In an industry first, Eli Lilly and Co. says it will begin disclosing how much money it paid to individual doctors for advice, speeches and other services.
The drug company's move comes as members of Congress push a disclosure bill in an effort to prevent such payments from improperly influencing medical decisions.
Beginning next year, Eli Lilly will disclose payments of more than $500 to doctors for their roles as advisers and for speaking at educational seminars. In later years, the company will expand the types of payments disclosed to include such things as travel, entertainment and gifts.
Some have voiced concerns that doctors are influenced by these payments in their treatment decisions and that this in turn can drive up medical bills. Although most physicians believe that free lunches or trips have no effect on their medical judgment, research has shown that these type of payments can affect how people act.
Attempt to restore trust
"The ethical handwriting is on the wall. Disclosure is coming. States are pushing for it, and once a few states do, it's hard to imagine the federal government won't line up behind," said Dr. Arthur Caplan, director of the Center for Bioethics at the University of Pennsylvania in Philadelphia. "I think that's a good thing because we have a great deal of empirical evidence that gift giving can influence behavior in terms of prescriptions, publishing positive findings but suppressing negative findings, and generating enthusiasm for new drugs."
Eli Lilly was also the first drug company to publicly report its educational grants for medical conferences. Dr. John Lechleiter, president and CEO of the company, said that made good business sense for the drug industry.
"We've learned that letting people see for themselves what we're doing is a good way to restore trust," Lechleiter said.
In the past two years, lawmakers from both chambers of Congress introduced bills that would require drug and medical device manufacturers to disclose any payments to doctors exceeding $25, but the industry chafed at the strict reporting threshold. Eli Lilly had announced earlier that it intended to comply with key aspects of the legislation once some lawmakers agreed to a higher reporting threshold of $500.
Eli Lilly's disclosure of payments to doctors will begin in the second half of 2009, and will cover payments made in the first half of the year. The company doesn't plan to report payments from 2008 or earlier, noting that the legislation before Congress also did not contemplate such a look back. Gradually, the company plans to expand its registry to incorporate all payments that the Physician Payment Sunshine Act would require to be made public.
Lechleiter said that physicians who advise the company or speak at conferences about their experiences in treating patients take time away from their medical practice. That's why they need to be compensated at fair, market rates.
"We're oftentimes taking them away from their practice for a day or more," Lechleiter said. "It's a service that they're providing and they deserve compensation for that."
A handful of states and the District of Columbia already have disclosure laws for payments from drug companies to doctors. Those states are Minnesota, Vermont, West Virginia and Maine. None of those states require disclosure of payments from medical device makers.
Skepticism over transparency
Dr. Peter Lurie, deputy director of the health research group at Public Citizen, said the state laws can let patients know when their doctors have a connection to a drug firm, but the state laws are not working very well. The laws have various exemptions and sometimes don't even disclose the information to the public, he said.
Lurie was skeptical that Eli Lilly's announcement represented a step forward on the issue of more transparency in health care.
"There are dozens of pharmaceutical companies. This is just one of them. Most won't follow this guideline at all, and there will be no enforcement," Lurie said. "This is Ely Lilly's attempt to forestall the federal legislation by saying we're in effect complying anyway."
Public Citizen, a consumer advocacy group, also objects to the $500 threshold for reporting. Lurie said it should be much lower — $25 per gift.
"Most of what will wind up being disclosed is speaker's fees, consulting and research grants," Lurie said. "But most people want to know more than that. They want to know about meals, travel and that sort of thing. A lot of people will be cut out by the $500 annual limit."
Sen. Charles Grassley, R-Iowa, applauded Eli Lilly's announcement, but he said he would continue to push for legislation that requires disclosure of physician payments by drug and medical device manufacturers.
"Consumers and taxpayers deserve a federal requirement that applies to all kinds of payments to physicians in every state in the nation," Grassley said.
Grassley's bill calls for penalties of $1,000 to $5,000 for failure to report a payment, with an annual cap of $250,000 for knowingly failing to report. The legislation would pre-empt state reporting requirements.
Aides to the senator said health groups such as the American Medical Association as well as trade groups such as the Pharmaceutical Research and Manufacturers of America support his legislation. The trade group PHRMA has expressed support for Grassley's bill in the past.
Ken Johnson, senior vice president for the drug makers' trade group, said payments to physicians are an important part of the effort to inform health care providers about such things as new treatment options, appropriate dosing and potential interactions with other drugs.
"We believe that improving transparency in such interactions is a laudable, but complex, goal," Johnson said. "Any steps toward transparency should be structured in a way that would not chill these important exchanges."