Life Science Compliance Update

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February 06, 2017

Discussion on Open Payments by Philadelphia-Region Doctors

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An article in the Philadelphia Business Journal published in early January 2017 focused on Open Payments and payment information available to the public, and how the public availability of the data is affecting doctors and the way they treat patients.

According to the article, Dr. Stanley Schwartz is on a mission to change how physicians treat diabetic patients. The Ardmore endocrinologist, an advocate for reducing the use of insulin in diabetics in favor of other medicine regimens, placed 15th in a ranking of area physicians who received non-research payments from drug companies and medical-device makers.

"To me the Sunshine Act is, you'll excuse the expression, 'a necessary evil' that is meant to reassure people that I approach the care of my patients ethically as I go out and teach physicians across the region, across the country and across the world how to better take care of diabetes," Schwartz said. "It's a necessary evil because there is a worry money may alter my care. What I submit is maybe there are some doctors where that is true, but in my own mind I feel very comfortable telling you that for me, that's not true."

CMS, in its most recent Open Payments report, noted the total payments nationwide fell into three major categories: $2.6 billion for general non-research-related payments, which include speaking fees and food and travel; $3.89 billion for research payments; and $1.03 billion for royalties, licensing fees or ownership or investment interests held by physicians or their immediate family members.

Payments Made to Specialty Physicians

In the article, it was noted that thirteen of the twenty doctors who received the highest payments in the tri-state area were orthopedic surgeons who specialize in knee, shoulder, and spine specialties. Eight of those thirteen are part of the Philadelphia-based Rothman Institute.

Dr. Alexander Vacarro, president of the Rothman Institute, noted, "Rothman Institute is fully committed to the transparency mandated by the Sunshine Act. As national and international leaders in musculoskeletal science, several of our physicians receive compensation for their tireless dedication to basic science and clinical research in an effort to advance the field of orthopedics. Working in conjunction with industry brings this life-saving technology to not only the patients in the communities we serve, but also to people around the world. The physicians of Rothman Institute remain completely transparent in reporting income from these arrangements and will continue to do so."

According to Patricia Audet, chairwoman of the department of pharmaceutical and health care business at the University of Sciences in Philadelphia, "The issue of physician payments is important because it made people aware of payments made to potentially influence doctors. But it doesn't mean all payments are for influencing doctors."

A Doctor’s Perspective

Dr. Schwartz is a member of the speaker bureaus for several pharmaceutical companies, and he spends roughly one-third of his time teaching other doctors about the "disease state" of diabetes and two-thirds of his time discussing specific medicines that he uses as part of the treatment regimen he has developed to treat diabetics. "If there is a drug I don't believe in, I won't speak for it," he said. "I don't speak for everybody who asks. I speak for ones I believe fit into the construct of what I teach."

Schwartz notes that he "get[s] a rush" out of educating others. "When I see people's eyes light up it gives me a good feeling," he said. "The second pleasure I get is I am changing diabetes not just here, but all over the world. One month ago I spoke in Korea, next month I am speaking in Manila. I've been to China four times. … I think it's a responsibility for somebody like me to educate others, even if our process if being funded by pharmaceutical companies, because I am doing it in an ethical way. I can do it throughout the world and help millions of patients."

He makes no apologies for accepting payment from drug companies to instruct physicians. "Every time I speak to 200 doctors, each of those doctors may have 5,000 diabetic patients," he said. "I am affecting the care of [potentially] a million patients. Shouldn't I get reimbursed if I can do it ethically? I know I can do it ethically."

As an aside, with a quick visit to Dr. Schwartz’ website, one can tell he truly appreciates learning and sharing his knowledge with others. His website includes numerous publications, newsletters, and papers authored by the doctor.

Critics Discuss Flaws and Potential Fixes

One of the most vocal critics of the Sunshine Act and open payment database is the American Medical Association, which after the most recent data was released, issued a statement saying, "While we appreciate the efforts of CMS to verify the data submitted by industry, continued data errors and registration challenges during the previous two years have thwarted many physicians from participating in the review and validation process. The integrity goals of the Open Payments database will not be met as long as physician review is obstructed by a registration procedure that is confusing, time consuming, and overly burdensome."

Dr. Sharad Mansukani had one of the highest totals among physicians in the Philadelphia area, $5 million in payments. The payments were primarily dividends from Par Pharmaceuticals. Dr. Mansukani, however, seems to have appeared in the database in error. "I haven't practiced for well over 10 years," he said. "I work for the private equity firm that owned Par prior to its sale, and I was also on Par's board of directors at the time. My compensation had nothing to do with me being a physician. It was [the result] of my personal investment in the company and my role with the private equity firm and the board of directors."

Former University of Pennsylvania bioethicist Arthur Caplan, now a professor of bioethics at New York University's Langone Medical Center, believes the Sunshine Act has had its desired effect - but he advised regulators to pay even closer attention to another vehicle drug companies are using, sometimes improperly, to promote their brands. He stated that the Sunshine Act has “discouraged some of the shenanigans” we used to see in previous decades, such as “cushy dinners and excursions to balmy locations." He noted that in today’s world, medication choices are dictated less by doctors and more by pharmaceutical benefit management firms with lists of preferred medicines for treating specific medical conditions.

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