Doctors have always denied that the money they receive from pharma companies has any effect on their prescribing habits.

However, an analysis by ProPublica proved otherwise. The evidence compiled has found that doctors who receive payments from drug and device companies indeed tend to have different prescribing habits as compared to their colleagues who do not. And the more cash they receive, the more brand-name drugs they prescribe. 

What the Records Show

White tablets inside medicine bottle

The analysis matched records on payments from drug and medical device makers with the data on doctors’ medication choices in Medicare’s prescription drug program.

Doctors who received money from drug and device makers, sometimes even just a meal, overall prescribed a higher percentage of brand-name drugs compared to other doctors who did not receive any cash from the industry. Medical professionals who received industry payments were two to three times more likely to prescribe brand-name drugs at higher rates.

Pharmaceutical companies who pay for the marketing of their products sometimes end up being caught in the waterloo they set for themselves, just like what happened with Johnson & Johnson when the company was accused of illegally marketing Risperdal, an antipsychotic drug prescribed to treat schizophrenia, to patients with dementia and children with behavioral disabilities even though the drug has serious side effects to people with those conditions. 

As a result, the pharma giant was accused by federal authorities of aggressive and illegal marketing of the drug, as it was allegedly marketed to doctors even before it got an approval from the US Food and Drug Administration. These allegations gave rise to the Risperdal lawsuit. In the ongoing legal proceedings, Johnson and Johnson was also accused of exaggerating the efficacy of the drug.

Doctor wearing a coat while holding syringe and dollar bills

Doctors who were able to receive more than $5,000 from companies usually had the highest percentage of brand-name prescriptions. For internists who received zero cash, the average brand-name prescription percentage was only 20 percent, compared to around 30 percent of those who got more than $5,000 of industry payments.

According to ProPublica, their analysis does not prove that payments made by the industry convince doctors to prescribe particular drugs. Rather, it “shows that payments are associated with an approach to prescribing that, writ large, benefits drug companies’ bottom line.”

This controversy adds to the long list of issues that drugs and device makers have been in over the years. In the last quarter of 2020, Teva Pharmaceuticals, an Israeli drugmaker, was sued twice by the US Department of Justice over allegations of kickback-scheme and conspiring with other pharma companies. The same company has been in constant scrutiny because of claims made against it in the Paragard lawsuits, where attorneys claim that the company has not provided enough warning to the public on the potential dangers of the Paragard IUD, a birth control device the company has manufactured. 

Plaintiffs claim that the device is prone to breaking as many of them said that the device broke inside of them when they attempted to have it removed by a doctor or a healthcare provider. This later on caused the device to be embedded in their uterus, which called for several surgeries to be removed and sometimes in worse cases, removing the pieces of the IUD required a hysterectomy.  

Proportion of Prescribers

Bottles of medicine lined up with pills inside

Lots of studies show that generic drugs, which must meet the strict standards of the US Food and Drug Administration, work equally well as brand-name drugs in the majority of patients. Brand-name drugs, however, usually cost a lot more than generics and are more often advertised. Moreover, the two are also equivalent when it comes to patient satisfaction, according to a recent report.

There’s a wide variation in different states when it comes to the percentage of prescribers who receive industry payments, according to the analysis. The rate in states like Alabama, Kentucky, Nevada, and South Carolina was twice as high compared to that of Maine, Vermont, Minnesota, and Wisconsin. 

Overall, however, payments are widespread. Nationwide, around nine out of ten cardiologists who wrote about 1,000 prescriptions for Medicare beneficiaries received payments from a drug or device company, while seven in ten family practitioners and internists did.

According to Dr. Richard Baron, president and chief executive of the American Board of Internal Medicine, the results make sense, as doctors today almost have to go out of their way just to avoid receiving payments from the industry. And those who take payments are most likely skeptic of the value of some brand-name medications. 

“You have the people who are going out of their way to avoid this and you’ve got people who are, I’ll say, pretty committed and engaged to creating relationships with pharma,” Baron said.

“If you are out there advocating for something, you are more likely to believe in it yourself and not to disbelieve it.”

Factors Affecting Doctors’ Prescribing Decisions

Physicians take lots of factors into consideration in choosing which medications to prescribe. Some doctors may help patients for whom only few generics are available, like those who care for HIV/AIDS patients, and there are those who specifically look after patients with complicated conditions in which generic drugs do not really work for them.

In a statement, Pharmaceutical Research and Manufacturers of America spokeswoman Holly Campbell said that many factors affect doctors’ decisions on prescribing. A survey conducted by the group found that more than nine in 10 physicians felt that their prescribing decisions were mainly influenced by their “clinical knowledge and experience,” said Campbell in a written statement. 

Doctor taking notes while talking to patient

Indeed, several doctors who were found to have received large amounts of industry payments and higher prescribing rates of brand-name drugs said they are doing it for the sake of the patient.

A physician from New Jersey actually said, “I do prefer certain drugs over the others based on the quality of the medication and also the benefits that the patients are going to get.” The doctor received more than $66,800 from companies, as evident from his rate of prescribing brand-name medicines that is more than twice the mean of his peers in the same specialization. 

A doctor in his 70s was also found to have prescribed brand-name drugs more than twice the rate as compared to other internal medicine doctors nationally. The doctor said that he is nearly retiring, and as he does not make that much money from his medical practice, the reason why he receives money from drug companies. He added that unlike many other doctors, he does not own any laboratories or pharmacies, which is how they increase their incomes. 

The payments referred to in the analysis include consulting, promotional speaking, meals, business travel, gifts, and royalties, among others. 

The analysis also looked at patterns in Medicare’s drug prescription program called Part D, which covers around 39 million people.

It matched the two datasets while observing doctors in five large medical specialties like cardiology, internal medicine, psychiatry, family medicine, and ophthalmology. The analysis particularly looked at doctors who wrote around 1,000 prescriptions in Medicare’s program.  



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