U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

39–865 PDF 2008

S. HRG. 110–253

PAID TO PRESCRIBE?

EXPLORING THE RELATIONSHIP BETWEEN

DOCTORS AND THE DRUG INDUSTRY

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

WASHINGTON, DC

JUNE 27, 2007

Serial No. 110–10

Printed for the use of the Special Committee on Aging

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

SPECIAL COMMITTEE ON AGING 

HERB KOHL, Wisconsin, Chairman 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

BILL NELSON, Florida 

HILLARY RODHAM CLINTON, New York 

KEN SALAZAR, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

CLAIRE McCASKILL, Missouri 

SHELDON WHITEHOUSE, Rhode Island 

GORDON H. SMITH, Oregon 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

MEL MARTINEZ, Florida 

LARRY E. CRAIG, Idaho 

ELIZABETH DOLE, North Carolina 

NORM COLEMAN, Minnesota 

DAVID VITTER, Louisiana 

BOB CORKER, Tennessee 

ARLEN SPECTER, Pennsylvania 

DEBRA WHITMAN, Staff Director 

CATHERINE FINLEY, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Herb Kohl ............................................................. 1

PANEL I 

Jerome Kassirer, M.D., distinguished professor, Tufts University School of 

Medicine, Boston, MA .......................................................................................... 3

Greg Rosenthal, M.D., retinal specialist, Toledo, OH ........................................... 12

Peter Lurie, M.D., MPH, deputy director of Public Citizen’s Health Research 

Group, Washington, DC ....................................................................................... 19

Sharon Treat, state representative, executive director, National Legislative 

Association on Prescription Drug Prices, Hallowel, ME ................................... 30

PANEL II 

Robert Sade, chair, Council on Ethical and Judicial Affairs, American Medical 

Association, Washington, DC .............................................................................. 52

Marjorie Powell, Esq., senior assistant general counsel, Pharmaceutical 

Research and Manufacturers of America, Washington, DC ............................. 61

APPENDIX 

Dr. Kassirer’s Responses to Senator Kohl’s Questions ......................................... 87

Dr. Rosenthal’s Responses to Senator Kohl’s Questions ...................................... 89

Peter Lurie’s Responses to Senator Kohl’s Questions .......................................... 127

Rep. Sharon Treat’s Responses to Senator Kohl’s Questions ............................... 128 

Marjorie Powell’s Responses to Senator Kohl’s Questions ................................... 133

Statement from the American College of Physicians ............................................ 142

Testimony of Anthony Fleg, American Medical Student Association .................. 146

Statement of Lewis Morris, Chief Counsel to the Inspector General, Office 

of the Inspector General, U.S. Department of Health and Human Services .. 168

Testimony submitted by the National Physicians Alliance .................................. 175

(III) 

(1)

PAID TO PRESCRIBE? EXPLORING THE RELATIONSHIP BETWEEN DOCTORS AND THE 

DRUG INDUSTRY 

WEDNESDAY, JUNE 27, 2007 

U.S. SENATE, 

SPECIAL COMMITTEE ON AGING, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:39 a.m., in room 

SD–106, Dirksen Senate Office Building, Hon. Herb Kohl (chairman of the committee) presiding. 

Present: Senators Kohl, Carper, and McCaskill. 

OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN 

The CHAIRMAN. Hello to one and all, and we will call this hearing 

to order at this time. 

Today, we look forward to examining the financial relationship 

between the pharmaceutical industry and physicians. Interactions 

between doctors and drug manufacturer representatives often involve payments that can actually take the form of cash and gifts, 

such as meals, travel to conferences, or textbooks. 

Unlike other professions, physicians are allowed to take payments from companies whose products they may choose to prescribe to their patients. Recent studies show that the more doctors 

interact with drug marketers, even through small gifts and modest 

meals, the more likely doctors are to prescribe the expensive new 

drugs that are being marketed to them when a more affordable generic would do just as well. 

Seniors lose out with unnecessarily high drug costs while doctors 

and drug manufacturers benefit financially. The rising drug prices 

don’t only harm the elderly. They hurt us all, as they undermine 

our private and public health systems. 

Health insurance premiums continue to skyrocket, and escalating 

drug costs have played a large role. The Federal Government, now 

the largest payer of prescription drugs with the new Medicare drug 

benefit, feels the squeeze as well, and considerably. 

Even more alarming, these gifts and payments can compromise 

physicians’ medical judgment by putting their financial interest 

ahead of the welfare of their patients. Over the last several years, 

there have been attempts by the Federal Government, medical organizations, and drug companies to curb the excessive gifts and 

payments to physicians. 

Unfortunately, as we will hear from some of our witnesses today, 

financial ties between doctors and drug companies are only deepVerDate 0ct 09 2002 14:43 Jan 24, 2008 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\DOCS\39865.TXT SAGING1 PsN: JOYCE
2

ening. In fact, a study published in the New England Journal of 

Medicine earlier this year reported that 94 percent of physicians 

have received food and beverages, medication samples, and other 

gifts, as well as payments for trips, from drug companies. 

The pharmaceutical industry remains one of the most profitable 

industries in the world, returning more than 15 percent on their 

investments, which is extraordinary. As a businessman myself, I 

fully respect an industry’s right to maximize profits. 

Nevertheless, I believe they are charging Americans—and it is a 

fact—the highest drug prices in the world, forcing some employers 

to drop health coverage for their employees, squeezing budgets of 

State and Federal Governments and, ultimately, harming our seniors by putting drug costs out of their reach. It has been estimated that the drug industry spends $19 billion 

annually on marketing to physicians in the form of gifts, lunches, 

drug samples, and sponsorship of education programs. Companies 

certainly have the right to spend as much as they choose to promote their products, but as the largest payer of prescription drug 

costs, the Federal Government has an obligation to examine and 

take action when companies unfairly or illegally attempt to manipulate the market. 

Today’s witnesses will discuss the current state of the physiciandrug industry relationship, recent attempts at the state level to increase disclosure of payments, and attempts to reduce the influence 

of the drug industry on physicians’ prescribing behaviors. We will 

also hear testimony from one doctor who feels that these potential 

conflicts of interest have reached a disturbing level in his profession and is adversely affecting medical research. 

Our second panel will include representatives of the pharmaceutical industry and the medical profession, and they will provide 

us insight into their voluntary guidelines addressing physician gifts 

and payments. We look forward to hearing from each of our witnesses in terms of their perspectives on this issue and their recommendations. 

Obviously, we take this issue very seriously, and we will continue 

oversight of the relationship between doctors and the drug industry. While there are voluntary guidelines already in place, to us it 

seems clear that they are not being sufficiently followed. We intend 

to vigorously pursue stronger adherence to these guidelines, as well 

as to propose a national registry to require disclosure of payments 

and gifts. 

I believe we need transparency at the minimum and at the outset. Many of these gifts are not illegal, but we need them disclosed. 

These interactions involving things of value between the pharmaceutical industry and doctors, in our judgment, need to be made 

public. 

So we thank you all for being here today. 

At this point, I will introduce our first panel. 

Our very first witness today will be Dr. Jerome Kassirer, who is 

a distinguished professor of medicine at Tufts University. Dr. 

Kassirer has published numerous original research and clinical 

studies regarding quality health care, and he served as the editorin-chief of the New England Journal of Medicine from 1991 to 

1999. 

3

After that, we will hear from Dr. Greg Rosenthal, the chief of 

ophthalmology at Toledo Hospital and Toledo Children’s Hospital 

and the director of retina care at Vision Associates in Toledo. He 

has extensive training in all diseases and surgery of the retina, and 

he serves on several national committees with respect to eye 

health. 

Our third witness today will be Dr. Peter Lurie, who is the deputy director of Public Citizen’s Health Research Group, a consumer 

advocacy group here in Washington, DC. Dr. Lurie has worked on 

a myriad of issues related to pharmaceutical policy, including the 

cost and safety of prescription drugs. 

Our fourth witness on the first panel will be State Representative Sharon Treat. She is a member of the Maine legislature, where 

she has served for nearly 15 years, including two as Senate majority leader. Representative Treat is also executive director of the 

National Legislative Association on Prescription Drug Prices. 

So we welcome all of you here today, and we look forward to your 

testimony. 

Dr. Kassirer, we will start with you. 

STATEMENT OF JEROME KASSIRER, M.D., DISTINGUISHED 

PROFESSOR, TUFTS UNIVERSITY SCHOOL OF MEDICINE, 

BOSTON, MA 

Dr. KASSIRER. Thank you, Mr. Chairman. 

As you heard, I am Jerome P. Kassirer. I am a distinguished professor at Tufts University School of Medicine in Boston and visiting 

professor at Stanford University. I am a former editor-in-chief of 

the New England Journal of Medicine and author of the Oxford 

University Press book, ‘‘On the Take: How Medicine’s Complicity 

with Big Business Can Endanger Your Health.’’ I represent no institution and no medical professional organization. 

I have been asked to provide a brief overview—actually, you did 

it pretty well already—of the complex intertwining of the medical 

profession and the pharmaceutical, biotechnology, and device industries and the consequences of these relationships. 

I will assert that the medical profession has become excessively 

dependent on the largest of industry, that these financial connections have a negative influence on the quality and cost of patient 

care and the trust of the public, and that the profession’s response 

to these threats has been inadequate. 

American doctors train for many years, and many accumulate 

substantial debt to become physicians. They then work long hours, 

struggling in a complex health care delivery system to reduce the 

burden of illness. 

There is no other country where I would prefer to get care for 

my family or myself. Our physicians, hospitals, medical centers, 

and medical professional organizations are respected around the 

world. 

In the same vein, the pharmaceutical, biotech, and device industries have revolutionized clinical practice by developing, often with 

the help of academic physicians, new diagnostic tools, prostheses 

that improve day-to-day living, and life-saving medications. 

The companies are also a vigorous engine that accounts, in part, 

for our country’s phenomenal economic growth. But these compaVerDate 0ct 09 2002 14:43 Jan 24, 2008 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 H:\DOCS\39865.TXT SAGING1 PsN: JOYCE
4

nies require big profits, and, to do so, they mount massive marketing campaigns, much of it directed at doctors. Doctors are 

human and, like the rest of us, they respond to financial incentives. 

I need not remind any of you what a struggle it has been to 

eliminate physician self-referral of patients to their personally 

owned health care facilities. But the extent of self-referral pales 

compared with the enormous financial incentives generated by 

these industries. 

The magnitude of drug promotion astonishes, as 100,000 drug 

reps visit doctors, residents, nurses, and medical students every 

day and ply them with free gifts, meals, and gadgets. Medical 

meetings are mini-circuses, replete with enormous glittering displays and hovering attractive personnel. Although couched as education, these marketing efforts are thinly disguised bribes. 

