New data show drugmakers' payments to hundreds of thousands of doctors in the US, and some have made well over $500,000
Update Mar. 11, 2013, 4:55 pm: This post has been updated to reflect a response by Dr. Vladimir Maletic to questions from ProPublica.
Dr. Jon W. Draud, the medical director of psychiatric and addiction medicine at two Tennessee hospitals, pursues some eclectic passions. He’s bred sleek Basenji hunting dogs for show. And last summer, the Tennessee State Museum featured “African Art: The Collection of Jon Draud.”
But the Nashville psychiatrist is also notable for a professional pursuit: During the last four years, the 47-year-old Draud has earnedmore than $1 millionfor delivering promotional talks and consulting for seven drug companies.
By a wide margin, Draud’s earnings make him the best-paid speaker in ProPublica’s Dollars for Docs database, which has been updated to include more than $2 billion in payments from 15 drugmakers for promotional speaking, research, consulting, travel, meals and related expenses from 2009 to 2012.
Payouts to hundreds of thousands physicians are now included.
Draud is not the only high earner: 21 other doctors have made more than $500,000 since 2009 giving talks and consulting for drugmakers, the database shows. And half of the top earners are from a single specialty: psychiatry.
“It boggles my mind,” said Dr. James H. Scully Jr., chief executive of the American Psychiatric Association, referring to the big money paid to some psychiatrists for what are billed as educational talks.
Paid speaking “is perfectly legal, and if people want to work for drug companies, this is America,” said Scully, whose specialty has often been criticized for its over-reliance on medications. “But everybody needs to be clear — this is marketing.”
When Dollars for Docs launched in 2010, it gave the first comprehensive look at the money that drug companies spend to enlist doctors as a sales force. The new data show how payouts to psychiatrists like Draud and other doctors have added up over time. And they underscore the key role physicians play for drugmaker profits even as scrutiny and criticism of such payments grows.
The companies say physician speakers are the best messengers to teach their peers about new and effective treatments. But critics counter that the speakers are little more than highly credentialed pitchmen who typically use the drug companies’ slides and talking points to sell rather than educate.
Attention to the issue has prompted prominent medical schools to tighten rules on faculty acceptance of drug company money for such talks. Questions about undue industry influence also have be deviled medical journals and professional groups representing physician specialists.
Susan Chimonas, a research scholar at the Center on Medicine as a Profession at Columbia University, said many medical centers that regulate interactions between drug companies and their doctors would be “alarmed” by the high tallies in the updated Dollars for Docs.
“How do these folks have time to do their real jobs if they’re speaking so much?” Chimonas said. Hospital administrators, she predicted, would be “concerned not only about the conflict of interest, but also the conflict of commitment.”
Draud’s $1 million in drug company earnings is probably a minimum figure. Some of the seven companies he represented have reported their payouts for only a short time. And Draud has separately disclosed ties with at least four additional companies that haven’t revealed how much they pay speakers.
Draud has friends among the other highest-paid doctors in the database. He teaches continuing medical education courses with fellow psychiatrists Rakesh Jain and Vladimir Maletic. Jain, of Lake Jackson, Texas, has earned $582,049. Maletic, of Greer, S.C., made $527,850 , according to Dollars for Docs. Both also speak for other companies that keep their payments private.
Draud did not return several messages seeking comment. But in an interview, Jain said he loves teaching and delivers the same lectures about drugs and medical conditions regardless of whether a drug company is paying him.
“I am not a marketer, I am an educator,” Jain said.
In a later email, Jain said he is proud of his collaboration with Draud. “He’s been fair, balanced and is wickedly smart. And I like smart people who serve community needs.”
In written responses provided after this story published, Maletic said he speaks about treatments for mood disorders, schizophrenia and sleep-wakefulness disorders because he believes that “good quality education about pharmaceutical products may be beneficial to both physicians and their patients.”
Maletic said he uses company-prepared presentations because they are required to ensure compliance with federal rules. Asked how often he speaks, he replied, “The frequency of speaking varies, but based on the numbers that you have quoted, it may possibly be too often.”
Jain, Maletic and many top earners also have active clinical or research practices.
Next year, every drug and medical device maker that pays physicians will have to report such spending to a federal database as part of the Affordable Care Act health reform law. The first disclosure, scheduled for public release in September 2014, will include payments from August to December of this year.
The companies in Dollars for Docs accounted for about 47 percent of U.S. prescription drug sales in 2011. It’s unclear what percentage of total industry spending on doctors they represent, because dozens of companies do not publicize what they pay individual doctors. Most companies in Dollars for Docs are required to report under legal settlements with the federal government.
