Drug Company Payments to Physicians

Large drug companies aren’t so innovative anymore, but they are good at marketing and selling their products, even to people who don’t need them.  One way they do that is by “detailing” physicians and occasionally providing them with goodies.  A study at the National Bureau of Economic Research attempts to assess whether these payments to physicians actually change prescribing behavior.   (NBER Study)    A federal law requires manufacturers to report cash and in-kind payments of any type to physicians.  These payments are often meals, speaking fees, etc.  Most payments have a relatively small value, with the average being about $20.  The researchers used data from these reports for 2013 to 2015 to see if they appeared to be linked to more or less prescribing of drugs from the manufacturer in regard to patients covered by Medicare’s Part D program.  They looked at each physician and each drug whose manufacturer made a payment to the physician.  They also looked at whether lower quality drugs appeared to be prescribed when there was a choice and at how quickly the doctor shifted to generics when the drug went off patent.  The analysis included a comparison of trends between doctors who did and didn’t get a payment from the manufacturer.

29% of all Part D prescribers received a payment from a manufacturer for at least one brand drug during the study period and a fifth of all Part D spending was tied to prescriptions written by these doctors.  Before a payment related to a specific medication, prescribing behavior between physicians who did and did not get payments was similar.  After receipt of a payment, the doctors getting them began to prescribe more of the drug.  Now this could be due to a better understanding of the benefits of the drug for patients, right?  After a single payment, prescribing expenses for the drug rise about 4%, or $121 per year, on average, with the effects peaking about 6 months after the payment and then declining.  For the manufacturer, this is a pretty modest return of about $2.64 for every dollar they spent on the payments.  Using a measure of drug quality related to supposed relative efficacy, prescribing trends in regard to quality were also similar across physicians receiving and not receiving payments prior to the payment, but doctors who got a payment were slightly more likely to prescribe a less-efficacious drug after receiving a payment from the maker of that medication.  In regard to speed of switching from a brand drug for which a payment had been received to a generic version, the researchers found no difference in overall switching, but that doctors who got a payment were more likely to prescribe an extended release formulation of the original medication, which typically costs more.  While the impact of giving financial benefits to doctors isn’t huge, it still should be banned because it isn’t clear that there is any benefit derived from the practice.