Posted On: January 24, 2012 by Montross Miller Muller Mendelson & Kennedy

FDA to Require Drug Companies to Disclose Payments to Doctors

006.JPGPharmaceutical companies will soon be required to disclose payments that they make to doctors. The aim is to increase transparency, and ensure that doctors influenced by these payments do not make medical decisions that impact patient safety and increase healthcare costs.

Every year, thousands of doctors across the country receive payments from pharmaceutical drug companies. Doctors are paid for research they conduct, as well as for consulting and speaking engagements. Besides making cash gifts, many companies also pay doctors in the form of dinners and vacations. There are a large number of doctors across the country who receive such payments from pharmaceutical companies. In fact, the pharmaceutical drug industry spends millions of dollars every year on such payments.

Several studies have indicated that doctors can be influenced by the payments that they receive from pharmaceutical companies. These doctors, it has been found, are much more likely to contribute to high costs of medical care by prescribing more expensive drugs, or recommending medical devices even when they are not necessary.

According to one study by the New York Times, approximately 25% of all doctors accept cash payments from pharmaceutical drug companies or medical device manufacturers. Approximately 2/3rd of doctors also routinely accept other kinds of gifts from these companies, like spa vacations. One study conducted by the New York Times found that doctors who receive payments like these from pharmaceutical drug companies often practice medicine in a different manner compared to those who do not accept gifts or cash payments. For instance, doctors who are paid are much more likely to prescribe drugs for off-label purposes.

An off-label purpose is a purpose which has not been approved by the Food and Drug Administration. Doctors are not prohibited from prescribing drugs for off-label purposes, and can prescribe drugs for unapproved uses at their discretion.

That doesn't mean that such unapproved use of drugs is completely safe. When the Food and Drug Administration has not approved a particular drug for a particular purpose, then it means that the agency is not aware of any side effects when the drug is used for the treatment of that particular purpose. Studies have found that doctors who receive payments from drug companies are more likely to engage in off-label use of pharmaceutical drugs.

The Food and Administration wants drug companies to disclose payments to doctors, and wants to penalize companies that fail to disclose payments. Penalties could be as high as $100,000 in the case of willful and intentional failure to disclose payments. The rule was supposed to go into effect on October 1, 2011. However, implementation was delayed, and Medicare officials are expected to soon issue final rules on these payments.

The Indiana product liability attorneys at Montross Miller Muller Mendelson Kennedy represent persons injured by the use of defective pharmaceutical drugs and other products across Indiana.