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Senior Citizen Politics
Senators Kohl, Grassley Demand Drug Companies Reveal
Gifts to Doctors
McCaskill, Schumer, Klobuchar and Kennedy
co-sponsor new bill
 Sept. 10, 2007 - U.S. Senators Herb Kohl (D-WI),
chairman of the Senate’s committee on aging, and Chuck Grassley (R-IA)
are introducing legislation to require manufacturers of
pharmaceutical drugs, devices and biologics to disclose the amount of
money they give to doctors through payments, gifts, honoraria, travel
and other means.
“Right now the public has no way to know whether a
doctor’s been given money that might affect prescribing habits,”
Grassley said.
“This bill is about letting the sun shine in so
that the public can know. Whether it’s dinner at a restaurant or tens
of thousands of dollars or more in fees and travel, patients shouldn’t
be in the dark about whether their doctors are getting money from drug
and device makers.”
“At our June hearing, the pharmaceutical industry
told the Aging Committee that they believe their practices are
above-board. If that is the case, full disclosure will only serve to
prove them right. If that is not the case, full disclosure will bring
their influence-peddling out from the shadows. Either way, patients
win,” Kohl said.
Sens. Claire McCaskill (D-MO), Chuck Schumer
(D-NY), Amy Klobuchar (D-MN) and Ted Kennedy (D-MA) are original
co-sponsors of the Grassley-Kohl bill introduced today.
“By requiring drug companies and medical device
manufacturers to report on their gifts to doctors we are empowering
patients to talk with their doctors about the drugs they are prescribed
and to learn more about the influence of the pharmaceutical industry on
the practice of medicine. I believe that by bringing light to these
relationships this legislation will go far in reducing big drug
companies influence on the business of medicine,” McCaskill said.
“This bill will shine a much needed ray of sunlight
on a situation that contributes to the exorbitant cost of health care.
Patients have the right to know if drug and device makers are attempting
to influence physician prescribing decisions with gifts, consultations
and travel,” Schumer said.
“This is common sense legislation that helps ensure
the integrity of our health care system,” said Klobuchar. “It’s
important to shed light on the millions of dollars these companies spend
on marketing – money that could be put into research or lowering the
cost of prescriptions.”
The newly proposed federal legislation builds on
similar initiatives in Minnesota, Vermont, Maine and West Virginia. The
Physician Payments Sunshine Act would apply to manufacturers with $100
million or more in annual gross revenues. Penalties for not reporting
payments would range from $10,000 to $100,000 per violation. The
legislation requires the Secretary of Health and Human Services to
create a website and post payment information in a clear and
understandable manner.
Grassley is Ranking Member of the Committee on
Finance, where he has conducted oversight of educational grants awarded
to doctors by drug companies. Kohl is Chairman of the Special Committee
on Aging. He held a hearing in June to examine the financial
relationship between physicians and the pharmaceutical industry.
Grassley’s floor statement about today’s
legislation is below, along with a copy of Kohl’s statement from his
Aging Committee hearing.
A separate Grassley floor statement on this
subject, delivered in August, is posted along with this news release at
http://finance.senate.gov in the Grassley press releases and at
http://grassley.senate.gov. Information on the Aging Committee
hearing can be found at
http://aging.senate.gov/hearing_detail.cfm?id=277848&.
Floor Statement of U.S. Senator Chuck Grassley
of Iowa
Ranking Member of the Committee on Finance
Introduction of the Physician Payments Sunshine Act
Thursday, September 6, 2007
Mr. Grassley. Mr. President, a month ago I
outlined an important issue affecting all Americans who take
prescription drugs or use medical devices – the need for greater
transparency in the money that drug and device companies hand out to
doctors. Today, I am pleased to introduce the Physician Payments
Sunshine Act, along with Senator Kohl, chairman of the Special Committee
on Aging. This legislation will bring much needed transparency to the
financial relationships that exist between the drug and device
industries and doctors.