Just as surprising is the magnitude of physician involvement 

with industry. As you pointed out a few minutes ago, among a random sample of doctors reported just weeks ago in the New England 

Journal of Medicine, more than three-quarters had taken free samples, free food, and free tickets to sporting events from industry; 

more than one-third accepted free continuing medical education; 

and another third had received payments for speaking or consulting for the companies or enrolling patients in clinical trials. 

Some have estimated the industry’s total advertising bill at $70 

billion. There is nothing fundamentally wrong with advertising 

products, but when financial incentives yield inappropriate or dangerous care, when they inordinately raise the cost of care, when 

they risk patients’ lives in clinical trials, and when they damage 

the profession, they have gone too far. 

We need not look back very far. Only 2 weeks ago, the New York 

Times reported that drugs were being selected for cancer patients 

depending on the profit they would achieve for a medical practice. 

The same week, we read a study that showed that sponsorship of 

controlled trials of statins was closely correlated with positive results of such trials. 

Three weeks ago, we learned that payments for enrolling patients in clinical trials were leading to shabby research practices by 

unqualified researchers. This spring, we learned that physicians 

with financial ties to the company that makes Epogen were inappropriately represented on a National Kidney Foundation committee that recommended potentially dangerous doses of the drug. 

These recent revelations are just a continuation of reports over 

the past 10 years or so. Dozens more are detailed in my book. 

Financial payments have swayed professional medical organizations to make inappropriate clinical recommendations. They have 

influenced industry-paid speakers to recommend risky drugs. They 

have biased FDA panels and yielded inappropriate behavior by 

NIH scientists. 

Free drug samples encourage doctors to use the newest and most 

expensive drugs, and the samples themselves often get into the 

wrong hands. Drugs such as Natrecor, approved for acute heart 

failure only in the hospital, found widespread use in doctors’ offices, costing taxpayers hundreds of millions of dollars. 

5

What have leaders in the profession done to counter a trend in 

which the profession has become increasingly beholden to industry? 

Not much. 

The American Medical Association and many other physician organizations permit their members to receive gifts and meals and to 

serve on pharmaceutical companies’ speakers bureaus. Most of 

them have no proscription against members’ involvement as consultants to industry for marketing or for the development of educational materials. In fact, most medical society rules are no more 

stringent than those of PhRMA. 

Last year, my colleagues and I recommended conflict-of-interest 

policies for academic medical centers. We proposed that industrypaid gifts and meals be eliminated; that faculty should not join industry speakers bureaus; that all faculty consulting with industry 

be strictly overseen by contract; that drug formulary committees be 

free of conflicted physicians; and that free drug samples be regulated by a voucher system. 

Since then, a number of medical centers, including Stanford, 

Penn, Yale, and U.C.-Davis, have revised their policies along these 

lines, but most of them have picked off the low-hanging fruit, proscribing visits by drug reps and eliminating industry-supported 

meals. None of them has eliminated faculty involvement on speakers bureaus or consultations on marketing issues. 

Doctors are at risk of corruption from the perverse incentives 

from industry. I prefer that the profession police itself, but in the 

3 years since publication of my book, progress in extricating medicine from industry influence has been minimal. 

Newspaper reports and State reporting requirements have not 

been sufficient. I would like to see a Federal registry for reporting 

analogous to those of some States. I would also like to see a congressional mandate to the Institute of Medicine of the National 

Academy of Sciences for studies that mirror those that called attention to medical errors. 

We must put more pressure on both the profession and the industry. In my opinion, both have reneged on their ethical responsibilities for the care of the sick. 

Thank you, Mr. Chairman. 

[The prepared statement of Dr. Kassirer follows:]

6


39865.001
7


39865.002
8


39865.003
9


39865.004
10


39865.005
11


39865.006
12

The CHAIRMAN. Thank you so much for your testimony. 

Mr. Rosenthal. 

STATEMENT OF GREG ROSENTHAL, M.D., RETINAL 

SPECIALIST, TOLEDO, OH 

Dr. ROSENTHAL. Thank you very much. I am Dr. Greg Rosenthal 

[off-mike]—I am having microphone problems. 

Is that better? 

The CHAIRMAN. That is good. 

Dr. ROSENTHAL. OK. I have a number of leadership positions, 

and I am also a co-founder of Physicians for Clinical Responsibility, 

or PCR. 

We are living in an age of pharmaceutical influence, where companies sponsor physicians, medical research, and clinical decisionmaking. Pricing of retinal pharmaceuticals is such that one agent 

could cost CMS as much as the entire eye care budget, so the motivation to control this market is strong. 

Such influence is inappropriate when it serves company interests 

at the expense of patient and societal interests. In the retinal field, 

this is a particular threat to seniors due to the prevalence of 

macular degeneration and diabetic retinopathy common in this 

group. 

There is a schism in the retina community between the majority 

who want to do legitimate research and patient care and a strategically cultivated group of doctors willing to help corporate interests 

in exchange for valuable consideration. 

Drug companies exert control by controlling drug trials and linking them to marketing efforts; nurturing key opinion leaders, or 

KOLs, to influence medical decisionmaking; providing money, travel, and publicity for community doctors when they agree to promote 

certain products; funding professorships and other academic needs 

of those who support company interests; using unrestricted grants 

to influence journals, societies, meetings, and Web sites; controlling 

speakers and presentation of CME courses and materials; and creating bogus expert panels to promote products and treatments. 

Physician opposition to this complicity is growing and summarized in a recent quote from Dr. Jerry Sebag, a leader in our community. He writes, ‘‘It is becoming increasingly obvious to me that 

many speakers on the AMD circuit, the so-called experts, are puppets serving their needs and the companies that pay them. While 

many of us may not be ’key opinion leaders,’ we are ’key care leaders,’ and as such, it is up to us to promote the interests of our patients and society at large.’’ 

The influence of Big Pharm, as we call it, is pervasive. Research 

used to be independently funded and designed, but with the decrease in public funding, drug companies have moved in aggressively. The independent trials have been replaced by corporatesponsored RCTs, or randomized control trials. 

Although bias in such trials has been well-documented, companies have, largely through their KOLs, promoted the idea that only 

sponsored data is valid, and there is growing pressure to ignore 

any non-CSRCT data. Either through financial inducement or fear 

tactics, many physicians are persuaded to comply. There have also 

13

been efforts to block studies and ignore data that might conflict 

with CSRCTs. 

In redefining the RCT, pharmaceutical companies are exerting 

control over what to study, which questions to ask or not ask, IRB 

independence—that is, Institutional Review Board independence—

what to report or not report, and the presentation of the data. Drug 

companies also tightly coordinate their studies with their marketing plans. 

Researchers are recruited, some with conflicts of interest ranging 

from excessive cash to stock options and lab and professorship 

funding. Some of these same doctors are then cultivated as key 

opinion leaders and are further compensated to promote the company’s message. I recently spoke with an M.D. employed by a major 

drug company whose actual title was ‘‘Thought Leader Liaison’’ 

and whose job was to recruit and tend to the KOLs. 

Even good research is tainted by the possibility of bias, and it is 

very difficult to know what and what not to believe. We recently 

declined participating in a study of a promising drug simply because the study was so laden with perks for doctors that participation would have begged unavoidable questions about the credibility 

of our work. 

Drug companies also work at the community level. Doctors whose 

only qualification is that they use a product are recruited and paid 

to do studies or sit on ‘‘expert panels’’ and travel to exotic destinations to discuss, that is, promote products. Invitations to nominal 

scientific advisory boards are made on a similar basis. 

Retina doctors often complain that society meetings have lost 

credibility since almost every speaker is compromised by financial 

relationships. These same meetings serve as little more than preliminaries for after-hours seminars, usually in luxurious hotels 

where doctors can receive CME credits, meals, and often gifts for 

listening to the sponsor’s spin on standard care. 

Societies and medical journals have become dependent on unrestricted grants from numerous pharmaceutical companies. In this 

context, ‘‘unrestricted’’ means, ‘‘Use this for whatever you want, but 

if you ever want another one, don’t displease us.’’ 

As an example, last year, I wrote an op-ed criticizing conflicts of 

interest, and although it was hailed by several retina leaders as 

‘‘right on the mark, very important, and the right thing to do,’’ it 

was proved unpublishable. Several journal editors praised the article but indicated that they could not publish it, due in part to concern about advertisers and the reviewer’s relationships with the 

pharmaceutical companies. 

None of these concerns was put in print. One editor even suggested that I ‘‘shouldn’t take this on.’’ Another time, I was to speak 

on this topic, but 5 minutes before the talk, I was asked to change 

topics because the society had just received a large sponsorship 

check from a drug company. 

Physicians face a difficult choice. One path is to go along. With 

drug company money, you can increase your income, prestige, build 

your practice, or fund a department, research, or professorships. 

The middle ground is to simply look away. 

The hard choice is to fight back. The road back to credibility is 

long. Opposing forces are well-funded and well-motivated. Still, 

14

there are many, many retinal specialists who are disturbed by the 

slide of our profession. The formation of PCR is a first step. 

Current dynamics will continue to permit uncontrolled compromise of the public welfare for personal or corporate gain. The 

system needs to be changed in response to this extreme opportunism. Dr. Kassirer, Dr. Marsha Angell, and others have outlined 

steps that can be taken to restore the independent practice of medicine. 

The majority of physicians desire to practice honest medicine in 

their patients’ and in society’s best interests, and these doctors 

would welcome any changes that would mitigate financial conflicts 

and restore credibility to our research, our education, and our practice of medicine. 

Thank you very much. 

[The prepared statement of Dr. Rosenthal follows:]

15


39865.007
16


39865.008
17


39865.009
18


39865.010
19

The CHAIRMAN. Thank you, Dr. Rosenthal. 

Dr. Lurie. 

STATEMENT OF PETER LURIE, M.D., MPH, DEPUTY DIRECTOR 

OF PUBLIC CITIZEN’S HEALTH RESEARCH GROUP, 

WASHINGTON, DC 

Dr. LURIE. Good morning, Senator. Thank you for inviting me to 

speak. 

I have brought along the people who helped me prepare this testimony, who are able to take any more detailed questions you 

might have. 

I am here to talk about the State laws that require disclosure of 

gifts from drug companies to doctors, and let me start with my conclusion. 

What we really need is a national law. We have a minority of 

States that have laws, and as I will show, those laws are riddled 

with holes and poor enforcement. So I think your idea and that of 

Senator Grassley to move forward with a national reporting law is 

spot-on. 

The laws are on the ascendancy. The Minnesota statute dates 

from 1993, but nobody took any further action on this until 2001. 

But since then, we have seen three States and D.C. that have enacted similar laws. Eleven States thought about imposing them in 

2006, but none of them, to our knowledge, became law. The drug industry estimates that it spent $25.3 billion in 2003 

on marketing. The doctors think that they are exempt from this. 

They think they are unaffected by such interactions. But it seems 

unlikely that pharmaceutical companies would be catering to the 

culinary and travel preferences of doctors if they didn’t think that 

they were getting some bang for the buck. 