Even the $2 billion total underrepresents spending by these companies. Some in the database have begun reporting only in the past year, and others report spending in only a few categories. In addition, two companies reported some payments in ranges, so that spending was excluded from the total.
Overall, roughly half the payments were for research. A third went to speakers and the rest was for consulting, educational materials, meals and travel.
For Some Docs, An Earnings Drop
The push for transparency on physician payments started years ago.
Studies began showing that even trinkets doled out by drug sales reps could affect physician attitudes. At the same time, drugmakers were settling federal lawsuits alleging that they paid kickbacks and encouraged doctors to push drugs for unapproved uses. Two U.S.
senators began calling out prominent physicians for not properly disclosing financial ties to the companies.
Dollars for Docs took transparency a step further by putting the available payment disclosures in one place and making them easy to search.
In 2010, many universities and teaching hospitals were surprised to find that their faculty members were engaged in promotional speaking. ProPublica compared the faculty lists of institutions with conflict-of-interest policies barring such speaking with the database and found a number of physicians in violation.
Drug firms, too, learned of problems with their chosen speakers. ProPublica found their rosters peppered with some physicians who had serious disciplinary actions against their medical licenses.
Only a handful of doctors who were among the 20 highest-paid in 2010 have maintained their level of income from speaking, the new data show.
Ten of the doctors dropped from making about $100,000 a year to less than $20,000 in 2012. Some doctors whose payments declined spoke about drugs the companies are no longer pushing. Others, like prominent cancer expert David Rizzieri at Duke University School of Medicine, faced new restrictions from their employers.
Rizzieri had been a speaker for Cephalon, GlaxoSmithKline and Novartis in 2010 and 2011. But after Duke restricted participation in speakers’ bureaus, his speaking pay dropped markedly in 2012, the new data show. All told, Rizzieri has received at least $567,300 in speaking and consulting payments since 2009.
Dr. Ross McKinney Jr., director of the Trent Center for Bioethics, Humanities and History of Medicine at Duke, said university officials “had multiple discussions” with Rizzieri, who “is getting more restrained.”
McKinney said Duke physicians can deliver paid talks about diseases, but only if they use their own slides and presentation materials. “The general tone is a little bit more distant and less cozy than it used to be,” he said.
In an email, Rizzieri said he still did some paid speaking that is allowable within Duke’s new guidelines, but has focused his attention on a series of educational talks developed by the Division of Cellular Therapy at Duke.
New Drugs, New Dollars
Drug companies say their spending often reflects market realities — not a changing opinion on the use of physician speakers. Should a top-selling drug lose its patent, allowing cheaper generics to compete, there’s no impetus to push sales. A new drug or a new approved use for an existing drug, conversely, may prompt a burst of speakers.
New York’s Forest Laboratories, for example, is a fraction the size of its Big Pharma brethren Pfizer, AstraZeneca and Merck. But when it comes to paying doctors to promote its products, the drugmaker has recently dwarfed its rivals.
During the first three quarters of 2012, Forest spent $31 million on doctors who touted the virtues of such drugs as Bystolic for high blood pressure, the antidepressant Viibryd, and Daliresp for chronic obstructive pulmonary disease. Nine doctors each made nearly $100,000 from Forest in that time alone, the data show.
Pfizer — whose U.S. sales are five times greater than Forest’s — spent a fifth of Forest’s total, paying out $6.2 million to promotional speakers during the same period. AstraZeneca, second to Pfizer in sales, spent $12.2 million.
Forest spokesman Frank Murdolo said in an email that the company spends more on speakers because it doesn’t use pricey direct-to-consumer TV marketing. It also has more new drugs than its competitors, Murdolo said.
In contrast, GlaxoSmithKline spent $52.8 million on speakers in 2010. That fell to $24.1 million in 2011 and $7.6 million in the first three quarters of last year.
Glaxo spokeswoman Mary Anne Rhyne wrote in an email that the company’s spending tracks with new drugs or new uses for existing products. “That activity has been relatively low in the past year, so spending for speaker programs has been lower, too,” she said.
The top recent speaking programs for Glaxo involved Advair, a drug for asthma and chronic obstructive pulmonary disease, and Jalyn, which treats problems with urination for men with enlarged prostates, Rhyne said.
Glaxo and other top pharmaceutical companies have laid off thousands of workers in the past couple of years as their top drugs have lost patent protections, the pipeline of new drug approvals has slowed and cost pressures arose.
Other companies contacted by ProPublica about their spending would not reveal which products they paid speakers to extol or why.
