"Obama-care" Exposes Big Pharma's Dollars to Doctors

By Walter Armstrong 01/16/12

Obama'a new healthcare bill casts new light on a shadowy subject: Big Pharma's longtime practice of paying millions in bribes to physicians. 

Two-thirds of US doctors take pharma handouts. photo via

President Obama's hard-fought Health Care plan will almost certainly go down as a defining accomplishments of his firs term, but unfortunately for the president, it's not very popular on Main Street. According to a CNN poll only 43% of Americans approved of the legislation, which will bring health insurance to millions of now uncovered Americans. Not surprisingly, Republican presidential candidates never miss an opportunity to slam "Obamacare" bill as yet another liberal money-pit—a symptom of bloated, bureaucratic Big Government. But in fact, the legislation contains a number of important reforms aimed at reducing the waste, fraud and abuse that are rife in America’s supply-side healthcare industry, which may explain the opposition to it by medical and insurance big-wigs.

Some of the most important reforms made possible by the new law are focused on transparency. A new requirement, for example, will now force the nation's top pharmaceutical companies to disclose every single payment they make to physicians, as reported Monday by The New York Times. Whether the largesse is a sales rep’s springing for lunch at a doctor’s office or the hundreds of thousands of dollars top specialists rack up in annual speaking feews, and other vague consulting fees for new medications, every penny will have to be accounted for on a public registry that anyone, including consumers, can access.

Drug company marketing to doctors has grown astronomically over the past two decades. An estimated 25% of all US physicians are on pharma payrolls—some take money from several pharmaceutical firms at a time. As many as 65% take freebies from visiting reps. Few physicians admit that their practice of medicine is in any way influenced by such promotional pocketing. Yet paralleling the explosion in payouts has been an exorbitant rise in the volume of medications prescribed (not to mention surgical procedures, which are far more expensive) but of off-label prescriptions.

The epidemic of addiction to prescription painkillers—OxyContin, Vicodin, Fentanyl and other legal narcotics maintain their blockbuster status through their vast off-label sales—is merely one of the costs of this shadowy professional collusion. The tally of annual waste, fraud and abuse traceable to pharma-physician funny money is hundreds of billions of dollars.

Some drug companies already voluntarily disclose on a government registry, often as a condition of the billion-dollar settlements they agreed to following fraud convictions.

The Republican presidential candidates have all vowed that if elected, they will, “on day one,” rescind the Affordable Care Act. Doing so would spell an end to the bill’s core commitment to consumer-friendly transparency. Given the uncertainty of the outcome of the general election, that may be why the Obama administration missed its October deadline to present procedures for registry disclosures. (Check ProPublica's "Dollars for Docs" prize-winning investigation for the registry of pharma payouts.)

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Walter Armstrong is the Medical Editor at  Saatchi & Saatchi Wellness and the former deputy editor of The Fix. You can find him on Linkedin.