The evidence, as reviewed by Dr. Kassirer in his written testimony, strongly suggests that the drug companies are right. There 

are multiple studies showing an impact upon changes in prescribing of doctors, upon their early adoption of new medications 

which themselves might be hazardous, and changes in formularies, 

all of them the result of interactions with drug representatives, 

with all-expenses-paid travel to various exotic locations and the 

like. 

The companies, therefore, have a clear conflict of interest, and 

yet we have surrendered the marketplace to them by allowing 

them to influence physicians. The result can be prescribing that is 

based on marketing instead of on science. Patients are the victims 

of all this. 

The physician disclosure laws are just one of many ways that we 

might go about trying to limit the damage of this marketing, and 

we have already seen the benefits of these laws. We published our 

article in the JAMA back in March, and in Minnesota, there have 

been already at least four positive results: firstly, an undertaking 

by the executive director of the Minnesota Board of Pharmacy to 

actually put the data up on the Internet. Although, when I last 

looked, it actually wasn’t there. 

Several clinics contacted us, alarmed that physicians in their employ were taking money in such large amounts from drug companies and they had been unaware of it. 

20

There were two important articles in the New York Times, the 

first of which identified physicians who had been used by pharmaceutical companies to run clinical trials, even though they had long 

records of discipline from the Minnesota Board of Medical Practice, 

and another which documented particularly large payments to the 

thought leaders to which Dr. Rosenthal just referred. 

My testimony has two parts, and the first is a review of existing 

State physician payment disclosure laws. We, for this testimony, 

conducted a detailed analysis of five State laws which are currently 

in place, and they are summarized in a table on page 3 of my testimony and in more detail in an appendix. 

What we learned was that none of the statutes requires device 

or biologic manufacturers to report payments, and I think that will 

be the first error to correct. Two of the five States do not require 

separate reporting of each payment, permitting various forms of 

data aggregation and the loss of important detail. In West Virginia, 

you don’t even have to report the name of the physician, so that 

is a particularly weak statute. 

Exclusions from reporting are common. The threshold for reporting ranges from $25 to $100. Four States exempt certain payments 

related to medical conferences and research studies from the reporting requirement, and all exempt free samples for patients, even 

though most studies show that the samples are, in fact, the largest 

expenditure for the pharmaceutical companies when it comes to 

marketing. 

We don’t think that these exclusions are justified, as long as each 

payment is clearly identified as having a particular purpose. We 

think that researchers, patients, and congressmen are able to look 

at these particular payments and make decisions for themselves as 

to whether or not they think they are appropriate. Only the Minnesota statute makes all of the disclosed information part of the 

public record without exception, although the four remaining 

States do require annual summary reports to the legislature. 

Now I want to turn to the second part of my testimony, to the 

paper that we published in the JAMA relating only to Vermont and 

Minnesota, which are the only two that are actually in place right 

now. In both States, payment disclosures can be obtained, but you 

really have to run through the hoops in order to get them. 

In Vermont, we had to enter into extensive negotiations with the 

attorney general’s office and submit simultaneously an Open 

Records Act request. It took 12 months before we got any of this 

information, and even then, 30 of the 68 companies in the most recent year designated at least some of their payments as trade secret, and, as a result, all of those records were withheld. 

Subsequently, we initiated a lawsuit against the attorney general, and most of the companies have now settled with us, providing some form, often of redacted data, but some data at least, 

but setting no precedent for release to others. 

In Minnesota, the data are easier to find but harder to use. You 

have to make a trip to Minneapolis to the office of the Minnesota 

Board of Pharmacy, and there you will find a bunch of boxes gathering dust because no one has bothered to open them for the last 

several years, let alone enter them into a database. 

21

So they are there for you. You pay to photocopy them. We did 

that and then entered them into a database for our study. But that 

hardly qualifies as adequate access for the public. 

Now, as far as the quality of the payment data in these two 

States is concerned, again, many of the entries aggregated the 

data, describing payments made to multiple physicians. Others describe payments made to individuals, so it is very hard to interpret. 

In Minnesota, some of the disclosures were handwritten, and I 

can speak for myself in saying that the handwriting of a doctor is 

not to be trusted, and, certainly, we encountered that kind of difficulty in Minnesota. The data quality was also poor, with many 

entries providing no information on the payment purpose. 

Now, as to the value of these disclosures, which we think is a 

dramatic understatement of the amount of payments that actually 

take place due to the various exemptions and because of the 

threshold for reporting and underreporting by the companies—because it is clear that many of them don’t report each time. We focused on those payments that are valued at over $100, because 

that is what the AMA and the PhRMA codes say is the limit that 

one ought to respect. 

In dollar terms, in Vermont, 61 percent of all of the State payments were withheld on trade secret grounds, which I alluded to 

earlier, and of the publicly disclosed ones, which were a minority, 

there were 2,416 to physicians for $100 or more, totaling $1 million 

over a 2-year period. The median payment was $177, and the largest payment was $20,000. 

Sixty-eight percent of these payments were in the form of food, 

which clearly provides no patient benefit and, therefore, in our 

view, is likely to violate the AMA and the PhRMA guidelines. 

In Minnesota, over a 3-year period, there were 6,238 payments to physicians for $100 or more, totaling $22.4 million; median, 

$1,000; highest gift, $922,000. Again, because of deficiencies in the 

laws and their enforcement, we think these are substantial underestimates of the extent of actual gift giving. 

Payment disclosure laws are a first step toward addressing the 

overall problem of drug company marketing, but they are not the 

only method, and they are not necessarily even the most effective 

one. No physician is obligated to accept the gifts. It does take two 

to tango, and there is an organization which has identified at least 

about 500 physicians who have taken a pledge not to take any gifts 

whatsoever from drug companies. 

Certain prominent medical schools, as laid out by Dr. Kassirer, 

have severed their ties in various respects with the drug industry. 

The industry and the AMA have their own guidelines, but as we 

pointed out, those are voluntary and rather weak. We also need 

stronger enforcement of existing restrictions on marketing at the 

levels of the Justice Department, the Federal Trade Commission, 

the FDA, and State Governments. 

So let me conclude with my recommendations. 

The first overriding point is that any national law should include 

device and biologic companies as well. 

But, really, my most important point is where I started. What we 

really need here is a national law. The overall quality of the statutes in the different States has been poor. Their implementation 

22

has been worse. Because the physician payment issue is a national 

one, not a State one, the most rational approach to this issue is a 

national reporting requirement. 

Thank you. 

[The prepared statement of Dr. Lurie follows:]

23


39865.011
24


39865.012
25


39865.013
26


39865.014
27


39865.015
28


39865.016
29


39865.017
30

The CHAIRMAN. Thank you very much, Dr. Lurie. 

Now we will hear from Representative Treat. 

STATEMENT OF HON. SHARON TREAT, STATE REPRESENTATIVE, EXECUTIVE DIRECTOR, NATIONAL LEGISLATIVE ASSOCIATION ON PRESCRIPTION DRUG PRICES, HALLOWEL, ME 

Hon. TREAT. Thank you very much, Chairman Kohl. I am very 

pleased to be here today to testify on behalf of State legislators on 

what is a very important issue. 

I am Sharon Treat, a member of the Maine House of Representatives, as well as executive director of the National Legislative Association on Prescription Drug Prices, which is a network of State 

legislators around the country, stretching from Alaska to Maine, 

working on prescription drug issues, trying to increase access to 

lower-priced drugs. 

Since at least 1993, as you have heard, when Minnesota passed 

the first State law banning certain gifts and requiring the disclosure of drug industry marketing payments, States have been at the 

forefront of efforts to ensure that the pharmaceutical industry does 

not unduly influence the practice of medicine and adversely affect 

patient health and safety. 

As of this month, at least 30 States have enacted laws or introduced legislation on one or more of the following topics: disclosing 

spending, as we have just heard; beefing up State authority to enforce misleading advertising and marketing rules; protecting privacy by restricting the marketing use of prescription data; regulating instant messaging and advertising in electronic prescribing 

software; regulating drug industry sales representatives’ activities; 

establishing independent, evidence-based, detailing programs; and 

requiring disclosure and posting of clinical trials information. 

The States’ actions find their legal and policy support in the traditional State role of licensing doctors, pharmacists, and other 

healthcare professionals; protecting consumers from misleading advertising and unsafe products; protecting the public health; ensuring that private information is protected from unwarranted invasions of privacy; and partnering with the Federal Government in 

funding and administering Medicaid and now Medicare Part D. 

Without the data collected through the Minnesota disclosure law, 

we would not have had the week-long series of front-page articles 

in the New York Times detailing payments to doctors and the questionable or unsafe prescribing patterns attributed to some of those 

doctors. 

Without the public online clinical trials databases required by 

the Paxil settlement, a case brought by State attorneys general, 

spearheaded by New York, the data would not have been available 

which formed the basis of a study linking a popular diabetes drug 

to increased risk of heart attack. We have heard about that already 

this morning. 

Maine law requires the results of all clinical trials to be published online, and other States are following suit. State attorneys 

general have been in the forefront, initiating consumer protection 

and Medicaid fraud prosecutions for kickbacks and misleading 

marketing tactics, including off-label promotions and failure to acVerDate 0ct 09 2002 14:43 Jan 24, 2008 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 H:\DOCS\39865.TXT SAGING1 PsN: JOYCE
31

curately and completely disclose adverse effects. The multi-State 

Neurontin litigation and Oxycontin cases are examples. 

States are concerned that marketing activities affect patient safety and provider prescribing patterns. Vermont, West Virginia, California, the District of Columbia, and Maine have joined Minnesota 

in requiring disclosure of marketing and advertising spending, as 

you have heard, with some concern about how effectively they have 

done it. However, they have gone ahead to try to get the information. 

Maine and Vermont also grant clear authority to enforce misleading marketing standards in the courts. These States have 

acted, in part, in response to a significant reduction in recent years 

in the overall number of Federal enforcement actions for misleading marketing as well as FDA delay in acting to curb abuses. 

Vermont now requires in a recent law enacted just this last 

month that pharmaceutical sales representatives disclose to the 

prescriber evidence-based information, including alternatives to the 

drugs that they are marketing, as well as the cost of treatment. 

Pennsylvania has a comprehensive evidence-based academic detailing program to provide objective information and 

‘‘unadvertisements’’ to physicians to counteract biased or at least 

one-sided information that is provided by sales representatives. 

Several other States have followed suit. 

With Medicaid costs always a significant factor in State budgets, 

States are looking at issues of doctor and drug company conflicts 

of interest, payments for prescribing and for specialty drugs, and 

the targeting techniques for marketing, such as data mining. Data 

mining also raises issues of privacy that resonate with State legislators and their constituents familiar with these issues in other 

policy areas. 

Many States have passed medical records confidentiality laws 

that predated HIPAA by many years. Some of these laws were significantly more protective of patient privacy than the Federal law 

that followed. 

