Reforming Pharmaceutical Industry-Physician Financial Relationships: Lessons from the United States,France,and Japan

This work was developed as part of a broader study of conflicts of interest in medicine. See, Rodwin M. A. , Conflicts of Interest and the Future of Medicine: The United States, France and Japan (New York: Oxford University Press, 2011).

French Public Health Code [C. Sant. Pub.] art. L1110–3 (Fr.) (2010).

42 U.S.C. § 1320a-7a (2010).

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Décret n. 2007 454 du 25 mars 2007 relatif aux conventions et aux liens unissant les membres de certaines professions de santé aux entreprises et modifiant le code de la santé publique (dispositions réglementaires) [Decree of March 25, 2007 regarding fee agreements and ties between certain health care professions and private firms and modifying the Code of Public Health (regulations)].

Prise de position et premiers commentaires concernant l'article 47 DMOS du 27 Janvier 1993. [Common position and first commentaries concerning article 47 of Diverse Measures for Social Order of January 27, 1993] Nouvel Article L. 365–1 du Code de la Santé Publique [New Article L. 365–1 of the Public Health Code] Conseil National de l'Ordre des médecins, Conseil National de l'Ordre des pharmaciens, Syndicat National de l'industrie pharmaceutique, 21-04-1993, 21 March 1993.

Pascal J. Riou F. Chaperon J. , “Difficultés de Mise en Place et Enjeux Institutionnels de la Formation Continue Des Médecins Libéraux,” [Difficulties of Institutional Implementation of Continuing Medical Education for Self-Employed Physicians] Santé Publique 12, no. 2 (2001): 177–189. Matillon Y. LeBoeuf D. Maisonneuve H. , “Defining and Assessing the Competence of Health Care Professionals in France,” Journal of Continuing Education in the Health Professions 25, no. 4 (2005): 290–296; Maisonneuve H. , “Medical Education and the Physician Workforce of France,” Journal of Continuing Education in the Health Professions 25, no. 4 (2005): 290–296; d'Autume C. Postel-Vinay D. , Mission Relative a L'organisation Juridique, Administrative et Financière de la Formation Continue des Professions Médicales et Paramédicales [Report on the Organization of Legal Aspects, Administration and Financing of Continuing Education for Medical and Paramedical Professions] Paris: Inspection Générale Des Affaires Sociales, 2006, Rapport no. 2006–02, available at <http://www.ladocumentationfrancaise.fr/rapports-publics/064000180/index.shtml> (last visited September 14, 2011).

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Id.

Burrows J. G. , Organized Medicine in the Progressive Era: The Move Toward Monopoly (Baltimore, MD: Johns Hopkins University Press, 1977); Schwartz J. L. , “Early History of Prepaid Medical Care Plans,” Bulletin of the History of Medicine 39, no. 5 (1965): 450–475.

Wooodhouse G. A. , past chairman of the AMA Judicial Council, in testimony before the U.S. House Committee on Energy and Commerce, Subcommittee on Health, Physician Dispensing of Drugs: Hearings on H.R. 2093 (22 April 1987): At 15, 105–124; Rodwin M. A. , “The Organized American Medical Profession's Response to Financial Conflicts of Interest: 1890–1992,” Millbank Quarterly 70, no. 4 (1992): 703–741.

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Ameringer C. F. , The Health Care Revolution: From Medical Monopoly to Market Competition (Berkeley: University of California Press, 2008); In re American Medical Ass'n, 94 F.T.C., 701, (1979). For the FTC order, see [1979–1983 Transfer Binder] Trade Reg. Rep. (CCH) 21,955, 418–19.

U.S. Senate, Subcommittee on Health and Committee on Labor and Public Welfare, Examination of the Pharmaceutical Industry: Hearings on Section 3441 and Section 966, Part 3, March 8, 1974, 12, 13, 1974, Testimony of Laubach Gerald D. , President of Pfizer, at 793–866; excerpts from gift catalogues, at 1014–1037.

Id., at 1348, 1353–1354, 1361.

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Telephone interview by author with Orentlicher David , former counsel, AMA Council on Ethical and Judicial Affairs, December 12, 2006.

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U.S. Senate, Committee on Labor and Human Resources, Hearings on Advertising, Marketing and Promotional Practices of the Pharmaceutical Industry, 101st Cong., 2nd Session, December 11 and 12, 1990, at 174–175.

See AMA CEJA, supra note 24.