“We don’t disclose how we allocate our speaker program budget,” Tony Jewell, a spokesman for AstraZeneca, said in an email. AstraZeneca’s spending on promotional speakers decreased from $31.6 million in 2010 to $17.6 million the following year and $12.2 million in the first three quarters of 2012.
“The decrease in spending is based on a variety of factors, including where our medicines are in their life cycles and brand budgets and strategies,” Jewell wrote.
The company’s blockbuster antipsychotic drug Seroquel went off patent last year. Another top drug, Nexium, which treats acid reflux, goes off patent in 2014.
Because each company is in a different stage with its blockbuster drugs, it’s difficult to compare their outlay on speakers and consultants head to head.
It may be too soon to tell whether continued publicity over the spending will cause companies to cut back further, said Chimonas, of the Center on Medicine as a Profession. But transparency might be having some effect.
At a recent conference, Chimonas said she heard that pharmaceutical companies themselves are using the disclosures about payments to “push back on doctors who are greedy.”
“They can say, ‘No. We see you’re taking this amount of money from our competitor. Why should we give you more than that?’” she said.
A Harder Sell For Antipsychotics
Once a reliable profit machine for drug companies, psychiatric drugs are now a challenge. And drugmakers are fighting hard to stanch the losses.
Starting in the 1990s, when the second generation of antipsychotics hit the market, drugmakers enjoyed a period of wild profitability. Doctors embraced these new drugs, such as Risperdal, Seroquel and Zyprexa, as safer and causing fewer of the troubling side effects of older psychiatric drugs. Domestic sales of Seroquel hit $4.7 billion in 2011, the year before it went off patent.
But as the drugs lost their patent protection, their makers have tried to shift the market to newer drugs in their stables. Critics say these new drugs are not appreciably different, but the drug companies claim they are easier to take or have fewer side effects.
Johnson & Johnson, for example, lost its Risperdal patent in 2008 but now markets Risperdal Consta, a long-acting injection, and Invega, another antipsychotic. AstraZeneca lost Seroquel but is now marketing Seroquel XR, which works for an extended period.
The pressure to reclaim sales is great. Overall, the market for antipsychotics dropped from $18.5 billion in 2011 to $13.7 billion last year, according to IMS Health, which closely tracks the industry’s ups and downs.
The newer drugs, like their predecessors, need someone to explain their benefits, several doctors said.
“I actually enjoy the aspect of educating my counterparts about developments in the field,” said Dr. Gustavo Alva, a California psychiatrist.
Alva has received $663,751 speaking and consulting since 2009 for the companies in Dollars for Docs. He separately discloses speaking for other companies as well.
Tighter restrictions on speaking and consulting mean doctors will be less up to date on new treatments, according to several current physician speakers.
Psychiatrists aren’t always among the highest-paid. In 2010, when Dollars for Docs first launched, endocrinologists represented 11 of the 43 top money-making speakers. From year to year, the in-demand specialists are largely a function of the market.
But critics say psychiatrists are a particular concern because of their controversial role when the first waves of new antipsychotics hit the market.
AstraZeneca, Johnson & Johnson and Eli Lilly have paid billions in settlements to the federal government over allegations that they paid doctors to push these drugs for unapproved uses from children to seniors with dementia. One lawsuit alleged that a Florida psychiatrist switched patients from drug to drug based on his relationships with companies.
Texas psychiatrist Jain acknowledges the excesses of the past and said he does not excuse them. But he said he sees real value in the new brands because they give psychiatrists options if their patients are not responding to older drugs.
He said he has recently spoken on behalf of Forest’s antidepressant Viibryd, Merck’s antipsychotic Saphris, Lilly’s ADHD drug Strattera, Pfizer’s antipsychotic Geodon and its antidepressant Pristiq.
Having the financial support of drug companies does not lessen the value of this teaching, he said.
Jain’s tally in Dollars for Docs does not reflect his work with another group that is heavily sponsored by drugmakers.
Jain, top-paid speaker Draud and Maletic all serve on the advisory board and steering committee of the U.S. Psychiatric and Mental Health Congress, which will hold its annual convention in Las Vegas in September and October. Maletic is the 2013 program chairman.
The convention receives financial support from several drug companies, and some of its presentations are sponsored by the firms, according to information on its website. Much like professional medical societies, the congress also collects fees for drug company ads on things attendees see at their conventions, from tote bags to hotel room keys.
The congress is owned by North American Center for Continuing Medical Education, LLC, a for-profit New Jersey company that provides continuing medical education courses. Health professionals must take such classes periodically to retain their licenses. Draud, Jain and Maletic also teach classes for the company.