Over the past decade, States have also dealt with privacy issues 

related to credit cards and credit ratings, debating between opt-in 

and opt-out approaches that mirror the debate right now over prescription data. A landmark 2006 New Hampshire law prohibits the 

use of doctor specific prescription information for drug marketing 

purposes. The data can still be used for health purposes, such as 

tracking patient safety. At least 13 States have similar proposals 

with two more signed into law this month, Vermont and Maine. 

There certainly is a strong role for the Federal Government to 

take action in many of these areas. To begin with, just to shine a 

light on marketing practices, as this Committee is doing, is of great 

value. 

There is also a need to have much stronger standards governing 

conflicts of interest, to take action to curb misleading marketing, 

and to require disclosure of payments and gifts, as well as of clinical trials data and other safety data. 

It would also, I need to stress, be a major step forward if the 

Federal Government would start by vigorously enforcing the laws 

already on the books which bar misleading advertising and off-label 

32

promotion, and if labeling standards and enforcement were not 

subject to negotiation with the industry. 

That said, we do have concerns about laws which might preempt 

State authority to act, particularly in those cases where States are 

acting within their traditional regulatory and enforcement functions and have actually stronger State laws. States have a traditional and effective role in enforcing consumer protection and misleading advertising laws, protecting public health, regulating medical professionals, implementing Medicaid, and safeguarding the 

privacy of their citizenry. It would be a bad bargain to trade strong 

State laws, even if they are in place only on a patchwork basis, for 

weak Federal laws that limit or prohibit State action. 

States are passing laws because there is a regulatory and enforcement void. But public health issues need to be addressed, 

nonetheless, and they are taking action to do that. Congress should 

act, but it should partner with the States rather than preempt 

them. 

I do have a whole lot of information about the specifics of what 

every State is doing appended to my testimony, which I can go over 

in more detail later on if you are interested. 

Thank you very much. 

[The prepared statement of Ms. Treat follows:]

33


39865.018
34


39865.019
35


39865.020
36


39865.021
37


39865.022
38


39865.023
39


39865.024
40


39865.025
41

The CHAIRMAN. Thank you very much, Representative Treat. 

To the entire panel, I would like to devote the time of my questioning to this issue of a registry that would require virtually all 

payments of any sort that are made from the industry to physicians to be made public and to be made available to people wherever and whenever they wish. 

Do you think that this is something that we should be doing, 

that it is necessary, that it would have an impact, a positive impact, would be a great step to take? Do you see problems in doing 

it? Do you think we ought to get after it as quickly as we can? 

What is your opinion, your experienced opinion, on this question 

of full disclosure of payments of any sort that are made between 

the industry and physicians? 

Dr. Kassirer. 

Dr. KASSIRER. Thank you, Mr. Chairman. I was extremely impressed with the reporting of Gardner Harris on the information 

that he was able to obtain as a consequence of the State laws. 

What surprised me about it was that there were insights that I 

hadn’t even thought about that came out, including the notion that 

there were physicians who had lost their licenses and were not 

practicing anymore, who were still allowed to do research for industry. That information would never have been otherwise available. 

These were physicians who were incapable of doing adequate clinical research. 

I would certainly support the notion that a Federal registry of 

some kind would be of value in identifying at least the extent of 

the involvement of physicians and industry. I think that more 

needs to be done besides that, and I made the point about shining 

more light on the problem by commissioning the National Academy 

of Sciences to study the issue. 

I spent time with the president of the Institute of Medicine about 

a year ago. He indicated that he would be interested in doing such 

a study, but didn’t have the funding to do it. The study that the 

Institute of Medicine did on medical errors shined a light on a series of extremely important issues that were, before that, hidden. 

I think the same could be true of a study by the IOM of this particular issue. 

But in terms of a Federal registry of some kind, I am all for it. 

The CHAIRMAN. Dr. Rosenthal. 

Dr. ROSENTHAL. Thank you, Mr. Chairman. I agree with [offmike]—I am still having microphone problems, but I think it is OK. 

I agree that the concepts of light and disclosure are very useful in 

this area, and there are a number of areas that need light shed 

upon them, and this is one. 

The data as to which doctors are receiving which kinds of valuable consideration, whether they be payments or stock options or 

whatever, is available. It exists, and I think that that data needs 

to be disclosed. It needs to be completely transparent, and we 

should demand it. I think that would be a great and fairly easy 

way to generate a database of that information for public use. 

There are several other areas that need illumination, and I assume we can talk about that later. 

The CHAIRMAN. Thank you. 

Dr. Lurie. 

42

Dr. LURIE. I think my testimony makes clear that I do think it 

is a good idea, but let me make three points—well, four. 

The first is that there is a tendency to think of disclosure as a 

panacea in a lot of areas, not just this one. So, as welcome as a 

registry would be, I think we need to think beyond that, and some 

of those are laid out in my testimony. 

The second point is just to refer to what Representative Treat 

had to say. I certainly agree that the last thing we need is a national registry that is weak and has the effect of preempting the, 

at least, good attempts that have been made at the State level, so 

preemption should not be of stronger State laws. Of course, a good 

cure for that is just to have a good Federal one. 

My next point is when it comes to shining light on this, I mean, 

part of what has allowed all of this to take place to date is, in fact, 

that it occurs, in effect, in darkness. I think it is worth thinking 

about the 2002 American College of Physicians’ policy statement 

regarding pharmaceutical companies. 

They offer three criteria for determining the appropriateness of 

a payment, and the first one is, ‘‘What would my patients think 

about this arrangement? What would the public think? What would 

I feel if the relationship was disclosed through the media?’’ 

What these disclosure laws do, in effect, is to put these theoretical questions that the ACP says are so important to the test 

and allows patients to make up their minds for themselves. 

My final point is this. When we set about writing our JAMA 

paper—and my co-authors who are here will attest to this—I was 

somebody who was rather skeptical about the naming of physicians. I thought that what we wanted to do was provide aggregate 

information and be able to describe the extent of things in a kind 

of public health way, not in an individual way. 

But in the course of doing the study, a lot of private information—not private, but personal information did come out. I have become a strong convert to the idea that, in fact, there is a lot to be 

gained from putting out the actual names of the doctors. There is 

a lot of creative work, some of it done in the New York Times, in 

which you can link particular people to other information, be it doctor disciplinary records, whether or not they are key opinion leaders, et cetera, et cetera, whether they sit on FDA advisory committees. 

All of those kinds of things can only be done when you have the 

doctors’ names. If the doctors are not ashamed of this, they 

shouldn’t be objecting to this. 

The CHAIRMAN. All right. Thank you so much. 

Representative Treat. 

Hon. TREAT. Yes, thank you. I would concur that if we can do it 

right, a national registry would be great. 

I was interested in Dr. Lurie’s testimony, because those are a lot 

of the issues that we, as an organization, are advising States, about 

what is the best way to write these State laws when they go about 

it. 

We are trying to make sure that they don’t look at a law that 

has been passed somewhere else and say, ‘‘Well, that passed. This 

is the way to go,’’ because many of those, of course, include compromises that went into effect and were the only reason the law 

43

passed. Those compromises really are the loopholes that Dr. Lurie 

has identified. 

Certainly, having prescriber identity is important. I know that 

that is something that the Vermont legislature has been trying to 

focus on and make sure that its laws, which initially had that only 

in the aggregate, now provide in more specificity. 

I think we need to remember that some of the State laws were 

initially passed without really understanding the relationships between these payments and actual prescriber behavior. A lot of the 

States were actually looking initially to shine a light on how much 

money was being spent on marketing and advertising activities. 

So many of the laws are really focused on just collecting information on how much money was spent as opposed to really making 

the link between prescriber behavior and payments to those prescribers. I think States have become more and more aware of that, 

particularly as the data in Minnesota is now being analyzed, and 

I give a lot of credit to the New York Times and the reporters there 

for actually spending, as I understand, well over a year going 

through those boxes. 

Just in Minnesota’s defense, I think that the Web and Web-based 

information was a lot less common in 1993 than it is in 2007. That 

brings me to my point that having Web access, and having it in a 

format that is, in fact, accessible would be very important. 

I agree with Dr. Lurie that the trade secret exemption is an exemption that can be a loophole that swallows the whole rule. This 

comes up in many, many contexts. It is very important to get that 

right and to make sure that just anything can’t be claimed to be 

a trade secret and thus be protected from disclosure. 

I agree on the medical devices, making sure that those are in. 

I think, again, that is something that when State legislators were 

passing these laws, they were focused on prescription drugs and 

not so much on medical devices. But that is an issue that has come 

to light. 

Another area where there are loopholes in the Minnesota and 

other laws is the definition of educational activities and continuing 

medical education activities and making sure that those are included as well. 

I just say that transparency alone may not be enough, and I 

think many States think that it isn’t enough. Certainly, an analysis 

of the data from Minnesota shows that the voluntary guidelines 

that are in place are not being honored. So it may be that since 

no one knew what was in those documents, since they were all in 

big boxes, it is not a fair test of transparency, and a registry that 

had information posted on the Web somewhere where everyone 

could go see might be much more effective. 

But that said, there are a lot of other issues. Some of them have 

been alluded to by other members of the panel, and some of them 

are addressed in the State legislation that I mentioned, including 

the kinds of practices that go on in doctors’ offices, the data mining 

issues, and some of the other things around actually banning gifts 

that might be appropriate for this Committee and Congress itself 

to consider doing. 

The CHAIRMAN. Dr. Kassirer. 

44

Dr. KASSIRER. Thank you, Mr. Chairman. Dr. Lurie’s comments 

reminded me of a point that we really must make, and that is that 

we have spent a lot of time talking about disclosure. In fact, if you 

look at the reports in the newspapers, it has been largely about the 

lack of disclosure. 

So people have made a lot about the fact that physicians have 

done various things and made various comments but have not disclosed their ties with industry, which could have influenced their 

opinions. 

The fact is that we must pay attention to a much more fundamental issue, and that is that disclosure is perhaps necessary in 

terms of identifying those who have conflicts of interest, but it is 

not sufficient, because disclosure doesn’t solve the problem. The 

problem is the conflict, and disclosure doesn’t solve the conflict. 

The CHAIRMAN. Very important point. 

Well, we have with us today a distinguished senator from the 

State of Delaware, Mr. Tom Carper. 

We would love to hear your comments and questions, Senator 

Carper. 

Senator CARPER. Thank you, Mr. Chairman. 

I am happy to be here, and I think this is a busy time—we have 

three separate hearings going on at once. We are being briefed by 

the director of national intelligence, we are doing immigration reform on the floor, and we have got a bunch of people here from 

Delaware. But I wanted to be here at least for part of this, because 

this is a good and important hearing. 

I have missed your statements, and what I am going to ask you 

to do—and I do this sometimes when I am sort of in and out of a 

hearing. But could each of you take maybe a minute or so and give 

me a couple of major takeaways, from your opening statements 

please. 

