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Hearing Kicks Off Oversight of $19 Billion Worth of Gifts, Freebies Given Annually

WASHINGTON - Today Senate Special Committee on Aging Chairman Herb Kohl (D-WI) held a hearing to examine the pharmaceutical industry's costly practice of providing payments and gifts to doctors, and to consider what kind of influence this wields over some of our nation's physicians. It is estimated that drug companies spend $19 billion annually on doctors in the form of lecture honoraria and conference registration fees, research grants, trips, meals, drug samples, and other freebies.  A study published in the New England Journal of Medicine earlier this year reported that 94 percent of physicians have received such gifts and payments from drug companies.
"The financial ties between doctors and drug companies are only deepening," said Chairman Kohl. "These gifts and payments can compromise physicians' medical judgment by putting their financial interest ahead of the welfare of their patients."
The pharmaceutical industry remains one of the most profitable industries in the world, returning more than 15 percent on investments. At the same time, Americans pay the highest drug prices in the world, forcing some employers to drop health coverage for employees, squeezing the budgets of state and federal government, and ultimately harming senior citizens by putting drug costs out of their reach. 
Chairman Kohl declared in his opening statement that he will continue oversight of the relationship between doctors and the drug industry. "While there are voluntary guidelines already in place, it is clear they are not being followed.  I intend to vigorously pursue stronger adherence to these guidelines, as well as propose a national registry to require disclosure of payments and gifts.  We need transparency, at the minimum and at the outset.  Many of these gifts are not illegal, but we need them disclosed.  These interactions involving things of value between the pharmaceutical industry and doctors must be made public."
Dr. Jerome Kassirer, a professor at Tufts University School of Medicine and author of On the Take: How Medicine's Complicity with Big Business Can Endanger Your Health, provided an overview during his testimony of the various financial incentives pharmaceutical companies use to influence the prescribing patterns of physicians. Dr. Greg Rosenthal, a retinal eye specialist from Toledo, Ohio, reported to the committee on the influence-peddling he has witnessed firsthand within his specialty, and how the increasing prevalence of these conflicts of interest led him to become a founding member of Physicians for Clinical Responsibility.
Dr. Peter Lurie, Deputy Director of Public Citizen's Health Research Group, offered the results of a study he coauthored for the Journal of the American Medical Association examining state disclosure laws of drug industry payments to physicians. Lurie also gave his opinion on the creation of a national registry for the disclosure of all gifts and payments from the drug industry to doctors. Maine State Rep. Sharon Treat, Executive Director of the National Legislative Association on Prescription Drug Prices, discussed efforts made by states to limit the influence of pharmaceutical companies. In addition, Treat discussed the American Medical Association's (AMA) practice of collecting and selling information about which drugs doctors are prescribing to their patients.
Representatives from both the AMA and Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry's trade organization, offered testimony during the second panel about their self-imposed voluntary guidelines on both accepting and giving gifts, and whether they believe there has been a positive change in this practice since the guidelines were written in 2002. Dr. Robert Sade, Chair of AMA's Council on Ethical and Judicial Affairs, testified on behalf of the AMA, while Marjorie Powell, Senior Assistant General Counsel, testified on behalf of PhRMA.

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