There is no question that the drug and device
industries have an intricate network of financial ties with practicing
physicians. These financial relationships can take many forms. They
can include speaking honoraria, consulting fees, free travel to exotic
locations for conferences, or funding for research. Drug and device
companies spend billions and billions of dollars every year marketing
their products. A good amount of this money goes directly to doctors in
the form of these payments.
This practice, and the lack of transparency around
it, can obscure the most important question that exists between doctor
and patient: what is best for the patient?
As the editorial board of the Des Moines Register
wrote recently, “Your doctor’s hands may be in the till of a drug
company. So how can you know whether the prescription he or she writes
is in your best interest, or the best interest of a drug company?”
That’s an excellent question. Currently, the public has no way of
knowing whether their doctor has taken payments from the drug and device
industries, and I intend to change that — not just for Iowans but for
all Americans.
Payments to a doctor can be big or small. They can
be a simple dinner after work or they can add up to tens of thousands
and even hundreds of thousands of dollars each year. That’s right –
hundreds of thousands of dollars for one doctor. It’s really pretty
shocking.
Companies wouldn’t be paying this money unless it
had a direct effect on the prescriptions doctors write, and the medical
devices they use. Patients, of course, are in the dark about whether
their doctor is receiving this money.
The Physician Payments Sunshine Act sheds light on
these hidden payments and obscured interests through the best
disinfectant of all: sunshine. This is a short bill, and a simple one.
This bill requires drug and device manufacturers to disclose to the
Secretary of Health and Human Services, on a quarterly basis, anything
of value given to doctors, such as payments, gifts, honoraria, or
travel. Along with the money, these companies will have to report the
name of the physician, the value and the date of the payment or gift,
its purpose, and what, if anything, was received in exchange. This bill
then requires the Department of Health and Human Services to make the
information available to the public through a searchable website.
And this bill has some teeth, too. If a company
fails to report, the Physician Payments Sunshine Act imposes a penalty
ranging from $10,000 to $100,000 for each violation.
Many states are ahead of the curve on this and have
passed, or are currently considering, similar measures. In 1993,
Minnesota required the nation’s first public disclosure of gifts and
payments from wholesale drug distributors. Vermont passed a similar law
in 2003, although much of the information is not publicly available.
More recently, the District of Columbia, Maine, and West Virginia have
followed suit in requiring disclosure, though not all make the
information available to the public through a website. The General
Assembly in my home state of Iowa may soon be requiring disclosure as
well.
But this kind of information shouldn’t be available
only to Americans who happen to be lucky enough to live in a state
already addressing this problem. On the contrary, this information
should be accessible to all Americans across the country and it should
be updated in a timely manner. I propose to my colleagues that now is
the time to act.
I realize that some critics, including many of the
drug and device companies, are going to say that creating this sort of
national database is too time consuming and too expensive. I can hear
the complaints already. But let me remind you again – the drug
companies are already reporting their payments to doctors in Minnesota
and other states. Companies already have this information available.
We aren’t requiring them to go out and obtain it – we’re just asking
them to share it with the American people.
Perhaps even more telling is that at least one
industry leader has taken the goal of increased transparency into its
own hands. Although it is not making its payments to doctors publicly
available, Eli Lilly has taken important steps to meet the public’s
demand for increased sunshine. In response to my investigation of drug
company payments for continuing medical education, Eli Lilly voluntarily
created a website that details payments they make to organizations like
patient groups and hospitals. I commend Eli Lilly for taking the lead
on that issue, and I look forward to working with them on my latest
effort.
This bill is careful not to burden small businesses
– it applies only to companies with annual revenues over one hundred
million dollars. It is the largest companies who are driving this
practice, and for whom disclosure would be least burdensome.
Further, during a meeting on a separate matter with
officials from Glaxo Smith Kline in early August, my staff brought up
the idea of drug companies reporting payments to physicians. I am happy
to say that Dr. Moncef Slaoui, the Chairman of Research and Development
for GlaxoSmithKline, said that he was also interested in a little
sunshine. In fact, here are his exact words: “We’re happy for
transparency.” I would like to commend Dr. Slaoui for his comments and
I look forward to working with him and leaders at other companies on
this bill.
