New rules force drug companies to disclose cash payments, gifts to doctors

Drug companies will be required to reveal the payments they make to doctors for research, consulting, speaking, travel, and entertainment as part of the Obama administration's new health-care law.

The New York Times reported Tuesday that about a quarter of doctors take cash payments from pharmaceutical and device companies, while nearly two-thirds accept gifts of food, including dinners.

The Times has found that doctors who take money from drug makers often practice medicine differently from those who do not and that they are more willing to prescribe drugs in risky and unapproved ways, such as prescribing powerful antipsychotic medicines for children. 

Any payment over $10 must be reported, even if the company delivers a batch of bagels for a morning staff meeting worth $25, according to the paper.

The disclosures meant doctors would more likely make decisions in the best interests of patients, without regard to their own financial interests, the Economic Times cited officials as saying.

Research has also reportedly found that such payments — which sometimes reach into the millions of dollars — can encourage doctors to recommend more expensive drugs and devices, driving up health care costs.

Under the new requirements, which go into effect sometime after Feb. 17, if a company has any product covered by Medicare or Medicaid, it will have to disclose all payments made to doctors other than its own employees, the Times reported.

The disclosures will be posted on a publicly accessible website.

Companies face a penalty up to $10,000 for each payment they fail to report, and a company that knowingly fails to report payments will be subject to a penalty up to $100,000 for each violation, up to a total of $1 million a year. 

The Boston Globe, meantime, reported that some pharmaceutical companies already report payments to health care providers.

A 2010 report by the paper in partnership with ProPublica found that much of the drug company money distributed to doctors in Massachusetts was going to physicians affiliated with Harvard University.

Last year, after Harvard Medical School adopted new rules, the reports showed many doctors stopped accepting such payments. 

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