Representative Treat, that is a great name. That would be a 

great name to have as a politician. If I had a name like that, I 

could go somewhere. [Laughter.] 

Hon. TREAT. Especially when you are going door to door right before the election, which would be around Halloween. 

Senator CARPER. You probably have a lot of fun with that. 

Hon. TREAT. Yes. Well, thank you very much for an opportunity 

to reiterate everything I said already, which I won’t do. [Laughter.] 

Senator CARPER. Not everything, not everything. 

Hon. TREAT. No, I won’t do that. But my takeaway would be 

that, you know, States have really been in the forefront on this 

issue, not only on disclosure, but in a lot of other areas. 

Let me just give you an example. I think as sort of an early 

warning system, one of the bills—actually, it is a bill I sponsored, 

and it was initially passed into law in Florida, and Vermont just 

did it, and it looks like New Hampshire is just about to. It focuses 

on a whole new area of electronic prescribing, where there is this 

huge push, a lot of it going on here in Congress, to get doctors to 

put everything onto electronic recordkeeping, you know. Well, what 

that means—and actually have electronic prescribing, where you 

just write into your PDA and it goes straight to the pharmacist. 

That enables tremendous new tools in terms of mining that data, 

questions about privacy. Questions in this legislation—the legislaVerDate 0ct 09 2002 14:43 Jan 24, 2008 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 H:\DOCS\39865.TXT SAGING1 PsN: JOYCE
45

tion I had and others had, which are actual messages that pop up 

from a pharmaceutical company. Let’s see. You are just about to 

write a prescription for a particular drug, and it says, ‘‘Hold on 

there. I will show you one that is prescribed as—Drug Y has much 

better effects,’’ and all this clinical information, and that could be 

a lot better. 

Well, you could see that being done in a way that is very objective and presenting information on all sides. But you could also see 

it—as has been the experience in Australia, which is much farther 

along this road of electronic, you know, records and prescribing—

as really interfering with doctors’ behaviors and actions. This is an 

issue that the States are focused on, and the Federal Government 

is very far behind. 

So, I guess, you know, my message is that States may not be 

doing it perfectly, but they are kind of an early warning system, 

and they are tackling issues that aren’t likely to be addressed anytime soon by the Federal Government. We need to make sure that 

as Congress moves ahead in doing things like a registry, which I 

think is a great idea, that we are not preempting State laws that 

might actually be stronger. 

Maine has a clinical trials database law that is far more comprehensive than the Federal law on the books. If there were preemption of State laws, you would end up not actually getting the 

data from Maine. So that would just be my proviso on it, and there 

are a lot more issues than just transparency for you to focus on. 

Senator CARPER. Thank you, Representative Treat. 

Dr. Lurie. 

Dr. LURIE. As long as you are making observations on Representative Treat’s name, I will point out that she is the right person to 

be speaking at a meeting about conflict of interest. It really seems 

just the right name for that. 

The points that I made in my testimony were, one, that physicians typically believe they are unaffected by interactions from 

drug companies though they believe that their colleagues are likely 

to be affected, which is, you know, kind of a logical contradiction. 

Senator CARPER. What we hear around here sometimes, you 

know, we work on ethics legislation, you know. 

Dr. LURIE. Right. It is, ‘‘I am immune, but nobody else is.’’ I went 

on to talk about some of the successes of the State payment disclosure laws. Then I went on to talk about the five that have so far 

been enacted, and I pointed out that there were a number of gaping holes in those, and I pointed out that sometimes the exemptions swallow up the law itself. 

But there are ways to make them better, to be sure, and we lay 

out a series of recommendations at the end of our testimony, which 

run the gamut from literally how to enter things on the Internet 

to what the exemptions should be and so forth—how often reporting should be made to the legislature and so on. 

Anyway, the point is that there are holes in all of the existing 

State pieces of legislation so far. Then we went on to look in more 

detail at Minnesota and Vermont, which are the two that actually 

have reporting requirements that are in place. 

We showed that the accessibility of payment data is very poor, 

that either through the legal loopholes or through, really, negVerDate 0ct 09 2002 14:43 Jan 24, 2008 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 H:\DOCS\39865.TXT SAGING1 PsN: JOYCE
46

ligence on the part of the Board of Pharmacy in just not analyzing 

the data that kept coming in, there is de facto little access to information, that the quality of the payment data in data terms is often 

poor, allowing aggregation of data where individual data would be 

much more helpful, both for the public and for researchers, 

that——

Senator CARPER. Doctor, I am going to ask you to go ahead and 

sum it up, because I need to hear——

Dr. LURIE. Absolutely. 

Senator CARPER [continuing]. From the other witnesses, and——

Dr. LURIE. That is fine. 

Senator CARPER [continuing]. Senator Kohl has infinite—well, almost infinite patience, but he won’t let me go on forever, so just 

wrap it up, please. 

Dr. LURIE. I am sorry. 

So the disclosed payments are large in our study in the JAMA, 

although they are probably underestimates. Finally, as a result of 

this, we conclude that a national State reporting law is what is required, although we agree with the comments of Representative 

Treat about preemption. 

Senator CARPER. Good. Thank you. Thanks so much. 

Dr. Rosenthal, just a minute or 2 of a takeaway, please. 

Dr. ROSENTHAL. Thank you, Senator. 

I would encourage you to read the written statements and, also, 

some of the media coverage of this is covered on our Web site, the 

Physicians for Clinical Responsibility Web site, which is 

clinicalresponsibility.org. 

In a nutshell, my testimony was the view from the trenches, particularly in retinal surgery. It is a before-and-after story. 

Until seven years ago, research was independently funded. It 

was credible. It was trustable. People would get up at meetings and 

give talks that you knew were fact based and unbiased. 

About seven years ago, with the advent of a treatment called 

photodynamic therapy, this brought in the era of corporate sponsored clinical trials. Since then, it has been one example after another, and with each succeeding iteration, the drug companies have 

gotten better at marketing to doctors, crossing the line to paying 

poorly qualified clinical doctors to do paint-by-numbers research according to their dictates, and we are supposed to just trust their 

altruism that it is all unbiased. Studies don’t support that unbiased character. 

We have seen the sort of perfection of the recruitment of doctors 

to be key opinion leaders and to either fail to disclose or, more commonly, euphemistically disclose their relationship with companies 

to the point where we have very little credibility at society meetings, in many of the—not all, but many of the journal articles and 

this sort of thing. 

This has created a significant pressure on doctors to follow drug 

company party lines on clinical decisionmaking. The monetary impact of this is phenomenal. There is a single drug——

Senator CARPER. I am going to ask you, if you will, to wrap up 

because my time is limited. Thank you. 

Dr. ROSENTHAL. This is my last thing. 

47

There is a single drug that we are currently expected to use, that 

if all patients were treated with this drug, according to the study 

protocol, out of Part B, it would cost about $5 billion per year. That 

is just a little bit more than the entire eye care CMS budget. 

So, as you can see, the stakes are very high. 

Senator CARPER. Yes, thank you. 

Dr. is it Kassirer? 

Dr. KASSIRER. Yes. 

Senator CARPER. Has your name been mispronounced? 

Dr. KASSIRER. No, it is pronounced correctly. Thank you. It is 

usually not. 

A couple of words. I have asserted that the medical profession 

has become excessively dependent on the largest of industry, that 

these financial connections have had a negative influence on the 

quality and the cost of patient care and the trust of the public, and 

that the profession’s response to these threats have been inadequate. I made the point that the leaders of the profession have 

done little to counter a trend. 

It always amazes me that there is a paradox in their policies. On 

the one hand, they admit that physicians can be influenced by gifts 

and trips and things like that, and yet they allow it, anyway, and 

that seems to me to be something that is counter productive in 

terms of the cost of care and the quality of care. 

Thank you, sir. 

Senator CARPER. Thanks very much for both of those points. 

Mr. Chairman, I have a couple of questions I want to submit for 

the record to this panel, if I may. 

But thank you for your testimony and for summarizing for me. 

Much obliged. 

The CHAIRMAN. Thank you, Senator Carper. We thank you very 

much for your questions. 

Senator McCaskill. 

Senator MCCASKILL. Thank you very much. 

I apologize for not being here to hear all of your testimony, although I heard it. You know, it is so funny, because we have senators give speeches on the floor, and afterwards, someone says, 

‘‘Well, I heard your debate.’’ You realize that most people watching 

things around here are watching on television while they are trying 

to multitask. So, I was listening to your testimony as I was multitasking upstairs in my office. 

I wanted to focus a little bit on this panel—and anyone can address this question that would like. I am concerned about the research component of this. 

I am very concerned about the conflicts—if I look through JAMA 

and I look through the New England Journal, first of all, I am concerned about all the ads, and then I am concerned that we are 

going to get to the point that the conflict paragraph at the end of 

these articles is longer than the article. 

Now, the good news is that there is disclosure, and that these 

doctors are disclosing that they are receiving money from these 

various pharmaceutical companies and these various prescription 

drug companies, and that is good. But what I am worried about is 

the research that is going on that is not getting published because 

48

maybe the results aren’t what the people who paid for the research 

wanted. 

I am particularly worried about PhRMA research that is ongoing 

and that maybe, because the results of that PhRMA research are 

not what they hoped it would be, it never sees the light of day. I 

would welcome your comments on that potential problem that we 

have under the current scenario. 

Dr. KASSIRER. Well, as a former medical editor, I feel somewhat 

compelled to speak out. You are absolutely right about the disclosures at the end of these articles. They are monumental, it seems 

to me. 

When I was the editor of the New England Journal, we had a 

simple policy, and that is that if someone had a financial conflict 

of interest, we would not allow them to write an editorial or a review article. We also had a policy in which none of our editors had 

a financial conflict of interest. I got a report every single year from 

all of the editors, and anyone who developed a financial arrangement was no longer an editor. 

With respect to scientific studies, the kinds of studies you were 

referring to, first of all, it is possible that one could eliminate those 

studies in which people had a conflict of interest. The problem 

would be that you would have no studies left, because most of the 

studies that are published in major journals are supported in some 

part by industry, and many of the investigators have financial arrangements with industry. That is the reason for all these disclosures that you have now begun to see in medical journals. 

What I am always surprised about is how many of these investigators have how many conflicts of interest—some of them, 15 or 

20 or 30 conflicts of interest with companies that they work with. 

You have to ask yourself, ‘‘What are they doing at home if they 

have conflicts of interest with all these different companies?’’ 

Whether or not these conflicts influence the science is a critical 

question. I can tell you that two British editors, Richard Smith, the 

former editor of the British Medical Journal, and the editor of the 

Lancet, Richard Horton, have recently spoken up, saying that they 

don’t trust the studies that even they themselves have published 

in their journals. 

