Docs draw big paydays from drug companies

When they aren’t seeing patients, some doctors in Richmond are getting paid big bucks by the nation’s largest drug companies for consulting and speaking gigs.

Investigative journalism organization ProPublica has come out with a report called Dollars for Docs that details payments made by seven of the biggest pharmaceutical companies to physicians across the country. The data cover 2009 and most of 2010 and was compiled from disclosures recently made by the companies primarily as a result of legal settlements. Companies included in the report are AstraZeneca, Cephalon, GlaxoSmithKline, Eli Lilly, Johnson & Johnson, Merck and Pfizer. Together they account for 36 percent of the U.S. market.

In Richmond, 90 doctors received more than $1 million in payments over the past year and a half from those companies, about a fifth of the total amount of payouts statewide. You can view a full list of here.

Nationwide, drug companies pumped out $257.9 million during the reporting period.

Two Richmond area doctors received more than $100,000, according to the report. A total of 384 physicians across the country passed the $100,000 mark.

Jefferson M. Sommers, a psychiatrist with Insight Physicians, was reported to have received $112,193 from two drug companies for leading educational programs for health-care professionals. Most of those payments came from Eli Lilly, with $2,937 being provided by Pfizer. According to the report, the payments covered Sommers’s participation in 51 activities.

Sommers did not respond to requests for comment by press time.

The Richmond doctor receiving the most from drug companies in the reporting period was James Wigand, an endocrinologist with CJW Medical Center. Wigand received $119,554 for his work with Eli Lilly, and he also received a payment of $1,800 from AstraZeneca.

Wigand dismisses the notion that the payments pose any conflict of interest and says that his speaking engagements are not to promote specific drugs but rather to help primary care doctors better recognize and treat Type II diabetes.

“The reason this work is so important is we have an epidemic of Type II diabetes,” Wigand said. “By 2050, one in three Americans are projected to have the disease.”

Wigand said there is an unmet need for education among primary care physicians on treatment of Type II diabetes, given that they treat the majority of patients with the disease.

All the talks are given within FDA guidelines, according to Wigand, and all payments are within the caps set by the government.

“When you have a program, you have to be fair and balanced, not just promoting a certain drug,” Wigand said. “If they decide at the end of the day want to use Eli Lilly insulin, that is their decision. My goal is to provide information to treat patients better.”

Wigand said he gives talks throughout Virginia and in parts of North Carolina. According to the report, Wigand has participated in 65 engagements over the past year and half. Most of the speaking engagements are small sessions inside a doctor’s office or at a restaurant.

Wigand said his opinion is mixed on whether the recent disclosures are a fair process.

“At the end of the day, how much I make is my business and my tax lawyer’s business and no one else’s. No one questions an attorney who makes $500 an hour,” Wigand said.

“Medicine is a good whipping post. Are there abuses in medicine? Absolutely. The good part about it is important to know. [For instance] if some people are speaking for five, six or seven different dug companies. In that case, some people may wonder what’s going on there.”

The cost of prescription drugs is one of the forces behind the rapidly rising cost of health care.

Larry Colley, a local doctor who helps run a company called Dominion Benefits that works with businesses to find the best insurance options, said there is nothing nefarious about doctors getting paid by drug companies. However he said it’s part of a system that contributes to the rocketing costs of health care, because medications that are marginally better but drastically more expensive become more prevalent.

“Doctors don’t care about anything except the patient. If they thought a treatment would cost the patient ten times as much, they would explain the difference and let the patient choose. But most patients don’t pay the costs, so they end up using more expensive medications,” Colley said.

“Doctors are taking a fairly pure scientific view of it. Let’s say new drug has some marginal benefit relative to an older drug… maybe a pill can be taken once a day instead of twice … and outcomes are marginally better because of compliance– so there is a marginal therapeutic advantage. But when the new drug is rolled out, there is a gigantic leap in costs. Marginal cost-effectiveness is poor, and that might not sell if the patient were paying in full, but neither the doctor nor the patient hesitates when the lion’s share of the cost is paid with other people’s money.”

“It’s not that drug companies are evil or irrational. Their duty is to maximize shareholder value. The problem comes back to the other people’s money syndrome. That’s what corrupts the system and distorts the economics of health care.”

