Industry paid $8.2B to docs, hospitals last year
- Drug and device makers collectively made nearly $8.2 billion in payments to physicians and teaching hospitals in the U.S. last year, according to data made public by the Centers for Medicare and Medicaid Services last week.
- Payments for research made up more than half of the total, which also includes money given to doctors and hospitals for expenses like travel, gifts, speaking fees and meals. The $8.2 billion recorded last year was a notch higher than 2015's total and $320 million more than 2014's figure.
- Among the ranks of big pharma, Swiss giant Roche spent the most — a princely $586 million in payments. Novartis and Pfizer were close behind with more than $475 million each, although both made more research-related payments than Roche did.
CMS began tracking payments in 2013 as part of changes to federal law through the Affordable Care Act, with 2016 marking the third full year of the program.
The data gives a snapshot of the enormous sums of money paid by the drug and device industries to doctors and hospitals. Most of the money goes towards research, payments for things like enrolling patients into new clinical studies or study implementation. Research payments can also include direct compensation to doctors.
Last year, research payments totaled $4.36 billion, with another $2.8 billion spent on what CMS terms "general payments." Such broadly defined payments encompass a wide range of expenses such as consulting fees, honoraria, entertainment or travel reimbursements.
Another roughly $1 billion in payments were made related to ownership interests that doctors and their immediate family members have in industry companies.
Novartis and Pfizer spent the most on research among big pharma, recording roughly $450 million and $430 million in payments, respectively. AstraZeneca followed close behind, with $367 million in research payments, and U.S.-based Merck and Roche rounded out the top five.
Bribery scandals and regulatory action in past years has spurred pharma to take more caution in how it pays doctors and physicians, slowly changing a once-spendthrift culture. GlaxoSmithKline, for example, recently became the first big pharma to stop paying doctors speaking fees to promote its drugs. The change in practice, first announced in 2013, came in the wake of a $3 billion fine levied by the U.S. Department of Justice and a bribery scandal in China.
CMS' Open Payments program helps up the transparency around companies' financial ties to doctors and hospitals, shedding light on the still eye-watering sums of money passing between industry and healthcare practitioners.
The detailed data also highlights the complexity of multinational drug companies' corporate structures. Pfizer, for instance, reported payments made through 14 different corporate entities. J&J and Roche each had more than ten reporting bodies, if the wholly owned subsidiaries of Janssen and Genentech, respectively, are included.
Follow Ned Pagliarulo on Twitter