Kusserow R. P. , Promotion of Prescription Drugs through Payment and Gifts: Physicians' Perspectives (Washington, D.C.: OIG-DHHS, 1992); Goldstein A. O. , “Gifts to Physicians from Industry,” JAMA 266, no. 1 (1991): 61; Page L. , “Are Goody Grab Bag Days Over? Dermatologists Eye New Ethics,” American Medical News 35, no. 5 (1992): 30–31.

Okie S. , “AMA Blasted for Letting Drug Firms Pay for Ethics Campaign,” Washington Post, August 30, 2001, at A3.

U.S. Department of Health and Human Services, Office of Inspector General (OIG), “Draft OIG Compliance Program Guidance for Pharmaceutical Manufacturers,” Federal Register 67, no. 192 (2002): 62057–62067.

PhRMA's comments on the draft, submitted by Sidley Austin Brown and Wood LLP, Comment No. 119, obtained under the Freedom of Information Act.

Comments from 19 pharmaceutical companies on the draft, submitted by Arnold & Porter and PriceWaterhouseCoopers LLP, obtained under the Freedom of Information Act.

Chimonas S. Rothman D. J. , “New Federal Guidelines for Physician-Pharmaceutical Industry Relations: The Politics of Policy Formation,” Health Affairs 24, no. 4 (2005): 949–960.

Office of Inspector General (OIG), United States Department of Health and Human Services, “Compliance Program Guidance for Pharmaceutical Manufacturers,” Federal Register 68, no. 86 (2003): 23731–23743, at 23737–23738.

Petersen M. , “Vermont to Require Drug Makers to Disclose Payments to Doctors,” New York Times, June 13, 2002, at 1.

A table of state legislation is available at <http://www.ncsl.org/IssuesResearch/Health/2007PrescriptionDrugStateLegislationNCSL/tabid/14423/Default.aspx> (last visited September 6, 2011).

Physician Payment Sunshine Act S.2029, introduced by Grassley Senator Charles (R-IA).

Patient Protection and Affordable Care Act, Section 1128 G (a) Physician Payment Sunshine Act Transparency Reports.

Office of Inspector General, “Draft OIG Compliance Program Guidance, supra note 29, at 62057–62067”; see Chimonas Rothman , supra note 32. AMA comments on the draft, submitted by Maves Michael , executive vice president, obtained via the Freedom of Information Act.

American Association of Electro-diagnostic Medicine, Comment No. 55; American College of Rheumatology; American College of Chest Physicians, Comment No. 87; the Endocrine Society, comment No. 106; American College of Chest Physicians, Comment No. 87; and the Endocrine Society, comment No. 106. All comments were obtained by the author from the Office of Inspector General through the Freedom of Information Act.

U.S. Department of Health and Human Services, Office of Inspector General, “Compliance Program Guidance,” Federal Register 68, no. 86 (May 5, 2003): 23731–23743, at 23738.

For a discussion of CME funding see, Rodwin supra note 18.

ACCME, Updated Standards for Commercial Support: With Back-Ground Rationale and Answers to Questions about Compliance (Chicago: ACCME, 2004), available at <http://www.accme.org/dir_docs/doc_upload/68b2902a-fb73–44d1-8725-80a1504e520c_uploaddocument.pdf> (last visited September 3, 2011); Steinbrook R. , “Commercial Support and Continuing Medical Education,” New England Journal of Medicine 352, no. 6 (2005): 534–535.

ACCME Standard for Commercial Support, 3.2, available at <http://www.accme.org/dir_docs/doc_upload/68b2902a-fb73–44d1-8725-80a1504e520c_uploaddocument.pdf> (last visited September 3, 2011) (emphasis added).

Letter from Max Baucus, Chair, Senate Finance Committee, to Kopelow Murray , ACCME, April 27, 2007, Committee on Finance, United States Senate, 2007, Use of Educational Grants by Pharmaceutical Manufacturer , Prt. 110–21, 110th Cong., 1st Session (April), available at <http://www.arbo.org/cope/SCF%20report%20june%202005.pdf> (last visited September 6, 2011).

Letter from Kopelow Murray , Chief Executive of ACCME to Bucus Max Grassley Charles , Senate Committee on Finance, August 3, 2007, available at <http://www.accme.org/dir_docs/doc_upload/ff745720-2080-496a-bece-2c50b09d4c7c_uploaddocument.pdf> (last visited September 6, 2011) (emphasis added); see also, ACCME, “Policy Updates,” August 24, 2007, available at <http://accme.org/index.cfm/fa/news.detail/news_id/3605f21a-302a-40d1-ab4d-3ceb88087b1a.cfm> (last visited September 6, 2011).

