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What do 9.4 million lunches, breakfasts and funded coffee breaks do for the healthcare professions?
Right on schedule, and with, according to CMS, 98.8% validated records (of a total of 11.41 million records), the Open Payments system delivered the results on calendar year 2014. Open Payments comes out of the Physicians Sunshine Act, requiring drug and medical device manufacturers to document “transfers of value” to physicians and teaching hospitals. Pharma and med-device spent a total of $6.49 billion on over 600,000 physicians and 1,100 teaching hospitals in that year, says CMS.
In 2014, following several delays, CMS reported on the latter five months of 2013 under the Open Payments system, and with a sizable percentage of exclusions due to validation problems. The 2013 near-half-year data are now mostly complete as well, showing $3.43 billion spent in 4.3 million transactions.
Open Payments covers both interactions between medical researchers (such as for clinical trials) and buying lunches and offering speaking engagements to practicing physicians (which CMS calls “general payments”). A third category—smaller than the first two—details ownership or investment transactions between healthcare providers (HCPs) and drug and device companies. For 2014, research payments totaled $3.23 billion; general payments totaled $2.56 billion.
An important part of “general payments,” however, is royalties, which includes patented technology licensed from researchers by pharma companies. According to ProPublica, which has been tracking industry-HCP payments under its “Dollars for Docs” program since 2010, the biggest payer has been Genentech, spending $387.7 million on general payments ($274 million in calendar year 2014 alone), but a major portion of that is royalties on the Rituxan, Avastin and Herceptin drug franchises to City of Hope National Medical Center (Duarte, CA). Overall, royalty payments totaled $803.5 million in 2014, or 31% of general payments.
ProPublica also published this breakdown of 2014 general payments: promotional speaking, $632.4 million; consulting, $369.4 million; food and beverage, $224.5 million. The food-and-beverage total represents 9.4 million individual records—and that represents 82% of any type of Open Payments interaction between industry and HCPs. ProPublica’s focus on Open Payments is more about which physicians are getting paid rather than which companies are doing the paying; it reports that 768 physicians received a payment on more than half of the days of the year in 2014—which indicates either an HCP with a hearty appetite or, more likely, a busy office with staffers who like the free food. Among the group of all physicians who received at least one payment in 2014 (and apparently including all types of payments), the average expenditure per physician is $186. Left out of the Open Payments system, however, is the other major item of value for doctors’ practices: free samples. Exact data on sampling is hard to come by, but various industry estimates put the figure at several billion dollars in the US annually.