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Drug Money
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Doctor, How Much Does Transparency Cost?

Doctors are divided about how much to reveal about the gifts they get from Big Pharma. Why report the big consultancies but not the croissants?


Doctors and other health professionals who accept lucrative consultancy fees, speaking fees, travel, accommodation and meals, royalties, shares and other major benefits from drug companies are to be publicly named.

But the recommendations of the Transparency Working Group (TWG) reluctantly set up by Australia’s peak pharmaceutical industry body, Medicines Australia, have left open the prospect of drug companies continuing to exert influence on health professionals in other ways.

The draft for a new code of conduct for Australia’s major drug companies (which was to have been released June 13, but now seems likely to be delayed, for reasons which will soon be apparent) frankly acknowledges the TWG is deeply divided about the levels of drug company largesse that should be reported.

Thus the transparency model which has emerged from the long consultation process is actually two models: one supported by some doctors and consumer health groups, and one supported by other doctors and the pharmacy industry.

The former, more stringent model would set a $10 threshold for the recording of individual payments or “transfers of value” (ie non-cash inducements) to healthcare professionals. Furthermore, annual cumulative payments or transfers of $100 or more to an individual healthcare professional would have to be reported.

This model closely reflects the provisions of the United States Physician Payments Sunshine Act, introduced in an effort to limit the corrupting influence of big pharma payments on prescribing patterns there. The Sunshine Act was signed into law there in March 2010, the data has been collected by the companies, and the first reports are due for publication on September 30 this year.

The latter model proposed by the other faction of the Medicines Australia transparency working group, would set a lower limit of $25 for the reporting of individual payments or transfers of value, and there would be no cumulative cap.

Thus a drug-company representative could theoretically buy a modest lunch for a doctor every day, without that benefit having to be reported.

Sources say there was considerable debate within the TWG on the issue, and a draft “explanatory document” reinforces the point.

It names five members of the working group – representatives consumer health groups or medical organisations, who wanted the lower cap.

They argued, the memo says: “The lower threshold of $10 would capture lunches provided in a medical practice, for example, where several healthcare professionals receive the hospitality in association with a sales representative’s call. These members were concerned about the provision of hospitality which, although of a relatively low monetary value, has the potential to influence healthcare professionals and create a sense of reciprocity or obligation.”

There is good reason for their view. As noted in this article on drug company disclosure:

“While lavish gifts and generous travel support have been a focus of attention in the past, these have been progressively discouraged by industry and professional guidelines. It is likely that the frequent, more modest, sponsored educational events will become increasingly important and influential, and the principal form of contact between industry and health professionals.”

The Medicines Australia transparency group memo names five other working group members – representatives of drug companies, medical technology companies and other doctors’ organisations (including the largest, the Australian Medical Association) – who argued for the higher threshold.

“These members were concerned at the complexity of capturing low level hospitality provided by sales representatives at the individual healthcare professional level,” the memo says.

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It refers to a number of drug company chief financial officers who lobbied for the higher threshold on the basis that if a $10 limit were established “most companies would have to build new systems to capture these data, whereas their current systems could capture and report payments or transfers of value above $25.”

They maintained this line despite the fact that the same multinational companies were establishing systems to comply with identical requirements in the United States.

In the end, the group was unable to agree and both options were included in the draft model.

The deadlock over reporting thresholds was only one major sticking point. Another was the way in which the costs of so-called “educational events” – drug companies stage more than 150,000 of these each year in Australia – should be accounted for.

Several members of the transparency group wanted not only the travel and hospitality costs of such events to be reportable, but also the costs of hiring a venue, audio-visual equipment and other logistical costs to be reportable.

The memo suggested, rather mildly considering the depth of the divisions in the transparency group membership, that these issues would be “important … for discussion and debate during the consultation period on the proposed model”.

In fact, the explanatory memorandum itself is now a matter of disagreement. On June 12, the chair of the working group, Dr Dominic Barnes, emailed all members saying he had received complaints that the memo recorded only some of the areas of disagreement.

“Some members have expressed the view that there are several other issues on which there wasn’t full agreement, in addition to the threshold level and the allocation of function costs,” he wrote.

“By identifying only some issues of difference there is an implication that other issues were generally agreed, which is not the case. It therefore might not be helpful to identify any points of difference in a document such as the Explanatory document.”

He proposed a teleconference of members to work out whether they should itemise all the points of dispute, or none of them. And if it was decided they should be transparent about their differences (it is, after all called a “transparency group”), Barnes asked, were committee members happy “to have their different views about these issues attributed to them by name?”

This model closely reflects the provisions of the United States Physician Payments Sunshine Act, introduced in an effort to limit the corrupting influence of big pharma payments on prescribing patterns there.

Barnes stressed in his email, presumably for the benefit of unhappy committee members, that the impending release of the transparency model “is just the start of the process of consultation.

“Once it is released, each stakeholder representative should take the model to their respective Boards, Committees, and/or membership and seek their feedback and comment.”

The comments would then be considered before any greater degree of transparency was included in the Medicines Australia Code. The review process would run until June 2014, at which point the drug companies comprising MA would vote on whether to accept it.

Then it will go to the Australian Competition and Consumer Commission (whose dissatisfaction with the weakness of the existing code forced the review in the first place), for further “consultation with stakeholders prior to authorisation and implementation”.

In other words, the fight has a long way to go yet.

That aside, though, there is much in the draft that is good, and which appears to have been broadly accepted.

It looks hopeful that from 2016, Australians will be able to see if their doctors are on the take from big pharma in a big way. As we said at the top of the story, if the recommendations are accepted, big benefits to health professionals such as consultancy fees, speaking fees, travel, accommodation and meals, royalties, shares, et cetera, would be reported

And the recipients of this largesse would be identified by name (first, last and middle initial), and by the locale where they do business.

Payments to third parties, such as registered charities, also would be reported, which would be a good thing, for drug companies often seek to capture such organisations by funding them in return for their advocacy.

Furthermore, the committee has come up with a laudable statement of general principles.

But there is no denying the shortcomings of the whole process, by which we don’t mean just the internal conflict of the Medicines Australia working group.

For one, there is the fact that it is a voluntary, self-regulatory code. The US Sunshine Act, in contrast, is law.

For another, Medicines Australia is only one of nine bodies, all with differing codes, which purport to speak for companies working in the broader medical/therapeutic area.

For a third, not all the drug companies belong, and if they decide they don’t like the code, they can always drop out.

Wouldn’t it be desirable if there were a common code for all, and one which was either legislated, or underpinned by legislation – for example a requirement that companies must abide by the terms of the relevant code of conduct in order to do business?

Increasingly that is the model being adopted not only in America, but in Europe. In Australia, the Greens’ health spokesman, Dr Richard Di Natale, has produced draft legislation which would give legal underpinning to a disclosure regime.

His bill has been subject to a senate inquiry, which is soon to report.

We’ll see what happens, but the prospects don’t look good.

Both of Australia’s major political blocs support remain committed to the voluntary model.

1 comment on this story
by d haikerwal

This is an important issue but why is the focus always doctors. What about the pharmacist? The doctor does prescribe but is highly unlikely to give a patient a drug for blood pressure if they do not need it. However once the patient gets to the pharmacy they end up with numerous brands claiming to be cheaper. Often it is the profit margin that influences the dispensed drug. What about the natural medicine industry with massive profits but little evidence? What about the influence in other industries where this marketing is acceptable but also has an impact on the consumer and government. If we want transparency let us do it across the board.

July 7, 2013 @ 10:19pm
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