Today’s blog comes to us courtesy of RxP data-master Ian Reynolds.

Yesterday, just as PhRMA was announcing revisions to strengthen its voluntary Code on Interactions with Health Care Professionals, the Vermont attorney general was putting out a report of his own: Pharmaceutical Marketing Disclosures: Report of Vermont Attorney General William H. Sorrell on Payments to Physicians. The report documents numerous instances in which the industry violated its own voluntary Code through the provision of gifts and payments to Vermont health care providers.

“As this report demonstrates, the Payment Disclosure Law in Vermont provides useful information regarding pharmaceutical manufacturer’s distribution of money within the Vermont medical community to market pharmaceuticals,” said Sorrell.

Some of the more “useful” pieces we found:

• 84 pharmaceutical manufacturers reported spending $3,138,794 in Vermont on fees, travel expenses, and other direct payments to Vermont physicians, hospitals, universities and others for the purpose of marketing their products • a 33% increase over reported expenditures for similar expenses in FY 06 • a 42% increase over reported expenditures for similar expenses in FY 05 • An average value of $1,348 of payments from pharmaceutical companies per recipient • Vermont Secretary of State and the Medical Practice Board currently list 5,154 persons as licensed health care providers, and 2,328 of them received payments over $25 last year from pharmaceutical companies

Who is getting all these payments? The top 100 recipients received a total of $2,127,325 in FY 07, or 68% of the total payments. And these top 100 payment recipients were spread out over 25 different areas of medical specialty (self reported), although we’re not sure we could have named all those specialties before reading the report.  We are sure that while pharma may be spending the big bucks on promoting certain drugs, they are still managing to make it into the offices of every kind of provider, from gastroenterologists and family practice types to physician assistants and nurse practitioners.

What are they paying for? Are Vermonters really a bunch of depressed diabetics with serious concentration issues whose doctors have no idea how to treat them? We doubt it. But here comes pharma to the rescue! Five of the ten most heavily promoted products were mental health drugs, two for ADHD and three for depression.  Two more of the top ten are for treating diabetes.

“Cash or check” payments have been going up as a percentage of overall payments, while the percentage of “food” payments has remained relatively steady.  Speakers fees (52% of the $3,138,794 total) went up as a proportion of overall payments as well.  Speakers fees are basically payments for physicians to give “educational” talks.  Dr. Carlat’s piece, ‘Dr. Drug Rep’ in the New York Times Magazine, details the practice well and explains how he used to get $500-$750 for a one-hour “lunch and learn” promoting Effexor to his fellow psychiatrists.  That’s a lot of coin.

Playing the game Pharma got tricky and Vermont got tough.  Individual payment information from Vermont may not be publicly disclosed if the manufacturer specifies that it is a trade secret.  As one might expect, companies had been declaring more and more of their payments trade secrets every year since the law was put on the books.  The Vermont attorney general probably suspected that the pharmaceuticals sales business hadn’t changed so much each year since 2002 that more payments should constitute trade secrets, so they took action.  For the 2007 reports, they required that companies specify exactly which information about the payment makes it a trade secret.  Turns out all those payments weren’t so top secret after all: There was a 22% decline in trade secret declaration for 2007.

What to do It’s clear that pharma’s marketing model is changing.  The catered office lunches seem to be here to stay, but physicians are being paid to “educate” each other more through speakers bureaus than ever.  The fact that the top 100 recipients received an average of $56,944.00 is significant.  These doctors are seriously supplementing their incomes with drug company money.  It would be nice to have full public disclosure via a website like Minnesota does to see what services exactly these top 100 doctors are providing.  Are they doing 100 lunch and learns per year? Research for those drug companies? what?

It’s no surprise that PhRMA’s freshly revised Code does not address the fastest growing types of payments to physicians—speaking and consulting fees—or in-office meals.  With this in mind, it is imperative that states considering gifts legislation remember that banning the small items like pens is important, but full public disclosure of other payments is also critical.

Is your physician in the top 100?