California pay to play is no more. The Golden State is set to become the first state in the U.S. to outlaw doctors from taking bribes or gifts from big pharmaceutical companies. Senate Bill 790 would ban company-influenced peddling of drugs and the corrupt “pay to play” system (perks to doctors for promoting brand name drugs) that has grown around the drug industry over the past few decades.
Brand name drugs generate an astonishing $73 billion every year, even though their generic non-brand name counterparts are made for less than a quarter of the cost. Generic drugs are on average between 80 and 85 percent cheaper, according to the FDA, and in 2010 the use of generic drugs over brand-name drugs saved $158 billion, at an average of $3 billion every week.
California pay to play doctors have received more benefits at the hands of drug companies than in any other state in the U.S. In 2014 Big Pharma lined the pockets of medical professionals to the tune of $1.4 billion through pay to play and other perks.
In California, pharmaceutical firms spend more in doctor payments than they do for research and development of new drugs. California State Senator Mike McGuire has been particularly critical of the corruption in California’s health care.
“Financial relationships between some physicians and pharmaceutical companies confirm what has been suspected — financial incentives change minds,” he comments.
And this isn’t just a problem in California either, a study released in May 2017 in the Journal of the American Medical Association found that in 2015 around half of U.S. doctors received payments from the pharmaceutical and medical device industries, totaling $2.4 billion. These payments can have a significant effect on the type of drugs that doctors prescribe.
Ian Larkin, an assistant professor at the University of California, Los Angeles Anderson School of Management, was part of the research team that found that doctors at academic medical centers were more likely to prescribe cheaper generic drugs than expensive brand-name drugs after hospitals adopted rules restricting pharmaceutical sales visits, the researchers said.
“If a doctor was prescribing that drug 100 times a month, our estimate is it would go down to about 92 times a month after the restrictions were put in place,” Larkin says. “That’s actually a very substantial change.”
The new law in California is aiming to address these issues, and hopefully replicate and improve upon the results shown in this study. One of the main problems the law hopes to overcome is the ambiguity over what constitutes a “bribe” or “kick-back” for doctors. Charlie Ornstein, senior editor for the nonprofit newsroom ProPublica, has been watching the way in which Big Pharma has learned to twist the system:
It’s illegal to give kickbacks to a doctor to prescribe drugs, but it is legal to give money to doctors to help promote your drug. Some doctors make tens of thousands or hundreds of thousands of dollars a year beyond their normal practice just for working with the industry.
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Legalized Bribery
A study done recently by UCSF found that doctors who receive industry gifts such as meals, travel, speaking fees, and royalties were two to three times more likely to prescribe name-brand drugs over lower priced generic drugs. So doctors are not receiving quid pro quo bribes, but the subtle encouragement to support these brand name drugs is ever-present in the industry through perks.
This law change, as Senator McGuire rightfully pointed out, is about putting “patients above profits.” By outlawing these sorts of payoffs and perks, doctors and hospitals will be pushed to focus on cost-saving measures – something that could have a massive impact on public health given the spiraling medical and prescription costs the U.S. relative to the rest of the developed world.
Although some opponents (such as California Senate Minority leader Patricia Gates) of the bill have argued that there are already restrictions on these sorts of payoffs, it is difficult to dismiss the links between the use of brand name drugs and the benefits accrued through work with large pharmaceutical firms. So, while a number of hospitals have started to implement their own internal policy restricting these gifts and bonuses, there is a need to codify the law statewide to reduce the grip of Big Pharma on the medical industry as a whole; especially when it comes to California pay to play — the most lucrative benefactor so far.
Proposed California Pay To Play Bill — Closer Look
Under the legislation as currently drafted, “Gift” means either of the following:
(1) Anything of value provided for free to a health care provider.
(2) A payment, food, entertainment, travel, subscription, advance, service, or anything else of value provided to a health care provider, unless it is an allowable expenditure as defined in subdivision (a) or the health care provider reimburses the cost at fair market value.
For example, companies are permitted to pay for meals for doctors as long as the costs are below $250 per year per individual doctor and educational events but not all education. So there is little ambiguity in the purpose of the law – doctors should not be in the deep pockets of Big Pharma.
We spoke to Doctor and author of True Cost Of Health Care, David Belk, to see whether he thought that the new law could curb California pay to play — the pharmaceutical industry’s power in the drugs that doctors prescribe.
“That’s very difficult to predict. Until the law is in effect it will be very difficult to know how strictly it will be enforced and what methods the pharmaceutical companies might use to get around it — they’re quite clever.” Doctor Belk tells us:
In general, any law that reduces the influence pharmaceutical companies have on the prescriptions doctors write is a good thing. Doctors should be prescribing medications that best treat their patients, not the ones that utilize the best marketing strategies.
While he thinks that the outcomes of the law are hard to predict prior to its rollout across the state, research would suggest that there is little to no downside to preventing Big Pharma from using pay to play to boost drug sales. Belk also comments:
The only downside I can think of right now is that this law doesn’t go far enough. I wouldn’t mind seeing all doctors who get payments from pharmaceutical companies, either for ‘research’ or ‘educational talks’ barred or at least restricted from practicing medicine in the general community. I know that sounds harsh, but if a doctor is on the payroll of a large pharmaceutical corporation, their interests aren’t necessarily aligned with those of their patients.
The State Senate approved the California pay to play bill in May. It is moving forwards to a vote by the full assembly — possibly within days. The real world effects of the law won’t become clear until after it has been implemented, but it is fantastic to see California taking a stand against Big Pharma and the pay to play pharmaceutical practices that have become the norm across the country.
Josh Hamilton is an aspiring journalist from Belfast, Northern Ireland, living in London, Ontario. Lover of music, politics, tech and life. Editor in chief at rel=”noopener noreferrer” data-saferedirecturl=”https://www.google.com/url?hl=en&q=https://www.TheJist.co.uk&source=gmail&ust=1498191722045000&usg=AFQjCNGlZLAu64ULp7fNX9Tr-mTvSMSciA”>www.TheJist.co.uk.
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