Last month, W. Carl Reichel was acquitted of charges that he oversaw a kickback scheme designed to induce physicians to prescribe certain drugs manufactured by Warner Chilcott LLC.
The president and CEO of the pharmaceutical company was acquitted of those charges despite the fact that the company itself pleaded guilty to “knowingly and willfully” paying off physicians in the form of sham speaking fees and meals at high-end restaurants, and agreed to pay the government $125 million in civil and criminal fines.
He was acquitted even though prosecutors trotted out nearly a dozen witnesses who worked under Reichel to testify against him, some of whom admitted to participating in the scheme that used “medical education” events--including barbecues, picnics, parties and trips to a casino--to improve physician prescribing rates. The government also alleged that Reichel oversaw the whole thing by demanding sales reps engage in “business conversations” about “clinical experience," which was code for a physician's prescribing rate.
But most importantly, he was acquitted because his attorneys never denied that he oversaw any of these payments, or that he instructed sales staff to take physicians out “at least twice a week.” They merely argued that “relationship building” is “widely accepted conduct” in the medical community.
They aren't lying--allowing pharmaceutical companies to pay physicians large sums of money is a widely accepted practice. The question we should be asking ourselves is, why?
According to the latest data from the Centers for Medicare & Medicaid Services, drug and device manufacturers paid physicians and hospitals $6.49 billion in speaking fees, research payments and meals last year. An analysis of payment data by ProPublica shows that in some states like New Jersey, as many as eight in 10 doctors accept payments from drug companies. In investor-owned, for-profit hospitals, nearly 75 percent of physicians accepted payments.
In short, bonus checks and meals from pharmaceutical companies are considered a perk of the job.
The argument in favor of allowing pharmaceutical companies to pay physicians is as simple as it is absurd: Drug companies need to educate physicians about certain medications. And doctors who use certain drugs more often are considered experts, and should be used--and compensated--when they educate other physicians.
Essentially, we're placing an inordinate amount of faith in an industry that hasn't exactly proven itself, sort of like giving a convicted felon your bank routing number. And yet, time and again, drug companies use this platform--so-called “business relationships”--as a cover for their real, hardly transparent purpose: Persuading physicians to prescribe more of their drugs.
Physicians insist that accepting speaking fees and fancy dinners in no way clouds their judgement. I believe them when they say that. I don’t think the vast majority of physicians walk into these speaking engagements or lunches with a slack-jawed willingness to be manipulated by the Pfizers and AstraZenecas of the world.
The problem is they’re wrong. Studies show that they are persuaded, and often times it takes little more than a tuna sandwich. In an analysis published in May, ProPublica found that doctors who take payments from pharmaceutical companies alter their prescribing habits: The more money they receive, the higher percentage of brand name drugs they prescribe.
Last month, a study published in the Journal of the American Medical Association found that even a single meal averaging less than $20 correlated to a higher prescribing rate of brand-name medications. More meals--and more expensive meals--were linked to even higher rates.
So here's a novel idea: Let’s cut off these types of payments entirely. Stop allowing pharmaceutical companies and device manufacturers to hide behind the guise of education and relationship building and innocent discussions over cobb salad, and start calling these payments what they really are: Bribes.
I’m not saying do away with drug education. But why can’t that funnel through an objective third-party like the Food and Drug Administration, using a regulated method for compensation? Why must it be done over a $150 dry-aged ribeye and a PowerPoint slide cycling noiselessly in the background? Why are some physicians collecting twice as much from drug companies as they are from Medicare, while taking in as many as two payments a day on average (including weekends)?
Until the healthcare industry comes up with some satisfactory answers to those simple questions, the pharmaceutical industry will continue sinking billings into the provider community, while playing the game on its own terms. In the meantime, we'll be forced to collectively grit our teeth every time we hear the phrase “relationship building.”