ACCME, “Standards for Commercial Support,” available at <http://www.accme.org/index.cfm/fa/faq.detail/category_id/667b72cf-6277-4317-99f9–1e476b621e76.cfm> (last visited September 6, 2011).

Sugita S. , “A Historical Study of Iyaku-Bungyo (The Separation of the Dispensary from Medical Practice) in Japan,” in Kawakita Y. Sakai S. Otsuka Y. , eds., History of the Doctor-Patient Relationship: Proceedings of the 14th International Symposium on The Comparative History of Medicine – East and West (Tokyo: Ishiyaku EuroAmerica, 1989): 147–164; Rupp K. , Gift-Giving in Japan: Cash, Connections, Cosmologies (Stanford, CA: Stanford University Press, 2003).

Japan Medical Association (JMA), Physician's Ethics Code (Tokyo: JMA, 1951); JMA, Principles of Medical Ethics (Tokyo: JMA 2002). English summary of 25-page text is available at http://www.med.or.jp/english/about_JMA/principles.html (last visited September 6, 2011); “The JMA Guidelines for Physician's Professional Ethics 2008,” Japan Medical Association Journal 52, no. 2 (2009): 75–91.

Act Against Unjustifiable Premiums and Misleading Representations, Act no. 134 of May 15, 1962, as amended October 1, 2007. Fair Trade Commission, Pub. Notice no. 31 of 1991; Fair Trade Commission, Pub. Notice no. 54 of August 11, 1997.

Fair Trade Commission, Fair Competition Code Concerning Restriction on Premium Offers in Ethical Pharmaceutical Drugs Marketing Industry, issued March 10, 1984, revised, October 1, 2007.

Fair Trade Council of the Ethical Pharmaceutical Drugs Marketing Industry, Fair Competition Code Concerning Restrictions on Premium Offers in Ethical Pharmaceutical Drugs Marketing Industry, 1984, as revised in 1997 and 2007; Fair Trade Council of the Ethical Pharmaceutical Drugs Marketing Industry, Enforcement Rules of the Fair Competition Code Concerning Restrictions on Premiums Officers in The Ethical Pharmaceutical Drugs Marketing Industry, 1984 as revised in 1997 and 2005.

In 1993, the JPMA developed three sets of guidelines: (1) Promotional Code of Pharmaceuticals (March 1993, a revision of the 1976 Federation of Pharmaceutical Manufacturer Associations of Japan's Code of Practices for the Promotion of Ethical Drugs; (2) Guidelines on Gift-Giving to Health Care Providers Permissible Under JFTC Rules; and (3) Guidelines on Remuneration for Case Reporting Allowable under JFTC Rules (1993), revised as Promotion Code for Prescription Drugs (May 23, 2008), available at <http://www.jpma.or.jp/english/isuues/pdf/2007code_e.pdf> (last visited September 6, 2011). The JMPA modified its code of conduct again in 2008.

PMAT, Organization Correspondence Contribution Scheme for Academic Society Which Used the Associations as a Focal Point (typescript). Nagayama Osamu , interview by Rodwin Marc , November 12, 2002. Correspondence with Sakabe Takashi , executive secretary to Nagayama Osamu , November 18, 2002. The 2007 data is from correspondence with Morioka Shigeo , June 25, 2008.

Public Health Code [ Sante C. Pub.], L-365, Article 549 and in its revision, L-4113, Article XX.

Act against Unjustifiable Premiums and Misleading Representations, Act no. 134 of 15 May 1962, as amended by Act No. 44 of 30 May 1977.

This distinction is inspired by Bosk's Charles Freidson's Eliot distinction between normal and abnormal errors: Normal errors are technical errors that any physician can make; abnormal errors have a moral component that call the physician's character and judgment into question. Bosk C. , Forgive and Remember: Managing Medical Failure (Chicago: University of Chicago Press, 1979); Freidson E. , Doctoring Together: A Study of Professional Social Control (Chicago: University of Chicago Press, 1984).

Senate investigations found that pharmaceutical industry net profits after taxes from 1958–1959 were 21 percent. U.S. Senate Subcommittee on Antitrust and Monopoly, 1965, 278. Temin Peter analyzed the data from the FTC, SEC, and other studies and concluded that profits after taxes were between 17 percent and 19 percent from 1948 through 1973, see Temin P. , Taking Your Medicine: Dug Regulation in the United States (Cambridge: Harvard University Press, 1980): At 80–82. For other analysis of pharmaceutical industry profits, see Angel M. , The Truth about Drug Companies: How They Deceive Us and What To Do about It (New York: Random House, 2004).