Open Payments: Pharma, device companies shelled out $3.5B in 5 months [CHART]
- The push for transparency regarding speaking and consulting fees paid to physicians and teaching hospitals led the federal government to track payments via the Open Payments website. Between August and December 2013, the pharma and medical device industries paid $3.5 billion to healthcare professionals and teaching hospitals via 4.4 million individual payments, including $380 million in speaking and consulting fees to doctors.
- The pharma industry has complained that the data are not necessarily accurate due to technical glitches and reporting inaccuracies, as well as a lack of context regarding the payments.
- These relationships and money transfers are being scrutinized and criticized -- but on the flip side, they often help drive innovation and provide much-needed support for clinical trials and medical insights from the front lines.
For years, there has been controversy surrounding the transfer of payments from pharma and the medical device industry to healthcare professionals and teaching hospitals. The Physician Payment Sunshine Act, a part of the Affordable Care Act, formalized a system for tracking those payments and creating transparency in the industry.
The first data was put into the Open Payments database on August 1, 2013, and the first large-scale data analysis for the first five months of reporting (August 1-December 31, 2013) shed light on how much money is regularly paid out. ProPublica's Charles Ornstein has this helpful chart on where the money went:
Skeptics like the Public Citizen’s Health Research Group contend that this type of payment structure is not in the best interest of patients. However, advocates cite innovation and the need for expert input as a strong reason for continuing to forge ties between pharma and healthcare professionals. All told, research accounted for $1.5 billion of payments during the five-month period in question. In addition, $302 million was spent on royalties and licenses.
All payments, ranging from paid lunches to large consulting or royalty fees, must be reported. On the high end of the spectrum, one Texas-based orthopedic surgeon received more than $7 million for royalty fees, travel expenses, and speaking engagements; on the other end, an Ohio-based physician was surprised to see a $50 lunch documented. Transparency, according to the Sunshine Act, should be all-inclusive. This is a positive step and is even supported (in theory) by big pharma companies -- but the glitches most definitely need to be addressed.