Reuters Events | Pharma

Thought leadership and innovation for the Pharmaceutical Industry

Pharma spent over $1bn on payments to US physicians last year, ahead of the arrival of the Sunshine Act.

By Ben Steele on May 29, 2013

The figures, compiled for the Financial Times, revealed that 2012’s $1bn total is significantly higher than previous years. The firm added that this may be due to more companies reporting their payments for the first time. The Financial Times went on to say that at a company level, payments were mostly in decline as pharmacos that posted year-on-year numbers had shown a drop in spending compared with 2011.

The rise in total spending reported comes as pharma prepares for the Sunshine Act, a piece of legislation that will take effect in August, which will require pharma companies to disclose all payments made to physicians in the US. The figures show that pharma spending in 2012 was aimed at more than 500,000 doctors, paying for entertainment, consulting and research.

Critics have expressed concern over the extent of physician payments and the effect this has on prescribing behaviour; Daniel Carlat, director of the prescription project at Pew Charitable Trusts, commented that “there is so much data showing spending can unduly influence physicians, so that patients may be receiving the wrong and the more expensive medications.”

Merck tops the list with payments of £226m in 2012, the next highest spenders being Eli Lilly with $219m and Pfizer with $216m. Merck and Novartis were responsible for much of the increase in total spending last year, as this was the year both companies started providing more comprehensive data. Last year was also the first year that the newly-formed AbbVie, Forest and UCB reported their payments. Merck said in defence of its spending that “consulting engagements conducted with external experts result in… real-world knowledge and perspectives [which] contribute to advancing both science at Merck and in the broader scientific community and ultimately will benefit human health.”

Figures showed that industry funding for drug trials and other research accounted for the largest proportion of total payments, coming in at nearly $700m. Yet there was also $200m for advisory and consulting work, speaker’s fees, and almost $100m for meals. Eli Lilly calculated that its payments last year totalled $212m, stating that $181m was for clinical research and was paid to institutions, not to individual physicians or researchers. The company said that “Lilly adheres to the strictest ethical and legal standards for interacting with healthcare professionals. All of our US payments are reported to our physician payment registry.” The company also stressed that payments for clinical studies covered the care, testing and monitoring of patients and were paid to universities and hospitals without knowledge of how much the named “principle investigator” received.

As the industry is under no obligation to provide payment information until later this year when the Sunshine Act comes into force, several companies chose not to release their data: these include Sanofi, Roche, Bayer and Amgen. As of August all companies will have to begin compiling data if they haven’t already, and will submit the data to government agencies next spring. The data will be made available to the public by September next year.