With respect to the advertising in the journals, well, it is a complex problem. I can tell you that the New England Journal—when 

I was there, the New England Journal could have survived financially with just the job ads and the subscription cost of the journal, 

and you could have eliminated all pharmaceutical ads. 

But the Massachusetts Medical Society that owned the journal 

would never have heard of that. I mean, they made a lot of profit 

on the journal, and they built an incredible organization as a consequence of all those profits. 

I can tell you one thing about—at least, I can tell you about the 

New England Journal, and I am sure it is certainly true today—

and that is that the ads in the journal have never had any kind 

of effect on the content of the journal, the editorial content of the 

journal. I am sure that is also true for JAMA. I can’t tell you for 

sure if it is true for all medical journals. 

It certainly is possible that, in some way, medical journal editors 

are influenced by their advertising. In fact, you heard already—

49

Greg mentioned an example where a medical journal editor refused 

to publish one of his conflict of interest pieces because he was 

afraid an advertiser would go away. So I think there may be examples in which editors craft their content, their editorial content, 

based on their advertising. 

With respect to negative studies, it is a mixed bag, I think, in 

the sense that journal editors are not excited about publishing negative studies, anyway. They are not very exciting studies. So some 

of the reason for these studies not getting published might be the 

fact that journal editors just turn them away. They are not interesting. 

On the other hand, the current crop of medical journal editors 

have set out a series of guidelines requiring the registration of clinical trials, and that registration would at least alert you to the fact 

that there is a study that hasn’t been published. It is not complete. 

It needs a big fix before it can function effectively. 

So is it possible that there are studies with negative results that 

are not being published? Yes, it still is possible. 

Senator MCCASKILL. Well, I think figuring out a way that everyone knows when clinical trials are going on would be really, really 

important, because then there would be an opportunity for research—even if they were not published. 

Now, with our technological capability in terms of the Internet, 

there is absolutely no reason that non-published stories could not 

be available to people who are interested, and that information 

that clinical trials are ongoing, I think, would be key. 

Just briefly, one follow-up question, Mr. Chairman, if you don’t 

mind. 

If, in fact, the large hand of the pharmaceutical industry is essential to these research projects going forward, then would it be 

the opinion of the panel that independent research at—and here is 

what I am referring to now. 

At higher education institutions, where these companies are coming in and saying, ‘‘We will give you money at your school if your 

academicians in the medical field will do these studies,’’ and then 

you have academicians now kind of being harnessed by virtue of 

the flow of money—and what worries me is where are we going to 

end up 10 or 20 years from now in terms of truly independent academic studies. 

Are these academicians that may want to go and research something that would be a terrible outcome for the flow of money—and 

I think this may be, frankly, a corollary of the fact that we have 

sadly, sadly, in this country, short-changed higher education in 

terms of research money and the kind of money that we need to 

be investing in terms of keeping the prominence of our country in 

terms of the field of higher education. 

Now, that is my own political bias about funding higher education. But if any of you would comment on that? Yes? 

Dr. LURIE. Well, I certainly agree with all of this. 

I think when we talk about the conflict-of-interest statements, 

first of all, I mean, I think they have become so long that we literally risk turning them into a laugh line at some point, where it 

becomes a joke the way the surgeon general’s warning on tobacco 

became a joke after a while, and you wind up on ‘‘Saturday Night 

50

Live’’ joking about the extent of the disclosures. I once read the 

transcript of an FDA advisory committee meeting, where they are 

busy disclosing all of this, and somebody gets up to say, ‘‘I just 

want to say you didn’t mention my conflicts. I don’t have any, but 

I sure wish I did,’’ you know. 

So it becomes a bit of a joke, and that is one of the limitations 

of disclosure, as important as it is. 

I think when it comes to the research, as important as all of the 

data suppression examples—which there are, be they the class 

study with regard to Celebrex, where the company published half 

the data, because it knew that the full data set that it had in its 

possession didn’t show the benefit that half the data set showed; 

or be it withholding of the studies on SSRIs, many of which turned 

out to be negative, as far as the company was concerned. 

By the way, the FDA knew all of this, and because of its own 

secrecy laws wasn’t able to expose the way that the companies 

were withholding the information. So the levels of secrecy at the 

FDA are also a part of the problem here. 

But with regard to the funding of research, as important as the 

data withholding is, probably more important is the fact that as industry is a larger and larger funder of research in this country, 

they are setting the agenda. They are asking the questions. They 

decide which questions get asked and which ones, in effect, do not, 

because the academicians have only so much time to do their work. 

You know, physicians could say no to that—the researchers could 

say no to that money, but they don’t. So what we have are questions that are of interest to drug companies that may be of absolutely trivial interest to the public health: whether the 24th nonsteroidal anti-inflammatory drug has some minor advantage over 

the 25th non-steroidal anti-inflammatory drug. I am just not that 

interested in that question. 

I am interested in questions about diet and exercise and truly 

breakthrough drugs. But those studies are harder to get funded, 

and the industry is not nearly as interested in them. 

I will point out that back in the 1970’s, there were proposals that 

the pharmaceutical industry would pay into a large pot from which 

studies would be done, selected in terms of their public health importance by impartial people and then conducted by people who 

would be responsible for both doing them and analyzing them. That 

is really the way out of this problem. I mean, it is——

Senator MCCASKILL. What happened to that suggestion in the 

1970’s? 

Dr. LURIE. You know, it went the way of many proposals, I am 

afraid. We hear about it periodically as if it is, you know, something completely impossible. Actually, the New Yorker has a little 

article about it just this week in which that idea is revived as if 

it were something new. But it is something that periodically percolates up as——

Senator MCCASKILL. I think that would be a spectacular idea. 

Dr. LURIE. I would agree. 

Senator MCCASKILL. It would solve the problem. 

Dr. LURIE. Yes, it would. Unfortunately, certain of the monied interest wouldn’t be terribly happy with it, and that is probably 

where it went. But I agree with you. 

51

If you think about it, as Dr. Kassirer was saying, when you think 

of conflict, I mean, the best solutions to conflicts are not merely 

disclosure. They are structural approaches that remove conflict, 

and this would be an example of the same. 

Senator MCCASKILL. Right. 

Mr. Rosenthal. 

Dr. ROSENTHAL. If I could quickly comment on a couple of things, 

first, I would like to point out that, in my field of retinal medicine, 

there are many very, very good researchers who are trying to do 

good work and trying to do non-conflicted work. I believe that they 

find it annoying that there is so much pharmaceutical influence, 

because it does make it hard for the reader to know what is biased 

and what isn’t, and I think that casts good work in a more tentative light as well. 

I also wanted to agree that there are many areas where it is the 

way you ask a question, it is what you decide to look at, that sort 

of thing. There is one study of a commonly used treatment where 

they redefined visual success to include three lines of visual failure. 

If they hadn’t done that, the data wouldn’t have looked so good. 

Senator MCCASKILL. Right. 

Dr. ROSENTHAL. That same study elected not to look at toxicity 

effects for 3 months after the treatment. We now know that that 

particular treatment is highly toxic to the macula. 

There is another example where a company had two versions of 

the same drug. One had already been priced for another treatment 

and could be available in doses we needed for eye care at around 

$50 a dose. The other version of the same molecule is $2,000 a 

dose, and you have to give it more often. So which would you 

choose to study in a randomized trial and get approved? It is not 

hard to see. 

Senator MCCASKILL. Thank you, Mr. Chairman, very much. 

The CHAIRMAN. Thank you, Senator McCaskill. 

We thank this panel exceedingly for being here today. You have 

provided great testimony, great observations, and, hopefully, we 

will be able to make some progress as a result of your testimony. 

Thank you for being here. 

Our second panel consists of two witnesses. 

The first will be Dr. Robert Sade. Dr. Sade is chair of the American Medical Association’s Council on Ethical and Judicial Affairs, 

and he is a professor of cardiovascular and thoracic surgery at the 

Medical University of South Carolina. 

Our second witness will be Marjorie Powell. Ms. Powell is the 

senior assistant general counsel at the Pharmaceutical Research 

and Manufacturers of America. Her current work focuses on the 

legal implications of State legislation regarding prescription drugs 

as well as oversight of PhRMA’s legal matters. 

We thank you both for being here. 

Dr. Sade, we will take your testimony. 

52

STATEMENT OF ROBERT SADE, CHAIR, COUNCIL ON ETHICAL 

AND JUDICIAL AFFAIRS, AMERICAN MEDICAL ASSOCIATION, 

WASHINGTON, DC 

Mr. SADE. Thank you, Chairman Kohl and members of the Committee, for convening this hearing to examine financial relationships between physicians and the pharmaceutical industry. 

The topic is very timely, and the AMA sees today’s hearing as 

an opportunity to communicate the ethical standards that guide all 

physicians in the practice of medicine and in their interactions 

with the pharmaceutical industry. 

My name is Robert Sade. I am chairman of the Council on Ethical and Judicial Affairs of the AMA, and I am also professor of 

surgery and director of the Institute of Human Values and 

Healthcare and the Medical University of South Carolina in 

Charleston. 

Physician prescribing decisions depend heavily on a quality of 

available scientific information. The pharmaceutical industry and 

Federal regulators are important information sources. There is a 

clear need for interactions between physicians and the pharmaceutical industry to ensure the free flow of valid scientific information. 

When the information is accurate and complete, physicians have 

the necessary tools to make the right prescribing decisions for their 

patients. If information is not properly provided by industry, or if 

physicians never receive such information, quality medical care can 

be jeopardized. 

The AMA was created in 1847 for the specific purpose of establishing ethical standards for all physicians. The AMA code of ethics 

has been continually revised for 160 years, guided by the Council 

on Ethical and Judicial Affairs, and serves as the primary compendium of medical professional ethical statements in the United 

States. 

The code has clear ethical guidelines that govern physician interaction with the pharmaceutical industry. For example, physicians 

must not place their own financial interests above the welfare of 

their patients. 

A physician’s medical recommendations must not be inappropriately influenced by financial considerations. Accordingly, it is unethical for a physician to accept any kind of compensation from a 

pharmaceutical company as a quid pro quo for prescribing its products. 

The AMA code acknowledges that the giving of gifts reflects a 

customary social practice. However, it warns that gifts to physicians from commercial businesses may not be consistent with the 

AMA code. The code requires that gifts accepted by physicians 

must mainly benefit patients and should be of only modest value. 

Also, the AMA code explicitly provides that no gifts should be accepted if conditions are attached, such as prescribing certain drugs. 

All gifts, however, are not inappropriate. Indeed, many of them will 

benefit patients. An example is when physicians provide drug samples to patients who have a medically indicated need for treatment 

but cannot afford to buy the necessary drugs. 

The AMA works with State medical associations and specialty societies to disseminate ethical standards. To ensure compliance with 

53

these standards, the AMA relies not only on the Council on Ethical 

and Judicial Affairs, but also on medical licensing boards. 

