by Charles Ornstein and Tracy Weber, ProPublica
Long before the rest of the country cared, Minnesota took aim at the pharmaceutical industry.
In 1993 it passed a novel law: If drug companies paid any of the state’s health providers to push their pills, the money had to be publicly reported.
Two decades later, the federal government is poised to follow suit, promising a new era of openness.
But a ProPublica analysis of drug company disclosures in Minnesota provides a cautionary lesson for the new federal plan, which will require drug and medical device companies to report all payments to U.S. physicians in 2013: The information submitted may not be accurate.
To vet Minnesota’s reports, ProPublica compared them to its Dollars for Docs database, a compilation of speaking fees and consulting payments to physicians and other health providers nationwide by seven drug companies since 2009.
Cases like that of St. Paul, Minn. pain specialist Todd Hess turned up.
Minnesota’s website shows that Hess received $364,828 last year from four companies — far more money than any of the state’s other physicians.
But those fees understated what at least one of the companies reported on its own website (and on Dollars for Docs). Eli Lilly and Co. (NYSE:LLY) told Minnesota it had paid Hess $67,353 in 2009 to give speeches in favor of its pain pill Cymbalta. The company reported Hess made $74,050 during the same period.
The Minnesota official charged with overseeing the drug company data said he hadn’t known about the discrepancy—and wouldn’t unless someone flagged him. The law requiring the disclosures provided no resources to audit their accuracy, said Cody Wiberg, executive director of the state’s pharmacy board, which collects the information.
Contradictory Reports From Drug Firms
Experts who study physician-industry relationships say the accuracy of this information is important. Based on the disclosures, patients or employers may wrongly believe a physician has greater—or lesser—ties to a drug company.
ProPublica found multiple examples in which drug firms reported either inaccurate or inappropriate payment information to Minnesota.
Pfizer, for example, told the state it paid Dr. Randy Schapiro $1,770 last year. But on the firm’s website, it reported spending $43,827 on him in the second half of 2009 alone.
And Wyeth, now a Pfizer Inc. (NYSE:PFE) subsidiary, reported payments to individual doctors that actually went to their institutions for clinical research. That error landed transplant surgeon Arthur Matas at the top of the payments heap in Minnesota, earning $500,000 in 2009. The money really went to the University of Minnesota, according to Matas.
Minnesota records show Matas personally received just $6,190 in 2009 for consulting for Bristol-Myers Squibb Co. (NYSE:BMY) and speaking to the Mexican National Transplant Congress on behalf of Genzyme Corp. (NSDQ:GENZ).
Representatives of Wyeth, Pfizer and Lilly said they were unaware that their reports contradicted one another until contacted by ProPublica.
Wyeth submitted a revised report to Minnesota removing Matas and more than a dozen other physicians from the records because the payments did not go to them personally.
Pfizer has submitted a revised report listing Schapiro’s pay last year as $96,889—more than 50 times what it initially said. A Pfizer spokeswoman said her company found internal problems that led to the inaccurate report.
A Lilly spokesman said his company also would amend its Minnesota report. Some of the discrepancies ProPublica found, like Hess’, are the result of problems with the company’s system for tracking payments, spokesman Scott MacGregor said in an e-mail.
Hess and Schapiro, like other Minnesota physicians interviewed, said they were unaware of the discrepancies—and hadn’t looked at the latest disclosures. They said the media makes a bigger deal about potential conflicts of interest than patients do.
“If it’s cleaned up, then I don’t personally have any problems with people seeing the numbers,” said Schapiro, a specialist in multiple sclerosis who is now retired and living in Colorado but who still does speaking and consulting.
Schapiro said the doctors paid by pharmaceutical companies are “leaders in their fields,” and patients should want to see their physician among them. “If their doctor is not on the list,” he said, “maybe they should look for a different doctor.”
Hess, the St. Paul pain physician, said his patients aren’t concerned about his speaking fees. The media is lumping together educational speaking with the excesses of the past, he said, when drug companies showered physicians with gifts and free trips.
“This is a mountain-molehill thing,” he said. “I know the problems of the past. I know what pharma has done to change those. People just can’t get over the past.”
A Pitched Battle To Pass Law
Minnesota’s experiment began in the early 1990s as an answer to complaints to the state attorney general’s consumer division.
Patients were calling, concerned their doctors were steering them to higher-cost medications they couldn’t afford. Physicians were reporting the pressure they were getting from the pharmaceutical companies and “the bonanza” of trips, fancy dinners and other inducements, recalled Matt Entenza, then an assistant attorney general.
Entenza’s office suggested solutions to Minnesota legislators. It was a pitched battle from the start, he said. Entenza said he and a colleague faced a small army of lobbyists for the drug companies, physicians and business organizations. A provision requiring the disclosures was deleted from a healthcare bill in a Senate committee after it passed the House.
In an “11thhour maneuver on the floor,” then-state Sen. Bill Luther (D-Minn.) succeeded in getting it added back to the bill as an amendment, said Entenza, now a senior fellow at Minnesota 2020, a public policy think tank in St. Paul.
Luther, who later served in Congress for eight years, said the bill was “very controversial, and I had to use my political position” to get it passed.
Years later, Luther learned that the drug company reports had been simply filed away. Only after researchers and others pressed to see them were they put on the website of the state’s pharmacy board in 2006.
Wiberg, the board’s executive director, said his agency was an unusual choice as the home of the disclosures. The pharmacy board oversees drugs, pharmacies and pharmacists, not money or physicians, he said.
Today, the state posts reports covering about 900 physicians, nurse practitioners, physician assistants and veterinarians and includes payments from companies of every size. It does not put them in a searchable database but requires users to click through the individual reports of 80 companies to find their doctors.
ProPublica has combined Minnesota’s 2009 reports into one database
National Law More Expansive
Several other states have followed Minnesota’s lead and required companies to report such payments, but not all make the information public.
Vermont passed a similar law in 2001, but until this year allowed companies to keep the names of speakers and consultants confidential as “trade secrets.” Massachusetts recently published its first list of payments to doctors there.
The federal law, known as the Physician Payments Sunshine Act, is more expansive than Minnesota’s effort in some respects. The act covers both drug companies and medical device manufacturers, while Minnesota’s law is limited to pharmaceuticals. It also calls for a searchable database, which will make looking up a doctor easier.
But as in Minnesota, the federal law does not require auditing. It does allow for various fines if a company reports incorrectly or not at all. Inadvertent failures to report can result in penalties of $10,000 for each instance up to $150,000 a year. Intentional failure to report can lead to fines of up to $100,000 and a maximum of $1 million annually.
Unlike in Minnesota, the federal legislation was embraced by some pharmaceutical companies worried about disparate state laws that would have set up different requirements.
Dr. Joseph Ross, an assistant professor of medicine at Yale School of Medicine who has studied Minnesota’s disclosure law, said he was surprised to learn of the discrepancies. He said the companies are quickly learning that there’s an intense interest on how much they pay physicians.
“You just hope that going forward they do a better job and take it as seriously as possible,” he said.
See ProPublica’s database containing the Minnesota 2009 drug company payments reports. Read ProPublica’s ongoing investigation, Dollars for Docs.
A version of this story ran Dec. 6 in the Minneapolis Star-Tribune. Content provided through Creative Commons licensing.