In response to written questions, Randy P. Robbin, president of the company, said members of the steering committee have “demonstrated experience and expertise in mental health and commitment to providing the highest quality education possible.”
The trio are paid for their work for the congress, but the money does not come from pharmaceutical sponsors, Robbin said. In continuing medical education courses, he said, drug companies don’t have a say in the educational content or speaker selection.
Jain said in an interview that his talks for the company are reviewed for bias before and after he speaks. “I cannot present anything at the Psych Congress that hasn’t been vetted repeatedly,” he said. “Pharma is not able to influence anything that I do at the Psych Congress.”
Scully, of the American Psychiatric Association, said he hopes all the drug company money doesn’t taint relationships between patients and their doctors.
“The public trust,” he said, “is too important.”
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In a mockery of RBI's independence, a lowly under-secretary of Dept. of Financial Services has issued a fatwa to government banks to penalise you if you pay your credit cards due by cheque! The under-secretary got this idea from HDFC Bank!
Nearly a month after Moneylife Foundation discovered and took up the issue of the Reserve Bank of India's (RBI) bizarre idea of penalising bank depositors for using cheques, we find that the idea or rather the fatwa to this effect had emanated from the finance ministry as far back as 25 October 2012 at the possibly at the instigation of India's most profitable bank.
On 25 October 2012, DD Maheshwari, Under Secretary in the Department of Financial Services sent out a fatwa marked "most immediate" to all chief executives of public sector banks (PSBs). The burden of this two-paragraph diktat was that "to discourage the use of physical/cash mode of transactions, all public sector banks are requested to consider charging a processing fee from the customer paying credit card dues either in cash or through cheque". HDFC Bank has recently increased such charges from Rs50 to Rs100 per transaction and has sent a communication to its customers in compliance with the regulatory requirement of giving a month's notice.
It doesn't stop at that, after holding up HDFC Bank's usurious charges as a role model for PSBs, the letter asks them to "consider issuing appropriate instructions in this regard" and send a "copy of the instructions" back to the finance ministry.
The finance ministry may have used the word 'consider', but its insistence that banks must report back to it shows that it is an order and various banks are planning to fall in line. The finance ministry's fatwa makes a mockery of the RBI's pretence that it is an independent regulator of banks, because the government has not even bothered to refer this issue to the central bank before issuing orders on what amounts to micro-management of bank charges.
RBI deputy governor Dr KC Chakrabarty has repeatedly exhorted customers to vote with their feet and move to another bank if they dislike the high costs and charges of foreign and private banks. It now appears that the finance ministry will forcefully intervene to ensure that they do not have PSBs to turn to.
The government, as owner of PSBs obviously feels it is within its rights to dictate charges, since it is coughing up vast sums of taxpayers money for bank recapitalisation (Rs14,000 crore is set to be pumped into PSBs for their recapitalisation just now). But instead of ensuring better loan recoveries from dubious industrialists such as Vijay Mallya of the UB group, realty companies and others, who owe tens of thousand crores to banks in bad loans, the government has hit upon the idea of punishing legitimate and tax paying bank customers with new charges.
It gets worse. The RBI, which has been lamenting that a large part of the Indian population is unbanked, then responds by setting up an internal committee to prepare a paper titled "Disincentivising Issuance and Usage of Cheques". This was put up on its website and open for public comment until 28th February. The report itself was kept low-key and been ignored by the mainstream media almost entirely. Moneylife had then pointed out that the plan to levy a series of punitive charges on the use of cheques, with the utopian objective of forcing people to use online money transfer facilities (such as NEFT and RTGS which are also charged) only punishes those with legitimate bank customers. Please read RBI Must Scrap No Cheque Idea, which is the most commented article in Moneylife since then.
Moneylife Foundation, which has over 21,000 members has sent a detailed memorandum to the RBI on behalf of depositors. Please see below...
A senior banker who writes for Moneylife under the pseudonym Gurpur also said that the RBI report on Dis-incentivising Issuance and Usage of Cheques "is a classic example of putting the cart before the horse. Because there are problems galore in the electronic payment system, and even before stabilising this, the RBI wants to dispense with the cheque system". See Incentivise usage of electronic payment systems before dis-incentivising usage of cheques. Gurpur followed it up with another article that pointed out how the UK had bowed to public pressure given up the idea of abolishing cheque usage. See UK govt bows to public pressure-rejects abolition of cheque system. Will RBI follow suit?
Moneylife had said, "The report on stopping the use of cheques makes you wonder whether RBI is accountable to us or exists solely to help banks enhance profits at the cost of customers, under the guise of seemingly lofty objectives". Ironically, the finance ministry's order makes it clear that it swings to the tune HDFC Bank.