Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - September 06, 2007)

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By Mr. GRASSLEY (for himself, Mr. KOHL, Mr. KENNEDY, Mrs. MCCASKILL, Mr. SCHUMER, and Ms. KLOBUCHAR):

S. 2029. A bill to amend title XI of the Social Security Act to provide for transparency in the relationship between physicians and manufacturers of
drugs, devices, or medical supplies for which payment is made under Medicare, Medicaid, or SCHIP; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, a month ago I outlined an important issue affecting all Americans who take prescription drugs or use medical devices--the need for greater transparency in the money that drug and device companies hand out to doctors. Today, I am pleased to introduce the Physician Payments Sunshine Act, along with Senator Kohl, chairman of the Special Committee on Aging. This legislation will bring much needed transparency to the financial relationships that exist between the drug and device industries and doctors.

There is no question that the drug and device industries have an intricate network of financial ties with practicing physicians. These financial relationships can take many forms. They can include speaking honoraria, consulting fees, free travel to exotic locations for conferences, or funding for research. Drug and device companies spend billions and billions of dollars every year marketing their products. A good amount of this money goes directly to doctors in the form of these payments.

This practice, and the lack of transparency around it, can obscure the most important question that exists between doctor and patient: What is best for the patient?

As the editorial board of the Des Moines Register wrote recently, and I quote, ``Your doctor's hands may be in the till of a drug company. So how can you know whether the prescription he or she writes is in your best interest, or the best interest of a drug company?'' That is an excellent question. Currently, the public has no way of knowing whether their doctor has taken payments from the drug and device industries, and I intend to change that--not just for Iowans but for all Americans.

Payments to a doctor can be big or small. They can be a simple dinner after work or they can add up to tens of thousands and even hundreds of thousands of dollars each year. That is right--hundreds of thousands of dollars for one doctor. It is really pretty shocking.

Companies wouldn't be paying this money unless it had a direct effect on the prescriptions doctors write, and the medical devices they use. Patients, of course, are in the dark about whether their doctor is receiving this money.

The Physician Payments Sunshine Act sheds light on these hidden payments and obscured interests through the best disinfectant of all: sunshine. This is a short bill, and a simple one. This bill requires drug and device manufacturers to disclose to the Secretary of Health and Human Services, on a quarterly basis, anything of value given to doctors, such as payments, gifts, honoraria, or travel. Along with the money, these companies will have to report the name of the physician, the value and the date of the payment or gift, its purpose, and what, if anything, was received in exchange. This bill then requires the Department of Health and Human Services to make the information available to the public through a searchable web site.

And this bill has some teeth, too. If a company fails to report, the Physician Payments Sunshine Act imposes a penalty ranging from $10,000 to $100,000 for each violation.

Many States are ahead of the curve on this and have passed, or are currently considering, similar measures. In 1993, Minnesota required the Nation's first public disclosure of gifts and payments from wholesale drug distributors. Vermont passed a similar law in 2003, although much of the information is not publicly available. More recently, the District of Columbia, Maine, and West Virginia have followed suit in requiring disclosure, though not all make the information available to the public through a web site. The General Assembly in my home State of Iowa may soon be requiring disclosure as well.

But this kind of information shouldn't be available only to Americans who happen to be lucky enough to live in a State already addressing this problem. On the contrary, this information should be accessible to all Americans across the country and it should be updated in a timely manner. I propose to my colleagues that now is the time to act.

I realize that some critics, including many of the drug and device companies, are going to say that creating this sort of national database is too time consuming and too expensive. I can hear the complaints already. But let me remind you again--the drug companies are already reporting their payments to doctors in Minnesota and other States. Companies already have this information available. We aren't requiring them to go out and obtain it--we are just asking them to share it with the American people.

Perhaps even more telling is that at least one industry leader has taken the goal of increased transparency into its own hands. Although it is not making its payments to doctors publicly available, Eli Lilly has taken important steps to meet the public's demand for increased sunshine. In response to my investigation of drug company payments for continuing medical education, Eli v Lilly voluntarily created a web site that details payments they make to organizations like patient groups and hospitals. I commend Eli Lilly for taking the lead on that issue, and I look forward to working with them on my latest effort.

This bill is careful not to burden small businesses--it applies only to companies with annual revenues over $100 million. It is the largest companies who are driving this practice, and for whom disclosure would be least burdensome.

Further, during a meeting on a separate matter with officials from Glaxo Smith Kline in early August, my staff brought up the idea of drug companies reporting payments to physicians. I am happy to say that Dr. Moncef Slaoui, the chairman of research and evelopment for Glaxo Smith Kline, said that he was also interested in a little sunshine. In fact, here are his exact words: ``We're happy for transparency.'' I would like to commend Dr. Slaoui for his comments and I look forward to working with him and leaders at other companies on this bill.

It is not only industry leaders who are leading the way on the issue of increased transparency--some of America's best medical schools are taking steps to prevent conflicts of interest among their physicians. In fact, the Yale University School of Medicine, the University of Pennsylvania, and the Stanford University Medical School have gone so far as to prohibit certain gifts and payments altogether.

So let me be clear. This bill does not regulate the business of the drug and device industries. I say, let the people in the industry do their business. After all, they have the training and the skill to get that job done. Just keep the American people apprised of the business you are doing and how you are doing it. Let a little bit of sunshine in to this world of financial relationships--it is, after all, the best disinfectant.

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