Questionable move: Limiting drug makers’ gifts to doctors

Economist Noreena Hertz once said, “We typically focus on anything that agrees with the outcome we want.” And certainly SB 790’s desired outcome – limiting any overprescription of more expensive drugs – seems to be what we – including myself – “want.”

Unfortunately, the strict limits on “gifts” to providers from pharmaceutical manufacturers seems a “solution in search of a problem,” particularly since study evidence defending the bill is tenuous at best.

Only a small minority of 3% to 12% of providers (depending on the drug class) actually received one or more gifts.

Citing a Harvard study, Sen. Mike McGuire (D-Healdsburg), the author of the bill, says, “Massachusetts physicians prescribed a larger proportion of brand-name statins [cholesterol lowering drugs]…the more industry money they received.”

Yet, this is unconvincing, given only a 0.1% increase in prescriptions – one extra prescription for every 1000 written – occurred for every $1,000 in gifts, and only when the analysis included a small fraction of providers receiving from around $10,000 to $500,000 (higher amounts likely to support research). Once limited to the more common range of $2,000 or less, “the association” was deemed “no longer significant” and unreliable.

The UCSF study, he claims, found “doctors who receive industry gifts such as meals, travel, speaking fees and royalties were two to three times more likely to prescribe costly name-brand drugs than equivalent lower priced generic drugs…” is also problematic. Yes, “two to three times” may sound significant.

That is, until it is noted brand-name prescriptions saw only marginal increases on a percentage basis from 0.5% to 2% (antidepressants), 1.5% to 6% (ACE Inhibitors), 2.5% to 16% (beta blockers), and 8% to 16% (statins). Additionally, only a small minority of 3% to 12% of providers (depending on the drug class) actually received one or more gifts, significantly limiting the importance of even these changes.

Furthermore, his assertion generic drugs are “always lower priced” – particularly as it relates to the Medicare Advantage and Part D participants evaluated by both studies – is questionable, given brand-name drugs can actually be cheaper than generics because of negotiated volume discounts possible under these programs.

Therefore, the fact a given provider may have prescribed — or been convinced to change (by a benefits manager) to a “brand name” drug —  could actually have  resulted in a reduction of costs, not simply a provider choice, possibly skewing the results.

More practically, patients have become very savvy of costs, often requiring significant convincing to accept a treatment that has a higher out-of-pocket expense. That alone makes such drugs less likely to be prescribed without a strong reason.

Thus, it is legitimate to question whether the bill will result in meaningful savings compared with the administrative burdens it imposes on manufacturers (whose costs may ultimately raise drug prices).

Having served on the Council on Ethical and Judicial Affairs of the American Medical Association (AMA) when its initial guidelines “Gifts to Physicians from Industry” were developed (now updated), the mere existence of such guidelines suggests a substantial enough gift could have an impact.

However, despite their stated conclusions, the mentioned studies actually seem to indicate this is not enough of a “real world” problem to warrant the bill’s proposed prohibitions.

Far simpler, more effective and less disruptive would be to simply promote the AMA (or similar) guidelines (e.g. meals should be “modest” and “serve a genuine educational function”) and require appropriate boards and agencies to promote the availability of the easily searchable database created under the federal Physician Payments Sunshine Act of 2010.

So, while SB 790’s author is to be applauded for efforts at limiting drug costs, I encourage lawmakers to amend it to empower patient decisions rather than, as an old expression goes, try to kill a gnat with a sledgehammer.
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Ed’s Note: Craig H. Kliger, MD, is executive vice president of the California Academy of Eye Physicians and Surgeons.