About six years ago, the AMA undertook a major campaign to 

educate physicians and industry representatives about the AMA’s 

ethical guidelines regarding promotional gifts to physicians from 

industry. More than 30 other physician and healthcare organizations came together to form the working group on the communication of ethical guidelines for gifts to physicians from industry. As 

a result of this collaboration, the AMA created an awareness program to educate physicians and other stakeholders on ethical 

guidelines and developed an educational program. 

The AMA is currently developing a series of educational programs for medical students and physicians designed to promote the 

importance of sound prescribing, focusing on how to minimize and 

eliminate undue influence by industry marketing practices. Special 

attention is given to medical students in resident positions in addressing this important issue, since interactions with industry 

often start very early in a physician’s professional career. 

The interactions between industry and the medical profession 

must be defined by the exchange of sound scientific information 

which benefits patients. All practices that surround those encounters, from the visits of pharmaceutical representatives to large educational gatherings, must be framed in terms of such an exchange 

and must not constitute an attempt to inappropriately influence 

the medical treatment that physicians provide to patients. The 

health and welfare of patients depend on this. 

The AMA looks forward to working with the Committee to 

achieve our shared goals. Thank you for the opportunity to be here 

today. 

[The prepared statement of Mr. Sade follows:]

54


39865.026
55


39865.027
56


39865.028
57


39865.029
58


39865.030
59


39865.031
60


39865.032
61

The CHAIRMAN. Thank you, Dr. Sade. 

Ms. Powell, we would like to hear from you. 

STATEMENT OF MARJORIE POWELL, ESQ., SENIOR ASSISTANT 

GENERAL COUNSEL, PHARMACEUTICAL RESEARCH AND 

MANUFACTURERS OF AMERICA, WASHINGTON, DC 

Ms. POWELL. Thank you, Mr. Chairman, Senator McCaskill. My 

name is Marjorie Powell. I am the senior assistant general counsel 

at PhRMA, which is the trade association representing those companies that are researching and developing new medicines. 

One of the important responsibilities of a pharmaceutical company when FDA has approved a new medicine is to make sure that 

physicians know that the medicine is available and know how and 

when to use that medicine and how and when not to use that medicine. That is the purpose of what is called pharmaceutical marketing or promotion. It is to make sure that physicians know when 

to use and when not to use medicines. 

In 2002, PhRMA adopted a significantly revised marketing code, 

which focused exactly on that, identifying that the role of a physician’s prescribing is to meet the patient’s medical needs using the 

physician’s medical knowledge and clinical experience. But some of 

that medical knowledge comes from using prescription drugs once 

they have been on the market and experience with those drugs. It 

also comes from learning about new medicines, and that is the role 

of the pharmaceutical industry which has developed those new 

medicines. 

In our code, we have clearly identified that if a pharmaceutical 

sales representative is providing a gift to a physician, it should be 

to benefit the patient. It should be of insubstantial value, not of 

any substantial value. It should not be frequent. It should also not 

be in exchange for prescribing any particular drug. 

We also talked about a number of other things in our code, including the ways that pharmaceutical companies might enter into 

consulting arrangements with physicians and other members of the 

healthcare profession, because those healthcare professionals have 

important information to convey to pharmaceutical companies, 

partly running clinical trials, but also helping a company to identify, for example, why it is that a patient may not be compliant 

with a drug regimen and what kinds of possible changes in a medicine would improve compliance. 

Our pharmaceutical code has been a leader in the industry, although I must admit that we have clearly followed the AMA in 

many of our issues and worked closely with the AMA in trying to 

make sure that physicians are aware of the provisions of the code. 

A number of other groups also regulate pharmaceutical promotion and marketing. The FDA clearly has a major role in that, 

as you know, particularly, because you have just considered the 

new prescription drug user fee bill that has moved through the 

Senate and now moved through the House Energy and Commerce 

Committee. In addition, the Inspector General of HHS has said 

that compliance with the PhRMA code, while it is not a guarantee 

that you will be compliant with Federal law, goes a long way to indicating that a company is making a major effort to comply with 

all the Federal regulations. 

62

Let me turn now to the other side of my testimony, which is the 

importance of pharmaceutical marketing. Physicians recognize that 

they get valuable information from pharmaceutical representatives. 

They also recognize that some of that information is promotional 

and that they need to ask a variety of questions. Physicians are, 

in fact, trained professionals who know how to ask questions and 

how to evaluate both their own experience and all of the information that they receive. 

Pharmaceutical marketing is an important counter to many of 

the other influences on physicians’ choices of treatment. For example, one study found that physicians don’t even talk to patients 

about treatments that their healthcare insurers will not pay for. 

That is a way of screening physician actions that has nothing to 

do with pharmaceutical marketing, and, in fact, one study found 

that 54 percent of physicians said that formularies had a major impact on their prescribing. 

Another thing that formularies and managed care have done is 

to increase the percentage of scripts that are actually generic prescriptions. In the United States, this past year, 63 percent of all 

scripts written were for generics. That is a much higher percentage 

than in other countries, particularly Europe, where there is much 

less pharmaceutical promotion. 

Let me wind up by saying—and if Senator Carper were still here, 

I would give him my summary by saying—that there are a number 

of chronic conditions that are the drivers of healthcare expenditures. A number of people have identified that approximately 75 

percent of healthcare spending is on chronic diseases, many of 

which are undiagnosed or underdiagnosed and clearly are undertreated. 

Prescription medicines are prescription medicines, not over-thecounter medicines, because they have both benefits and risks, and 

they can only be used, in the opinion of the FDA, when they are 

prescribed by somebody with medical education and professional 

clinical experience. That is why it is important that the companies 

who have developed those medicines communicate information 

about both the benefits and the risks of those products to the people who will be prescribing them. 

[The prepared statement of Ms. Powell follows:]

63


39865.033
64


39865.034
65


39865.035
66


39865.036
67


39865.037
68


39865.038
69


39865.039
70


39865.040
71


39865.041
72


39865.042
73


39865.043
74


39865.044
75


39865.045
76


39865.046
77


39865.047
78


39865.048
79


39865.049
80


39865.050
81


39865.051
82


39865.052
83

The CHAIRMAN. Thank you very much, Ms. Powell. 

Dr. Sade, the guidelines that the AMA has out there, would you 

support making these guidelines mandatory, and would you support enforcing your guidelines? 

Mr. SADE. Thank you, Senator Kohl. 

The guidelines of the American Medical Association already are 

being enforced. The Council on Ethical and Judicial Affairs, of 

course, has jurisdiction only over its own members. 

But the council screens between 250 and 300 alleged physician 

violations of the ethical code every year, and of those, 30 to 40 actually come to a due process hearing. Sanctions are levied against 

some members of the AMA in the form of having their membership 

revoked or having their membership suspended or being put on 

probation, et cetera. 

But the reach of the disciplinary value of the AMA code goes far 

beyond that. Most medical boards in the United States use the 

AMA’s code of medical ethics as their standard for ethical behavior 

of physicians, and they sanction physicians based on violations of 

the AMA code. That is a very powerful influence of the code on 

medical practitioners. 

The courts also refer to the code in deciding, actually, many 

cases, and that is another way in which the code is very useful in 

the American judicial system. So I don’t think it is quite accurate 

to say that the code of ethics of the American Medical Association 

isn’t being enforced. In fact, it is. 

The CHAIRMAN. So you would support full disclosure in a national registry? 

Mr. SADE. I don’t know the answer to that question, because the 

AMA has not yet considered it or deliberated over it. 

The CHAIRMAN. Well, do you consider it to be a good idea? 

Mr. SADE. I don’t know that, because we only have a limited experience with the States, which I think are very valuable experiments in determining the benefits of such a program, as well as the 

potential risks of such a program. Both the benefits and the risks 

were pointed out by the previous panel. 

The CHAIRMAN. How do you feel about Minnesota’s law? 

Mr. SADE. Well, I will say the same thing, that the analysis of 

the data is too incomplete at this time to make a decision. But the 

fact of the matter is that AMA has not developed any policy on 

this, but it is monitoring the situation closely and will be creating 

policy in the near future. 

The CHAIRMAN. Ms. Powell, how do you feel about full disclosure 

in a national registry? 

Ms. POWELL. We have been working with a number of States as 

they have first considered legislation and then developed regulations. It is very clear that the State legislators, as they have been 

putting together legislation and making amendments, have not 

fully understood the complexities of what it was that they were 

dealing with or the potential interaction with FDA regulations, 

which, of course, are national and are the ones that pharmaceutical 

companies have to abide by. 

As they have moved to the regulation stage, they have had even 

more difficulty in defining what it is they think should be included 

in a registry. So we would caution that that indicates that perhaps 

84

there is a need for much consideration about what would be included. Take, for example, the question of pharmaceutical samples, 

which some States have defined as gifts, but which we think are 

essential practice tools for physicians and patients to learn about 

whether a new medicine will be helpful for them, particularly when 

a patient may not have insurance. 

There has been one study that found that a large number of the 

patients to whom physicians have given samples were patients 

without insurance. If you define those as gifts, that implies that 

the physician is receiving a benefit, when, in fact, the samples are, 

under FDA law, required to be given free of charge to patients who 

need them. So there are those kinds of complexities that would 

make the effort toward developing a national registry very difficult. 

The CHAIRMAN. OK. 

Senator McCaskill. 

Senator MCCASKILL. I know, Mr. Chairman, they have called a 

roll-call vote, and so we don’t have much time. 

You know, we are trying to go through the process of lobbying 

reform in Congress right now, and I think anyone would have to 

be honest and acknowledge that a lot of what is going on with the 

pharmaceutical industry, as it relates to their contact with doctors, 

is lobbying. It is lobbying, pure and simple. 

My brother ran a restaurant in Springfield, and he said the most 

lucrative part of their business was the private room that was reserved by pharmaceutical companies four nights a week. The wine 

consumed was unbelievably expensive. The dinners were unbelievably expensive. Now, I have got to tell you, I don’t think most 

Americans think that is about patients first. That is about lobbying. 

What I would ask of PhRMA is if we are going to limit the 

lunches that can be bought for Members of Congress in the context 

of lobbying, shouldn’t we have the same kind of disclosures with 

doctors, because there is a financial relationship there. If, in fact, 

it is about the patient, then PhRMA should have no problem with 

disclosing how much money they are spending on doctors in terms 

of recreational time. 

I am not talking about a member of the pharmaceutical industry 

visiting an office and dropping off some sample packs. I am talking 

about golf. I am talking about trips. I am talking about dinners. 

I am talking about expensive wine. Why in the world would we 

allow that to go on without the public and the patients knowing 

that is going on? 

Ms. POWELL. Senator McCaskill, under the PhRMA code, as it 

was issued in 2002, expensive dinners, wine, golfing trips, sporting 

events are inconsistent with the PhRMA code. They are inconsistent with the inspector general’s description of the guidance for 

the pharmaceutical industry. They are inconsistent with the requirements of various individual company compliance and ethics 

codes. 

