Pharmaceutical Companies Paid Doctors, Hospitals $3B Last Year: Report

Despite a nationwide crackdown on kickbacks and other illegal promotions by the pharmaceutical and medical device industries, a new report suggests that manufacturers paid out billions of dollars in gifts and non-research related activities to hospitals and prescribing physicians in 2018.

According to the Centers for Medicare and Medicaid Services (CMS) open payments data for 2018, physicians and hospitals received $3 billion in general payments from pharmaceutical and medical devices manufacturers, which is more than a 3.5% increase when compared to the previous year.

In 2018, Open Payments database indicated $3 billion was spent on general payments by “Big Pharma”, while another $4.93 billion was spent on research and development. According to the report, the general payments include everything from royalties paid to teaching hospitals, to physicians speaking and consulting fees, free food, and travel.

The top ten companies recorded spending the most in general payments to hospitals, medical centers and physician practices.

On the top of the list was Roche, and its U.S. subsidiary Genentech, which made more than $502 million in general payments, comprising about 17% of the industry’s total. Of the $502 million spent in general payments, $460 million was paid in the form of royalties to one academic medical center for several top cancer drugs, according to the report, leaving only $42 million to cover all other expenses.

Second on the list was Sanofi, and its subsidiary Genzyme, with $60.2 million in payments, while AstraZeneca and its MedImmune subsidiary was placed third on the list, spending $53.32 million.

Hospitals and physicians receiving kickbacks from drug and device manufacturers to boost sales of their products has become a focus of concern across the United States over recent years.

Although kickbacks are illegal in the United States, under the Anti-Kickback Statute and the Stark Law, a great deal of scrutiny has surrounded the amount of general payments being made each year to hospitals and physicians for non-research related endeavors. Officials have begun to question whether doctors are offering medical treatments based on knowledge and experience, or based on financial incentives provided the drug or device manufacturer.

According to findings published in September 2017 by the American Journal of Public Health, about one out of every 12 doctors receive some type of financial compensation from narcotic painkiller drug companies. The report highlighted the role doctors play in the increasing severity of the opioid abuse problems that cause thousands of deaths nationwide.

Nearly 400,000 opioid-related payments were made to more than 68,000 doctors, equaling more than $46 million. The top one percent of gifted doctors received nearly 86% of payments.

Payments included money for speaking fees, consultant fees, travel and meals. Overall, 63% of value of the payments were for speaking fees or honoraria, while more than 94% of the number of gifts given were for food and beverage payments.