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Drug and Medical Device Companies Shelled Out $7.5 Billion to Docs and Hospitals in 2015

July 5, 2016, 9:33 PM UTC
Healthcare companies
BERLIN, GERMANY - SEPTEMBER 05: A doctor holds a stethoscope on September 5, 2012 in Berlin, Germany. Doctors in the country are demanding higher payments from health insurance companies (Krankenkassen). Over 20 doctors' associations are expected to hold a vote this week over possible strikes and temporary closings of their practices if assurances that a requested additional annual increase of 3.5 billion euros (4,390,475,550 USD) in payments are not provided. The Kassenaerztlichen Bundesvereinigung (KBV), the National Association of Statutory Health Insurance Physicians, unexpectedly broke off talks with the health insurance companies on Monday. (Photo by Adam Berry/Getty Images)
Photograph by Adam Berry—Getty Images

Drugmakers and medical device companies continued to dole out billions of dollars in payments to physicians and hospitals last year, according to new government data released last week. In fact, the $7.52 billion that the industry paid in 2015 is a slight uptick from 2014, when firms paid $7.49 billion (these figures include about $1 billion in investment interest).

The Affordable Care Act, or Obamacare, contained a provision called the Physician Payments Sunshine Act which established a public database of how much biopharma and device manufacturer money goes to doctors and medical institutions. This Open Payments hub is meant to help understand the financial relationships between the drug and broader health industries, including how such relationships may influence doctors’ behavior.

Device makers and drug developers can pay doctors or hospitals for a variety of reasons ranging from research to continuing medical education (CME) events to paid speeches, travel, and meals. Nearly 620,000 American doctors had payment records from 1,456 companies in 2015.

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Drug industry trade groups like PhRMA argue that these payments and relationships are critical to making sure that biopharma and physicians learn from each other in an effort to boost patient care. But the newly available data also allows for a closer examination of certain trends and correlations.

For instance, a ProPublica analysis of Medicare’s Part D prescription drug program found that doctors who received more industry money were also more likely to prescribe brand name, rather than cheaper generic, drugs. And the percentage of brand name prescriptions tends to increase with the amount of money received.

A separate study from JAMA Internal Medicine found that one of the most influential tools at drug and device makers’ disposal is simply treating a doctor to a cheap meal in order to promote a product.