No Easy Solution for Lack of Transparency in the Practice of Medicine

Dr. Helfgott, MD

Consider this scenario: A research paper is written by two highly respected academics; one is a professor of law and economics at a prestigious university and the other is the dean of the business school at another major university. Entitled, “Competition in the Mutual Fund Industry: Evidence and Implications for Policy,” the paper lays out a strong defense of the mutual fund industry’s position on the pricing of fees for their services.¹ Critics were accusing some mutual fund managers of gouging clients by charging them excessive fees. The professors countered that it would be impossible for fund managers to overcharge clients because their field was so highly competitive. After all, fund investors may, “fire advisers at any time by redeeming shares and switching into other investments.” The 36,000-word paper is elegantly written and provides a strong analytical argument in support of their conclusions. Buried in the fine print of the acknowledgments section, the authors thank many of their colleagues for their helpful comments, conversations, and data analysis. They casually acknowledge the Investment Company Institute (ICI), ICI Mutual, and the John M. Olin Center for Law, Economics, and Business at Harvard Law School for “providing financial assistance.” One of the authors is listed as having testified as an expert witness for a mutual-fund advisory company.

Though this paper is replete with a dizzying array of data, statistical analyses, and high-level calculus, there are no clues that hint at the degree of support they received from the mutual-fund industry. According to an article in the New York Times, the lead author, John C. Coates, IV, professor of law and economics at Harvard Law School in Cambridge, Mass., did not receive any financial support for his work.² He stated that, as a matter of personal policy, he did not accept money in such circumstances for academic work. In contrast, the second author, R. Glenn Hubbard, dean and Russell L. Carson professor of finance and economics at the Graduate School of Business of Columbia University in New York City, appeared to have no qualms about accepting a $150,000 honorarium from the mutual-fund industry. In response to an e-mail request from the Times reporter seeking clarification for the size of this payment, Hubbard replied: “Any work of scholarship rises or falls on its ideas, empirical support, and argument. Readers can then make whatever judgment they wish.”

The Times They Are a-Changing

Unfortunately for Professor Hubbard, his views on conflicts of interest (COIs) and transparency are woefully out of date. There is mounting concern that many academic and research activities lack transparency. In other words, there are too many “unknown unknowns.” Though changes in the rules and regulations pertaining to the management of conflicts have been moving at a glacial pace at some elite American business and law schools, this has not been the case for most medical schools and academic medical centers, where the need for more transparency has taken on a critical sense of urgency.

Over the past several years, there have been several well-publicized episodes highlighting the apparent lack of disclosure of COIs in medicine. Many of these disturbing affairs have come to light due to the efforts of Senator Charles E. Grassley of Iowa. As the ranking Republican member of the U.S. Senate Judiciary Committee, he has led dozens of Congressional probes into undisclosed relationships between academic medical centers (AMCs) and physicians on the one hand and pharmaceutical and device companies on the other. He has been the driving force behind the passage of the Physician Payments Sunshine Act (PPSA). For our foreign readers, please note this act is not a meteorological decree that the sun should shine whenever doctors are paid! It refers to sunshine being the best antiseptic, a quote attributed to former U.S. Supreme Court Justice Louis D. Brandeis. The Sunshine Act requires all drug and device manufacturers to disclose payments to physicians and teaching hospitals that exceed $100 annually. It also assigns the Center for Program Integrity, the antifraud division of the U.S. Department of Health and Human Services (HHS), to establish a searchable website that makes the information publicly available. The Sunshine Act was supposed to have been implemented by now, but enforcement has been delayed due to a lack of consensus about some key definitions of what constitutes a payment. More about that later.

Show Me The Money

Let’s first examine some of the opaque financial arrangements between doctors and sponsors that first attracted Sen. Grassley’s attention. In 2008, the Senate Judiciary staff identified eight psychiatrists at five major academic centers who had significantly under-reported to their universities and medical centers, their actual earnings from the pharmaceutical industry.³ For example, the chairman of psychiatry at one major academic university had filed a COI form with his university stating that the value of the shares he owned in a company that was conducting a drug trial based at the university was “greater than $100,000.” Technically, he was telling the truth, since that income level was the highest listed option available. The reality was starkly different. His shares of the company were determined to be worth $6,000,000. The chairman of psychiatry at another major university was found to have received, but failed to report, payments from one drug company totaling at least $500,000 over 4 years. Throughout this time, he was the principal investigator of a National Institutes of Health (NIH)–sponsored clinical trial studying the efficacy of this company’s drug for the treatment of depression. Yet he failed to disclose these payments to the NIH.