I would, with all due respect, suspect that there has been some 

change in your brother’s experience in the restaurant in recent 

years, because I know that there have been changes in the kinds 

of behaviors. Pharmaceutical representatives, when they are buying meals for physicians, are buying them in a place where it is 

85

quiet, and they can focus on communication of information. I don’t 

believe that there are lots of examples of the type you describe, and 

if there are, I would certainly encourage you to forward them to the 

companies involved, because I think those are now inconsistent 

with both the AMA and the PhRMA code. 

Senator MCCASKILL. So they are not allowed to buy alcohol for 

doctors anymore? 

Ms. POWELL. The code says that they may buy a meal in a reasonable setting at a reasonable price——

Senator MCCASKILL. That wasn’t my question. 

Ms. POWELL [continuing]. Which I would——

Senator MCCASKILL. Are they allowed to buy alcohol for doctors 

anymore, yes or no? 

Ms. POWELL. Our code does not explicitly go to that level of detail——

Senator MCCASKILL. So they can? 

Ms. POWELL. If a company were to decide that a glass of wine 

was reasonable, yes, I think they could. But the purpose of the 

interaction would be communicating information to the physician, 

and that would more likely happen in a setting where you didn’t 

have either food or alcohol, or perhaps you were bringing pizza so 

that not only the physician, but the nurse practitioner, who is actually dealing with the patient and telling the patient how to use the 

medicine, knows what information needs to be conveyed to the patient. 

Senator MCCASKILL. I just don’t have a sense that the enforcement—I mean, I know, Dr. Sade, that the AMA has done some in 

this area. But there is, I think, out there a real perception, and—

as we do here in this body. We fight perception sometimes, not reality. 

I don’t think that lobbyists buying lunch for any individual congressman is necessarily polluting the process. But what has happened is because of abuses over the years and because of the prevalence of that kind of activity, we are now moving to cutoff that kind 

of activity and, therefore, doing something about the perception. 

I just think that your industry has got your head in the sand if 

you think you have turned the corner on this, because I don’t believe, in terms of the public’s perception, that you have at all. 

Mr. SADE. If I may comment——

Senator MCCASKILL. I am sorry. We have a vote, and——

The CHAIRMAN. I will give you 30 seconds, so go ahead, Dr. Sade. 

Mr. SADE. OK, a 30-second comment. 

Over the last 4 years, since the PhRMA code went into effect, we 

in my medical school have noticed a distinct change in the relationship of pharmaceutical representatives and physicians. Expensive 

dinners never have taken place all that much. Yes, they do take 

people to dinner, but they are always at modest prices and at restaurants in which actual real educational programs take place. 

So I think that the perception lags the reality in this case. The 

perception will change when the reality becomes more obvious. 

Senator MCCASKILL. Thank you. 

Ms. POWELL. Senator McCaskill, we are working to educate not 

only our company sales representatives and, with the AMA physicians, but trying to change the perception. I agree with you that 

86

there is a perception problem, but it is one we are working very 

hard to try and change. 

Senator MCCASKILL. OK. Thank you. 

Anyone who has anything they want to add, I am sure the Chairman will allow them to submit it to the record. 

The CHAIRMAN. Thank you so much, Senator McCaskill. 

Senator MCCASKILL. Thank you, Senator. 

The CHAIRMAN. We thank our witnesses. You shed a lot of light 

on the issue and the topic, and it is really important. 

We thank the first panel, also, and you can all look forward to 

some progress on this matter. 

So thank you for being here. 

Mr. SADE. Thank you very much. 

[Whereupon, at 12:16 p.m., the Committee was adjourned.] 

(87)

A P P E N D I X 

DR. KASSIRER RESPONSES TO SENATOR KOHL’S QUESTIONS

Question. Four years ago, the Office of the Inspector General at the Department 

of Health and Human Services issued ethics guidelines, in an effort to enforce its 

mandate to investigate and prosecute illegal kickbacks to physicians from drug companies. Do you think these guidelines have been effective in curbing ethical conflicts? 

Answer. In a highly unfortunate action, the Office of the Inspector General failed 

to take an opportunity to strengthen conflict of interest guidance. It merely accepted 

the recommendations of PhRMA and the American Medical Association. In my opinion, these recommendations are lax. They continue to allow gifts and meals as well 

as participation by physicians in industry speaker’s bureaus and consultations on 

marketing issues. Since their pronouncements in 2002, there have been no apparent 

actions by the OIG on this issue. If these ethical conflicts are to be curbed, the OIG 

will have to promote new, more stringent guidance. 

Question. The voluntary guidelines put into place by both the medical industry 

and pharmaceutical industry several years ago have done little to curb the excessive 

marketing to physicians. In fact, the problem seems to be getting worse. Since the 

guidelines were adopted, drug industry spending on physician marketing has increased roughly $7 billion. If the voluntary guidelines were mandatory and they 

were properly enforced, would that be a good first step in cracking down on the 

problem? 

Answer. No. Because the voluntary guidelines of the ‘‘medical industry’’ and the 

pharmaceutical industry are so deficient, even making them mandatory would have 

little effect. 

Question. We’ve heard testimony about efforts to tighten ethical guidelines in 

states, hospitals, and universities around the country, for example the University 

of Wisconsin Hospital banned free samples outright in 2001. What role should the 

federal government play in limiting these conflicts of interest and the troubling perceptions that they cause? 

Answer. Free samples are ideally used for patients who cannot afford them, but 

they often get into the wrong hands. Nurses, technicians, and doctors often use 

them. In addition, free samples are fundamentally marketing gimmicks, allowing 

physicians to familiarize themselves with the newest and most expensive drugs, and 

then to prescribe them. I believe all free samples should be sent to a central repository and given out by a voucher method to those who would benefit most from them. 

The federal government could promote this practice. 

Question. At the hearing, Dr. Lurie recommended a national disclosure law to provide transparency of gifts and payments physicians have received from drug companies, do you agree with his recommendation and would disclosure of these gifts and 

payments be an important first step in eliminating these conflicts of interest? 

Answer. In my testimony, I agreed that a federal registry would be valuable, at 

least in identifying the physicians who receive the largest payments from industry. 

But a registry alone is not sufficient. We must have data that includes the industry 

money that goes to professional organizations and lay organizations, not just individual doctors. We need information on what influence industry money has on medical organizations. 

Question. After hearing the testimony of Dr. Rosenthal, that these countless gifts 

and financial conflicts of every kind have caused a rift in his corner of the medical 

profession. At least some of his colleagues appear to be fed up with the negative 

effects that this money is having upon medical research. Do you perceive any evidence of a backlash or revulsion by younger physicians or medical students against 

accepting gifts, grants, trips, and honoraria of every description? 

Answer. The American Medical Student Association (no connection to the AMA) 

has taken a strong stand against students accepting gifts and food from industry. 

88

A Web site by New York physician Bob Goodman (www.nofreelunch.org) has taken 

a similar stand, and scattered across the country are students who regularly eschew 

free gifts.

89


39865.053
90


39865.054
91


39865.055
92


39865.056
93


39865.057
94


39865.058
95


39865.059
96


39865.060
97


39865.061
98


39865.062
99


39865.063
100


39865.064
101


39865.065
102


39865.066
103


39865.067
104


39865.068
105


39865.069
106


39865.070
107


39865.071
108


39865.072
109


39865.073
110


39865.074
111


39865.075
112


39865.076
113


39865.077
114


39865.078
115


39865.079
116


39865.080
117


39865.081
118


39865.082
119


39865.083
120


39865.084
121


39865.085
122


39865.086
123


39865.087
124


39865.088
125


39865.089
126


39865.090
127

RESPONSES TO SENATOR KOHL’S QUESTIONS FROM PETER LURIE

Question. In your testimony, you recommend a national disclosure law to provide 

transparency of gifts and payments physicians have received. Who should administer this program and be responsible for enforcing it? 

Answer. We recommend that the database of payments to physicians be maintained by the Department of Health and Human Services (DHHS). The agency already has experience with a similar national database, the National Practitioner 

Data Bank. Moreover, the increased expenditures on drugs that ensue from the industry’s heavy reliance upon marketing are borne by the Medicaid and Medicare 

programs, both of which are also housed under DHHS. We would urge stiff penalties 

for instances of non-compliance with any reporting requirement. 

Question. Additionally, some states have exempted certain things, such as drug 

samples or gifts under $100. Do you think certain gifts or payments should be exempted from disclosure? 

Answer. We believe that, as long as the nature of the payments is clearly part 

of each disclosure, the public is quite capable of distinguishing between, for example, payments for research and those for elaborate meals. Let the information be 

made public, in as detailed a fashion as is feasible, and let the public decide for 

itself what it deems objectionable. Sample, in particular, should not be exempted 

from disclosure, as these are the single largest item in pharmaceutical company expenditures on promotion. As noted in our testimony, three of the five states with 

disclosure laws (District of Columbia, Maine and Vermont) exempt payments under 

$25 and the remaining two (Minnesota and West Virginia) exempt those under 

$100. We would favor as low as exemption as possible. In Vermont, for example, 

only 23% of payments over $25 exceeded $100 (Ross, et al. JAMA 2007;297:1216–

23), so high exemptions can result in the loss of information about the majority of 

payments. 

Question. The voluntary guidelines put into place by both the medical industry 

and pharmaceutical industry several years ago have done little to curb the excessive 

marketing to physicians. In fact, the problem seems to be getting worse. Since the 

guidelines were adopted, drug industry spending on physician marketing has increased roughly $7 billion. If the voluntary guidelines were mandatory and they 

were properly enforced, would that eliminate the problem? 

Answer. The underlying purpose of the medical and pharmaceutical industry 

guidelines on gifts to physicians was to preempt any federal or state legislation. We 

therefore have no confidence that these codes will ever be enforced. We would suggest that the Senate Special Committee on Aging ask the industries to list all the 

enforcement actions they have taken under their codes to date.

128


39865.091
129


39865.092
130


39865.093
131


39865.094
132


39865.095
133


39865.096
134


39865.097
135


39865.098
136


39865.099
137


39865.100
138


39865.101
139


39865.102
140


39865.103
141


39865.104
142


39865.105
143


39865.106
144


39865.107
145


39865.108
146


39865.109
147


39865.110
148


39865.111
149


39865.112
150


39865.113
151


39865.114
152


39865.115
153


39865.116
154


39865.117
155


39865.118
156


39865.119
157


39865.120
158


39865.121
159


39865.122
160


39865.123
161


39865.124
162


39865.125
163


39865.126
164


39865.127
165


39865.128
166


39865.129
167


39865.130
168


39865.131
169


39865.132
170


39865.133
171


39865.134
172


39865.135
173


39865.136
174


39865.137
175


39865.138
176


39865.139
177


39865.140
178


39865.141
179

Æ


39865.142