Statements On Introduced Bills And Joint Resolutions

Floor Speech

By Mr. GRASSLEY (for himself, Mr. K OHL, and Ms. KLOBUCHAR):

S. 301. 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, biologicals, or medical supplies for which payment is made under Medicare, Medicaid, or SCHIP; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, I rise to introduce a bill today. Over the past several years, I have worked to establish greater transparency in the financial relationships and financial disclosure requirements between physicians and manufacturers of drugs, of biologics, and medical devices.

In the last Congress, the 110th, Senator Herb Kohl of Wisconsin and I introduced what is entitled the Physician Payments Sunshine Act, which is intended to bring some much-needed transparency to these relationships between physicians and manufacturers.

To explain why this bill is so important, let me point to a number of investigations I have conducted in the d epth and scope of these relationships between physicians on the one hand, and manufacturers of drugs, biologics, and medical devices on the other hand.

My findings to date are troubling and reveal significant undisclosed financial ties between physicians and industry. Some examples: These relationships, at times, resulted in annual incomes of over $1 million to individual physicians from just one company.

Another example. My investigations determined that several prominent physicians at major universities had failed to disclose large sums of money to their research institutions. That was despite institutional as well as Federal requirements that these reportings take place.

This was also despite these physicians' involvement with Federal research study products made by the various drugmakers with whom they have financial relationships.

This Federal research has involved billions of dollars in taxpayers' money to fund this research.

My oversight has confirmed the need for a consistent , easy-to-understand national system of disclosure, as opposed to a patchwork of disclosure requirements at State and institutional levels, although I compliment States that have such laws on the books.

Today I am here to introduce, along with Senator KOHL, the Physician Payment Sunshine Act of 2009. The Physician Payment Sunshine Act would require that manufacturers of drugs, biologics, and medical devices disclose, on an annual basis, any financial relationships that they have with physicians. T hat information would be posted online by the Secretary of Health and Human Services in a format that is searchable, that would be clear and easy for the public to understand.

Whether the relationship is as simple as buying a doctor's dinner or as complex as a multimillion-dollar consulting arrangement, these relationships may affect prescribing practices and may influence research.

More importantly, they can obscure the most important issue existing between doctors and patients, and that is a quest ion every doctor and patient has to consider: What is best for the patient?

This legislation Senator KOHL and I are introducing today closely parallels the version I circulated last year and follows some recent MedPAC recommendations.

MedPAC recommended a lower annual reporting threshold of $100--in the previous bill, it was higher--no de minimis exceptions for payments and a tighter preemption provision.

MedPAC will publish their final recommendations in their March report to Congress. I wi ll take those recommendations into consideration and intend to continue pursuing policies that go beyond the transparency in health care than even the existing bill does.

There is a greater need for this legislation, and that greater need is demonstrated by a witness testifying at the Finance Committee hearing on health reform last year that industry and physician relationships are pervasive.

Drug and device companies spend billions and billions every year on marketing, product development, and rese arch, and much of this money goes directly to doctors.

Last year, the Des Moines Register wrote:

Your doctor's hand may be in the till of a drug company. So how can you know whether the prescription he or she writes is in your interest or the best interest of a drug company?

That is a pretty good question that we all ought to be looking at.

Many of these relationships are beneficial and appropriate. That is why we don't outlaw any of these relationships. What we do is make them be reported. And some of these should be reported on a more regular basis than they are even without this legislation.

Physicians play important roles in inventing and refining new devices or in conducting medical research. They are hired to educate other doctors. We don't do anything in this legislation to end those professional relationships.

But as is often the case, a few bad apples can spoil the whole barrel. It is clear Congress needs to act now to pass disclosure legislation.

Currently, drug and device makers have to comply with a number of State requirements, each State giving its own definition and own rules.

Patients as well as other doctors have no way to learn about these important relationships. This information should not only be available to those few Americans lucky enough to live in a State already requiring some level of disclosure.

Even in the States currently requiring disclosure, most do not apply that law to medical device companies. Some States do no t even make public the information they collect, which is of little value to patients who might want to know if their doctors have a relationship with a drug company or a medical device company about which they ought to know.

Now, this bill isn't adding new burdens to the industry. By creating a central reporting system, the legislation actually relieves burdens. In addition, I am hopeful that this bill will enjoy the same wide-ranging support as the prior legislation that Senator KOHL and I put i n during the 110th Congress.

I want to be clear--and this is the second time I am being clear on this point--this legislation does not regulate the business of drug and device companies. Let the people in industry do their business since they have the training and the skills to get the job done. But keep the American people apprised of the business you are doing and how you are doing it. After all, what is at risk isn't merely private interest but the health and well-being of all Americans who depend upon the drugs and medical devices to sustain and to improve their lives.

In this process of what we call transparency, in this process that we call sunshine legislation, I often quote from an opinion of Justice Brandeis, I think in 1914, where he said: ``Sunlight is the best disinfectant.'' And that is what Senator Kohl and I are aiming to accomplish with this Physician Payment Sunshine Act, just a little sunlight so the public is better informed.

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