Unfortunately, there were many other egregious examples of undisclosed financial interests being brought to light by the Senate Judiciary Committee staff. Foremost among these has been the relationship between spine surgeons and their use of recombinant human bone morphogenic protein-2 (rhBMP-2) in spinal fusion surgery. Whether surgeons should use autologous bone grafts or rhBMP-2 to fuse the implanted spinal hardware has led to a controversial and costly debate.

A recent review of this topic in The Spine Journal observed that all of the original 13 industry-sponsored studies investigating the role of rhBMP-2 in spine surgery were remarkable for the complete absence of any reported clinical adverse events.⁴ This astonishing assertion quickly unraveled following the publication of reports by unaffiliated authors who began highlighting some rather serious adverse reactions, including bone osteolysis, neurological injury resulting in retrograde ejaculation, and dural laceration. Perhaps this is the most amazing observation: For all published studies reporting on more than 20 patients receiving rhBMP-2, one or more authors were found to have financial associations with the sponsor valued at more than $1,000,000. For all studies reporting on more than 100 patients, one or more authors were found to have financial associations with the sponsor valued at more than $10,000,000. Yes, you counted correctly. There are seven zeros in that number! Again, none of this information was disclosed at the time of publication of any of these studies. My colleague Aaron Kesselheim, MD, JD, MPH, assistant professor of medicine at Harvard Medical School in Boston, found that only one in seven authors identified in whistleblower complaints as being involved in off-label marketing activities adequately disclosed their conflict of interest in subsequent journal publications.⁵

Bias Bias

According to some behavioral economists, when people have a stake in an issue, they tend to process information in a selective fashion that supports their personal interests, a phenomenon known as motivated reasoning. While most people are ready to accept the possibility of bias in others, few are ready to acknowledge that they themselves might be biased, a phenomenon that has been coined as the “bias bias.” Zach Sharek and colleagues at the Carnegie Mellon University in Pittsburgh, devised a clever experiment to ascertain the level of bias pertaining to COI in physicians and financial planners.⁶ Half of each group read a set of proposed rules to minimize conflicts for doctors; the other half were asked to review synonymously worded rules to reduce conflicts for financial planners. The authors observed that doctors were concerned that financial advisers might accept free meals or educational junkets from investment companies, yet they rejected the notion that accepting similar gifts from drug companies could ever compromise their own integrity. Similarly, the financial planners wanted doctors to be barred from accepting gifts from pharmaceutical companies, lest their objectivity be compromised—but thought the same restrictions in their own profession would be unnecessary and onerous. In fact, financial planners were more hostile than doctors to the admission of any potential conflicts of interest on their part.

Show Me the Data

In 2009, Massachusetts enacted a gift-ban law that closely resembles the soon-to-be-enacted Sunshine Act. The law banned all industry gifts to physicians, such as sponsored meals and social activities that occurred outside of the hospital or office setting. It also created a public, searchable website that listed all payments (such as consulting work) made to any physician holding a Massachusetts license, including those doctors who live and work out of state. Proponents of this law asserted that it would help protect consumers against spiraling healthcare costs; in particular, rising prescription prices. This opinion is widely held, but is it true? The law was based on the premise that transparency in these transactions is of public importance and that disclosure acts as a deterrent against quid-pro-quo exchanges; physicians may be reluctant to accept large payments if these payments are publicly known and perceived as compensation for prescribing certain therapies. Researchers from Harvard University attempted to validate this finding. To predict deterrence effects of the federal Sunshine Act, the authors studied the experience of two states, Maine and West Virginia, that previously implemented sunshine laws. They examined the effect of these laws on the prescribing of statins and selective serotonin reuptake inhibitors (SSRIs), two therapeutic classes in which marketing plays an important role because the therapies within each class are pharmacologically and clinically highly substitutable.⁷ They hypothesized that, to the degree that physicians were influenced by industry payments to overprescribe branded therapies—and disclosure deterred physicians from accepting these payments—disclosure laws would lead physicians to decrease prescribing of branded statins and SSRIs. Whereas the percentage of branded statins declined by 45.3% in the nondisclosure state of Rhode Island during this period, the decline in branded prescriptions in the disclosure state of Maine was 50.6%. Overall, there were negligible to small effects of the disclosure laws in Maine and West Virginia for both statins and SSRIs. The authors conclude that the Sunshine Act may have a limited effect on prescribing and on expenditures. The authors may have been naive in their initial assumptions. Since branded prescription products usually require prior authorization, and generic drugs often have lower copayment costs, they underestimated the impact that these restrictions already impose on the sale of branded drugs. The Massachusetts legislators acknowledged this reality in July 2012 when they voted to partially lift the state gift-ban law.⁸

