updated 8/21/2007 4:54:25 PM ET 2007-08-21T20:54:25

A groundbreaking Minnesota law is shining a rare light into the big money that drug companies spend on members of state advisory panels who help select which drugs are used in Medicaid programs for the poor and disabled.

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Those panels, most comprised of physicians, hold great sway over the $28 billion spent on drugs each year for Medicaid patients nationwide. But aside from Minnesota, only Vermont and Maine require drug companies to report payments to doctors for lectures, consulting, research and other services.

An Associated Press review of records in Minnesota found that a doctor and a pharmacist on the eight-member state panel simultaneously got big checks — more than $350,000 to one — from pharmaceutical companies for speaking about their products.

The two members said the money did not influence their work on the panel, and the lack of recorded votes in meeting minutes makes it difficult to track any link between the payments and policy.

But ethical experts said the Minnesota data raise questions about the possibility of similar financial ties between the pharmaceutical industry and advisers in other states.

'No way to know'
“In the absence of disclosure laws, there’s certainly no way to know,” said Jack Hoadley, a research professor specializing in Medicaid at Georgetown University in Washington. “There are a lot of physicians in general who have at least some contract or grant funding out of pharmaceutical companies, and additional (who) do speaking engagements.”

The AP began looking at the records in mid-June. Soon after, the Minnesota Medicaid Drug Formulary Committee began considering a conflict-of-interest policy that would require members to disclose such financial relationships and recuse themselves from voting in some cases. The committee is expected to act on the policy next month.

John E. Simon, a psychiatrist appointed to the panel in 2004, earned more than $350,000 from drug companies between 2004 and 2006. Pharmacist Robert Straka served from 2000 to 2006 and collected $78,000 from various drug makers during that time.

Both men, and the committee chairman, said the payments did not influence their work with the committee.

But state officials said they would examine the panel’s past actions for any bias tied to the payments, and they will start screening appointees to more than two dozen advisory councils for similar links to the drug industry.

They will also require the Drug Formulary Committee to begin recording how each member votes at its meetings.

The Minnesota advisory panel’s recommendations to the state Human Services Department are almost always followed. The committee guided $240 million in spending on drugs for 202,000 patients last year. That’s slightly less than a third of all the state’s Medicaid patients — mostly disabled and mentally ill people whose medical bills are paid directly by the state.

The top drugs for Minnesota Medicaid patients covered by the panel’s advice in recent years have been schizophrenia treatments from Eli Lilly & Co. and AstraZeneca PLC — Lilly’s Zyprexa from 2000 to 2004, followed by AstraZeneca’s Seroquel in 2005 and 2006. About a third of the drugs on the state’s preferred drug list are made by companies that paid Simon, Straka or both.

A medical ethicist said state drug advisers should not take pharmaceutical companies’ money because of the power the panel exercises over the poorest, most vulnerable patients.

“This is a high-stakes committee,” said Dr. Arthur Caplan, chairman of medical ethics at the University of Pennsylvania School of Medicine and a MSNBC.com contributor. “If you’re going to have your hand on that tiller, you don’t want to think that anybody is trying to push it.”

Guarding against conflict of interest
Some other states have taken tough measures to guard against that. Nevada bars anyone from serving on its Pharmacy and Therapeutics Committee who is in any way paid by or affiliated with a corporation that makes prescription drugs.

“It’s as clean as we can get or we can dream up,” said Charles Duarte, the state’s Medicaid administrator.

In Idaho, committee members can be fired on the spot for failing to disclose a conflict of interest.

Chair supports disclosure
Dr. William Korchik, the panel’s chairman, said he supports disclosure of committee members’ relationships with drug companies, “whether it’s stock, research or speaker’s fees.”

Korchik said he didn’t know the extent of the financial relationships until contacted by AP. But Korchik defended the panel’s work, saying the ties did not bias a group that works mainly by consensus.

“This whole thing may be an issue of appearance of conflict, but I really feel comfortable that the committee has not been hoodwinked,” he said.

Al Heaton, a pharmacist who has served on the committee since the early 1990s, is the only panel member mentioned in the last six years of minutes for disclosing a potential conflict of interest and abstaining from a vote — on bone drugs he had gotten funding to research years earlier.

“I think that’s important to know,” said Heaton, the director of pharmacy at Blue Cross and Blue Shield of Minnesota.

“An individual may be perfectly honest and totally objective, but finding it out afterward, then you always wonder were they or were they not?”

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