staggering finding, doctors who took payments related to a specific drug prescribed 58% more of it, on average, than their peers who did not receive money.1 This pay-to-prescribe pattern occurred for 46 out of the 50 drugs analyzed.1

Let's take the popular irritable bowel syndrome medication Linzess as an example. Between 2014-2018, Linzess makers Allergan and Ironwood shelled out nearly $29 million to physicians, mostly for speaking fees and meals.1 Lo and behold, doctors who received Linzess payments in 2016 prescribed 45% more of the drug compared to doctors who didn't get paid.1 That means patients were far more likely to receive this expensive branded drug, which costs around $1,500 per year, instead of a cheaper generic alternative like over-the-counter Miralax (about $200/year).1

This insidious financial relationship was seen across numerous drug types, medical specialties, and payment amounts, from small meal payments to large speaking honoraria.2 For some blockbuster drugs, well over half of prescribing doctors were on the take. Over 50% of physicians prescribing the pricey asthma medication Breo received payments, as did the majority of doctors prescribing the diabetes drugs Invokana and Victoza.1

Perhaps most disturbing, even one in five doctors prescribing the highly addictive opioid OxyContin had a financial relationship with its now-notorious manufacturer Purdue Pharma.1 It's no wonder the U.S. is facing an unprecedented overdose epidemic.

While advocates claim these payments are for educating and informing physicians about drug options, the prescribing data tells another story. Experts say it simply doesn't take this level of pharma spending, to the tune of billions, for doctors to be informed about treatment advances.3 Rather, this is thinly-veiled bribery. As Dr. Aaron Kesselheim of Harvard Medical School explains: "It's a remarkably durable effect. No speciality is immune from this phenomenon."1

So what can be done? Some argue these payments, which meet the textbook definition of an illegal kickback, should be banned altogether.4 But past attempts at prohibition have proven challenging. A more pragmatic approach is to combine mandatory disclosure laws, like the Physician Payments Sunshine Act, with strict caps on payments.4 For example, allowing only minimal payments that don't exceed the fair market value of services rendered.5

Currently, disclosure of pharma payments is entirely voluntary for companies. And while the Sunshine Act's Open Payments database has increased transparency, loopholes remain. A disturbing number of published disclosures are vague, incomplete, or fail to even identify the physicians receiving money.6 Closing these gaps is critical.  

But transparency alone is not enough. Knowing your doctor is being paid off doesn't lower your drug costs. Strict limits or bans on pharma payments are needed.4 Some academic medical centers have led the way, implementing policies that prohibit staff from receiving speaker's fees or gifts, and restrict other financial relationships.7 All healthcare organizations should follow suit to finally put patients before profits.  

Policymakers also have a duty to act. Regulators must enforce the Anti-Kickback Statute as intended to deter these payments. Medicare could impose coverage restrictions on drugs for which payments are made. And FDA could require disclosure in drug advertising.4

The path forward is clear: cut the multi-billion dollar flow of money from Big Pharma to prescribers' pockets. Until then, you can bet the astronomical cost of filling your prescription will continue to rise as this national kickback scheme rolls on. It's long past time we broke up this unholy alliance between the pharmaceutical industry and physicians - your health and your wallet depend on it.

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References

1. Fresques H. Doctors Prescribe More of a Drug If They Receive Money from a Pharma Company Tied to It. ProPublica. December 20, 2019. Accessed May 11, 2023. https://www.propublica.org/article/doctors-prescribe-more-of-a-drug-if-they-receive-money-from-a-pharma-company-tied-to-it

2. Mitchell AP, Trivedi NU, Gennarelli RL, et al. Are Financial Payments From the Pharmaceutical Industry Associated With Physician Prescribing?: A Systematic Review. Ann Intern Med. 2021;174(3):353-361. doi:10.7326/M20-5665

3. Dusetzina SB. ORBITA: Revisiting Impacts of Industry Payments on Physician Prescribing. Ann Intern Med. 2021;174(3):425-426. doi:10.7326/M20-8073

4. Mitchell A, Sarpatwari A, Bach PB. Industry Payments to Physicians Are Kickbacks. How Should Stakeholders Respond?. J Health Polit Policy Law. 2022;47(6):815-833. doi:10.1215/03616878-10041205

5. Chimonas S, DeVito NJ, Rothman DJ. Bringing Transparency to Medicine: Exploring Physicians' Views and Experiences of the Sunshine Act. Am J Bioeth. 2017;17(6):4-18. doi:10.1080/15265161.2017.1313334

6. Mulinari S, Martinon L, Jachiet PA, Ozieranski P. Pharmaceutical industry self-regulation and non-transparency: country and company level analysis of payments to healthcare professionals in seven European countries. Health Policy. 2021;125(7):915-922. doi:10.1016/j.healthpol.2021.04.015

7. Larkin I, Ang D, Steinhart J, et al. Association Between Academic Medical Center Pharmaceutical Detailing Policies and Physician Prescribing. JAMA. 2017;317(17):1785-1795. doi:10.1001/jama.2017.4039