The Weather Forecast

The Sunshine Act becomes law on January 1, 2013. It will likely provide a windfall for accountants and healthcare attorneys. An aggregate yearly total of $100 worth of payments or gifts will trigger the inclusion of a doctor’s name onto the public website. Thus, all gifts, no matter how small (such as bagels with cream cheese) will have to be tallied by each healthcare company so that, by year’s end, a determination could be made as to whether the $100 threshold was met. Speaking of bagels, I have not found an answer to the vexing question of how to allocate the cost of one dozen bagels to a group of n doctors, where n=a number that is not a factor of 12. Seriously, these are some of the issues that have kept healthcare attorneys awake at night!

The amount of data that will be generated by the act will be enormous. Consider the fact that there are more than 650,000 practicing physicians. Given the low threshold for reporting, physicians receiving $101 and those who are paid $100,000 will be listed. We may end up with thousands of pages of data, the sheer volume of which will make it challenging for visitors to the website to parse the numbers. The outcome might resemble what we see in other instances of disclosure. Have you ever fully read the paperwork explaining your rights as a credit card holder, or as the owner of a home mortgage? Disclosure does not always lead to clarity.

Before you feel too bad about the impact of the Sunshine Act on your lives, consider our friends and colleagues who work at the NIH. The Stop Trading On Congressional Knowledge (STOCK) Act was recently enacted. It was intended to prevent insider trading by members of Congress, but it casts a wide net, covering 28,000 senior staff members in the executive branch, including about 600 employees of the NIH. Though they are already held to stringent limits on owning drug company stocks, they must now list all personal (and spousal) financial transactions, not just those related to healthcare industries, within 45 days. All this data will be available (you guessed it) on a publicly available website.

So what’s the weather going to be like in 2013? With all this anticipated sunshine, you might want to pack sunglasses and suntan lotion. But I would throw in an umbrella. And a raincoat. Just to be sure.

Dr. Helfgott is physician editor of The Rheumatologist and associate professor of medicine in the division of rheumatology, immunology, and allergy at Harvard Medical School in Boston.

References

1. Coates JC, Hubbard RG. Competition in the mutual fund industry: Evidence and implications for policy. J Corporation Law. 2007;33:151-222.
2. Segal D. Romney’s go-to economist. New York Times. October 14, 2012, p. BU1.
3. Chimonas S, Stahl F, Rothman DJ. Exposing conflict of interest in psychiatry: Does transparency matter? Int J Law Psychiatry. 2012. pii: S0160-2527(12)00072-6.
4. Carragee EJ, Hurwitz EL, Weiner BK. A critical review of recombinant human bone morphogenetic protein-2 trials in spinal surgery: Emerging safety concerns and lessons learned. Spine J. 2011;11:471-491.
5. Kesselheim AS, Wang B, Studdert DM, Avorn J. Conflict of interest reporting by authors involved in promotion of off-label drug use: An analysis of journal disclosures. PLoS Med. 2012;9:e1001280.
6. Sharek Z, Schoen RE, Loewenstein G. Bias in the evaluation of conflict of interest policies. J Law Med Ethics. 2012;40:368-382.
7. Pham-Kanter G, Alexander K. Effect of physician payment disclosure laws on prescribing. Arch Intern Med. 2012;172:819-821.
8. MassPirg urges governor to veto changes to prescription drug gift ban. Published July 5, 2012. Available at www.masspirg.org/news/map/masspirg-urges-governor-veto-changes-prescription-drug-gift-ban. Accessed November 16, 2012.