The Virginia Commonwealth University School of Medicine has had a policy in place since July 2009 that restricts and and monitors activities of its physician faculty in their work with drug companies. Faculty cannot give presentations that are prepared by industry or let industry use their names on articles that they did not write.

“Our goal was not to prevent or discourage relationships with industry,” said Jerome Strauss, dean of the school, “only to put them in a context which protects both the institution and the faculty member, as well as the industrial partner, from any potential criticism or perception that their was a conflict of interest that would be viewed as harming in anyway the development of science, discovery or patient care.”

Faculty must receive permission from their department chair and the dean’s office before engaging in any outside activity with a drug company, as well as submit an annual report of their activities.?? A handful of VCU faculty were listed in the Dollars for Docs report.?? Strauss said drug companies need the opinion and expertise of experts in their field when they are developing new products, and that it is not uncommon for faculty members to serve on advisory committees.?? “We view this as beneficial and important interaction,” said Strauss. “The success of the American pharmaceutical industry is in large part based on a collaborative effort between thought leaders in their particular disciplines and their industrial partner.”

Strauss said the report and further disclosures are a good thing. Strauss said they also publish disclosures on their own website.??“We live and die by the public trust. If the public thought we are fundamentally a marketing arm of the drug companies, they would be very suspicious of the nature of the care we delivered,” Strauss said. ??“Its wonderful these things are reported. The transparency in the discussion is key.”

You can view the full ProPublica report and coverage here.

When they aren’t seeing patients, some doctors in Richmond are getting paid big bucks by the nation’s largest drug companies for consulting and speaking gigs.

Investigative journalism organization ProPublica has come out with a report called Dollars for Docs that details payments made by seven of the biggest pharmaceutical companies to physicians across the country. The data cover 2009 and most of 2010 and was compiled from disclosures recently made by the companies primarily as a result of legal settlements. Companies included in the report are AstraZeneca, Cephalon, GlaxoSmithKline, Eli Lilly, Johnson & Johnson, Merck and Pfizer. Together they account for 36 percent of the U.S. market.

In Richmond, 90 doctors received more than $1 million in payments over the past year and a half from those companies, about a fifth of the total amount of payouts statewide. You can view a full list of here.

Nationwide, drug companies pumped out $257.9 million during the reporting period.

Two Richmond area doctors received more than $100,000, according to the report. A total of 384 physicians across the country passed the $100,000 mark.

Jefferson M. Sommers, a psychiatrist with Insight Physicians, was reported to have received $112,193 from two drug companies for leading educational programs for health-care professionals. Most of those payments came from Eli Lilly, with $2,937 being provided by Pfizer. According to the report, the payments covered Sommers’s participation in 51 activities.

Sommers did not respond to requests for comment by press time.

The Richmond doctor receiving the most from drug companies in the reporting period was James Wigand, an endocrinologist with CJW Medical Center. Wigand received $119,554 for his work with Eli Lilly, and he also received a payment of $1,800 from AstraZeneca.

Wigand dismisses the notion that the payments pose any conflict of interest and says that his speaking engagements are not to promote specific drugs but rather to help primary care doctors better recognize and treat Type II diabetes.

“The reason this work is so important is we have an epidemic of Type II diabetes,” Wigand said. “By 2050, one in three Americans are projected to have the disease.”

Wigand said there is an unmet need for education among primary care physicians on treatment of Type II diabetes, given that they treat the majority of patients with the disease.

All the talks are given within FDA guidelines, according to Wigand, and all payments are within the caps set by the government.

“When you have a program, you have to be fair and balanced, not just promoting a certain drug,” Wigand said. “If they decide at the end of the day want to use Eli Lilly insulin, that is their decision. My goal is to provide information to treat patients better.”

Wigand said he gives talks throughout Virginia and in parts of North Carolina. According to the report, Wigand has participated in 65 engagements over the past year and half. Most of the speaking engagements are small sessions inside a doctor’s office or at a restaurant.

Wigand said his opinion is mixed on whether the recent disclosures are a fair process.

“At the end of the day, how much I make is my business and my tax lawyer’s business and no one else’s. No one questions an attorney who makes $500 an hour,” Wigand said.