It’s not only industry leaders that are leading the
way on the issue of increased transparency – some of America’s best
medical schools are taking steps to prevent conflicts of interest among
their physicians. In fact, the Yale University School of Medicine, the
University of Pennsylvania, and the Stanford University Medical School
have gone so far as to prohibit certain gifts and payments altogether.
So let me be clear. This bill does not regulate
the business of the drug and device industries. I say, let the people
in the industry do their business. After all, they have the training
and the skill to get that job done. Just keep the American people
apprised of the business you are doing and how you are doing it. Let a
little bit of sunshine in to this world of financial relationships – it
is, after all, the best disinfectant.
Opening Statement of Senator Herb Kohl
Special Committee on Aging Hearing
Paid to Prescribe: Exploring the Relationship Between Drug Companies
and Doctors
Wednesday, June 27, 2007
I call this hearing to order and welcome all of our
witnesses.
Today, we will examine the financial relationship
between the pharmaceutical industry and physicians. Interactions
between the doctors and drug manufacturer representatives often involve
payments that can actually take the form of cash and gifts such as
meals, travel to conferences, or textbooks. Unlike other professions,
physicians are allowed to take payments from companies whose products
they may choose to prescribe to their patients.
Recent studies show that the more doctors interact
with drug marketers, even through receiving small gifts and modest
meals, the more likely doctors are to prescribe the expensive new drug
that are being marketed to them when a more affordable generic would
do. Seniors lose out with unnecessarily high drug costs while doctors
and drug manufacturers benefit financially.
But rising drug prices don’t only harm the elderly
– they hurt us all as they undermine our private and public health
systems. Health insurance premiums continue to skyrocket, and
escalating drug costs have played a large role. And the federal
government, now the largest payer of prescription drugs with the new
Medicare drug benefit, feels the squeeze as well. Even more alarming,
these gifts and payments can compromise physicians’ medical judgment by
putting their financial interest ahead of the welfare of their patients.
Over the last several years there have been
attempts by the federal government, medical organizations, and drug
companies to curb the excessive gifts and payments to physicians.
Unfortunately, as we’ll hear from some of our witnesses today, financial
ties between doctors and drug companies are only deepening.
In fact, a study published in the New England
Journal of Medicine early this year reported that 94 percent of
physicians have received food and beverages, medication samples, and
other gifts and payments from drug companies.
The pharmaceutical industry remains one of the most
profitable industries in the world, returning more than 15 percent on
investments. As a businessman myself, I respect an industry’s right to
maximize profits. Nevertheless, they are charging Americans the highest
drug prices in the world, forcing some employers to drop health coverage
for employees, squeezing the budgets of state and federal government,
and ultimately harming our seniors by putting drug costs out of their
reach.
It has been estimated that the drug industry spends
$19 billion annually on marketing to physicians in the form of gifts,
lunches, drug samples and sponsorship of education programs. Companies
certainly have the right to spend as much as they choose to promote
their products. But as the largest payer of prescription drug costs,
the federal government has an obligation to examine and take action when
companies unfairly or illegally attempt to manipulate the market.
Today’s witnesses will discuss the current state of
the physician/drug industry relationship, recent attempts at the state
level to increase disclosure of payments, and attempts to reduce the
influence of the drug industry on physician prescribing behaviors. We’ll
also hear testimony from one doctor who feels these potential conflicts
of interest have reached a disturbing level in his profession and is
adversely affecting medical research. Our final panel will include
representatives of the pharmaceutical industry and the medical
profession. They will provide us insight into their voluntary
guidelines addressing physician gifts and payment.
We look forward to hearing each of our witness’s
perspectives on this issue and their recommendations. I take this issue
very seriously and will continue oversight of the relationship between
doctors and the drug industry. While there are voluntary guidelines
already in place, it is clear they are not being followed. I intend to
vigorously pursue stronger adherence to these guidelines, as well as
propose a national registry to require disclosure of payments and
gifts. We need transparency, at the minimum and at the outset. Many of
these gifts are not illegal, but we need them disclosed. These
interactions involving things of value between the pharmaceutical
industry and doctors must be made public.
I thank everyone for their participation today.
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