Industry Paying Doctors: A Billion Dollar Industry

Some physicians pulling in hundreds of thousands of dollars a year, and it’s all documented online.

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How much money did your doctor make from industry last year?

If they’re like me, that answer is $0 but it’s not exactly uncommon for docs to get something of value from industry. Of around 900,000 physicians in the US, about 400,000–45% — received a payment from a pharmaceutical or device manufacturer last year.

We know this because of the Open Payments system, established by the Center for Medicare and Medicaid services in 2013 which requires disclosure of all non-research payments, whether in the form of cash, or lunches, or trips to exotic locales to physicians from these industries.

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And this week, in JAMA, we finally get to see how the existence of the Open Payments system — the transparency — has affected payments to physicians.

The bottom line? Industry is spending about as much on physician consulting and honoraria as they ever were, they are just concentrating those payments in a smaller pool of people. Let’s dig in a bit.

In 2014, the first year where full data was available, industry spent $1.9 billion paying out consulting fees and honoraria and whatnot. 52% of physicians got some payment from industry that year. To be fair, it wasn’t a ton — the median physician got $215. But there’s a big skew here — the top earners were pulling in more than $500,000 a year.

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Over time, fewer physicians got any sort of payment. But the overall payment didn’t decrease as much — payments were getting concentrated in those higher tiers. Oh to be a key opinion leader.

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Putting all the years together, Pharma spent about $9 billion paying US physicians. Almost 50% of that went to physicians who received more than $500,000 a year from industry. Industry is not an equal opportunity lender.

Does it matter? I mean, it’s a free country — why should we care what Pharma does with their money? Well, the obvious answer is it matters if these payments have an effect on treatment.

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Another study in JAMA this week, from some very talented folks here at Yale Medicine looks at this very topic among interventional cardiologists.

The setup is this: some patients need implantable cardioverter-defibrillators (ICDs). There are multiple manufacturers of ICDs, so which ones do providers choose to put in?

The authors examined 145,900 patients who had an ICD implanted. Around 5000 of them were implanted by a physician who hadn’t received any payments from industry. The remaining 140,671 were implanted by docs who had received payments. OK.

Now, prior research has shown that most physicians do not feel their practice patterns are changed based on payments from industry.

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What does this study show? Well there were four ICD manufacturers examined — each patient got one of those, of course. The researchers then looked at industry payments to see which of the four manufacturers paid the implanting doctor the most. They then looked to see if there was a relationship between who paid you the most and what you put in the patient.

The results are pretty clear. If a patient got device A, the biggest payer to doctors was company A. Same with B, C, and D.

Now there are two ways to look at this.

One is that physicians are being bought and paid for — just implanting whatever device will keep their paymasters in industry happy.

But that’s not the only explanation.

There’s an interesting political analogy here. I heard this when I was talking about campaign contributions to one of my politico friends. I said that they are basically legalized bribery.

She said no, that’s not how it works at all. Why would you pay someone to change their position on something, when you can just use your money to get the true believer elected?

The same thing may be happening here. Docs may, over years of experience, develop a preference for device B or C. Perhaps the money flows to that — after all, isn’t it easier to pay speaking fees for a person who really loves your product, than to throw money at someone to get them to change their mind?

The truth may lie somewhere in the middle, as it usually does. And let’s not forget, that my less nefarious explanation doesn’t explain why some docs get so much more than others.

Together, these studies show us that Open Payments did not make the practice of industry paying docs disappear, it just consolidated it a bit. I don’t get the sense that many docs are particularly shamed by their open payments data. And it is well worth your time to put in the names of some medical luminaries to see what they are pulling in.

Bottom line: Industry has clearly budgeted for this kind of thing — so they must think it works. And the sunlight of the Open Payments system has probably not disinfected the whole process. Substantive change here, if there is appetite for it, will probably take legislation. In the meantime, for the 500,000 docs like me who have $0 in industry payments, take heart, at least we don’t have to spend time at those interminable Pharma dinners.

A version of this commentary first appeared on

Writing about medicine, science, statistics, and the abuses thereof. Commentator at Medscape. Associate Professor of Medicine at Yale University.

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