The federal government announced Monday that pharmaceutical, medical device, and other healthcare firms will have to disclose their financial relationships with doctors. Research shows that doctors who receive financial or other compensation from such companies treat patients differently and ultimately raise the cost of care. That’s good news for patients, though the industry will undoubtedly be affected.
In a way, pharma and medical device firms already knows how to deal with such regulations. “Variations of this type of regulation have been around for a while,” said Lakshman Krishnamurthi, a professor of marketing, “particularly in the area of Continuing Medical Education where sponsoring drug companies must report their relationship with the medical presenters.”
But this new requirement, he said, “goes further.”
The majority of internists and general practitioners will probably not be affected, Krishnamurthi said, but specialists like oncologists, psychiatrists, and orthopedic surgeons who have closer relationships with pharma and medical device companies will likely notice some changes.
More likely to feel the heat of the new regulations are the companies themselves. “The rep picking up lunch for the office staff to chat up the receptionist or the nurse will not be able to do so, or will have to report it if he/she does so,” he said. “But this is small fry. The bigger question is the effect on consulting and research interactions between doctors and the drug/device industry. Yes, there can be abuses but one would expect the vast majority of these interactions to have positive effects on discovery, drug interactions, and use of drugs.”
The overall financial impact is also less clear, Krishnamurthi noted. Companies will have to generate and disclose reams of data to comply with the new laws. “This will not be costless,” he said. “These costs will be passed down. So, there can be unintended consequences of the increased reporting requirements in the form of higher prices.”
“The counter is that the companies will not be spending the monies in the first place to avoid the reporting requirements. There will be some reductions, but if the companies believe all—or most—of the spending is legitimate anyway, they will continue to spend the money.”