“Medicine is a good whipping post. Are there abuses in medicine? Absolutely. The good part about it is important to know. [For instance] if some people are speaking for five, six or seven different dug companies. In that case, some people may wonder what’s going on there.”

The cost of prescription drugs is one of the forces behind the rapidly rising cost of health care.

Larry Colley, a local doctor who helps run a company called Dominion Benefits that works with businesses to find the best insurance options, said there is nothing nefarious about doctors getting paid by drug companies. However he said it’s part of a system that contributes to the rocketing costs of health care, because medications that are marginally better but drastically more expensive become more prevalent.

“Doctors don’t care about anything except the patient. If they thought a treatment would cost the patient ten times as much, they would explain the difference and let the patient choose. But most patients don’t pay the costs, so they end up using more expensive medications,” Colley said.

“Doctors are taking a fairly pure scientific view of it. Let’s say new drug has some marginal benefit relative to an older drug… maybe a pill can be taken once a day instead of twice … and outcomes are marginally better because of compliance– so there is a marginal therapeutic advantage. But when the new drug is rolled out, there is a gigantic leap in costs. Marginal cost-effectiveness is poor, and that might not sell if the patient were paying in full, but neither the doctor nor the patient hesitates when the lion’s share of the cost is paid with other people’s money.”

“It’s not that drug companies are evil or irrational. Their duty is to maximize shareholder value. The problem comes back to the other people’s money syndrome. That’s what corrupts the system and distorts the economics of health care.”

The Virginia Commonwealth University School of Medicine has had a policy in place since July 2009 that restricts and and monitors activities of its physician faculty in their work with drug companies. Faculty cannot give presentations that are prepared by industry or let industry use their names on articles that they did not write.

“Our goal was not to prevent or discourage relationships with industry,” said Jerome Strauss, dean of the school, “only to put them in a context which protects both the institution and the faculty member, as well as the industrial partner, from any potential criticism or perception that their was a conflict of interest that would be viewed as harming in anyway the development of science, discovery or patient care.”

Faculty must receive permission from their department chair and the dean’s office before engaging in any outside activity with a drug company, as well as submit an annual report of their activities.?? A handful of VCU faculty were listed in the Dollars for Docs report.?? Strauss said drug companies need the opinion and expertise of experts in their field when they are developing new products, and that it is not uncommon for faculty members to serve on advisory committees.?? “We view this as beneficial and important interaction,” said Strauss. “The success of the American pharmaceutical industry is in large part based on a collaborative effort between thought leaders in their particular disciplines and their industrial partner.”

Strauss said the report and further disclosures are a good thing. Strauss said they also publish disclosures on their own website.??“We live and die by the public trust. If the public thought we are fundamentally a marketing arm of the drug companies, they would be very suspicious of the nature of the care we delivered,” Strauss said. ??“Its wonderful these things are reported. The transparency in the discussion is key.”

You can view the full ProPublica report and coverage here.

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Casey Quinlan
Casey Quinlan
11 years ago

The key to the root cause of the healthcare cost conundrum in the US is in the quote from Dr. Larry Colley: “It’s not that drug companies are evil or irrational. Their duty is to maximize shareholder value. The problem comes back to the other people’s money syndrome. That’s what corrupts the system and distorts the economics of health care.” Other people’s money is always much easier to spend than one’s own – be it tax dollars, share value dollars, or insurance dollars Until healthcare consumers in this country – commonly called “patients” in the medical care delivery system –… Read more »

anonymous
anonymous
11 years ago

“Making consumers more aware of the cost of their care, and encouraging them to manage that cost, will help drive down the rising chronic disease rate in the US and the rising cost of care.”

Consumers are aware that health care is becoming less affordable. The population is growing older and more infirm. Universal, single payer is the way to go (which is the way the rest of the world has already gone). Unfortunately, corporate greed has corrupted our political process and it looks like tough times ahead.

Jennifer Evans
Jennifer Evans
11 years ago

The point is wheter it is ethical for a pharma doctor to receive large sums of money from big pharma companies. If a doctor makes a third of his income from Eli Lily, does that decide what drug he will prescribe? If I made a third of my income from a particular source, I’m going to feel some loyalty to that source. That source is putting food on the table and housing over my head. Ofcourse, as the article stated, it is not illegal to take big money from pharma. Maybe the doctors in the article can be objective with… Read more »