FierceMedicalDevices caught up with Pratap Khedkar, managing principal at ZS Associates, which provides sales and marketing consulting to 18 of the 20 top medical devices companies and many Big Pharma players. He spoke at length about the Sunshine Act, saying the new Open Payments database of payments made to physicians is leading life science companies to "implicitly" coordinate their payments in order to avoid being seen as the big payer to a particular doctor.
Alternatively, companies "might say everybody else is going to this doctor, but we are not, so we should probably try a little harder," he said. "So essentially what's happening is that the extremes are coming back into balance because nobody wants to stand out, but nobody wants to be at the back end either."
"The pharma and device companies have put in place fairly elaborate systems, not just for reporting the data, but for monitoring it," he said.
ZS' analysis of the database shows that median payment to doctors is $95 over 5 months, or about $20 a month. Of the doctors in the database, more than 300,000, or 85%, received less than $500 over 5 months, while 1,512, or 0.4%, received more than $50,000.
Life science companies spent about $150 million on royalty or licensing payments to doctors and slightly less on consulting fees between August and December 2013, according to ZS. Payments for research and food and beverage were around $100 million, while travel and lodging payments stood at around $75 million. Finally, education payments were less than $50 million, according to ZS.
Note that the actual payments are higher, because about one-third of doctors were not included in the Centers for Medicare & Medicaid Serves database due to a data glitch. "The caveat is if the government changes things, these numbers could change," Khedkar said.
The Sunshine Act could have "a chilling affect" on doctors, by, for example, deterring them from attending a speaking event where food is provided because they don't want to be listed in the database, he said. "Are they going to say 'You know what, the patient is going to discover me in the database. They don't have any context [about the payment], I'd rather not be in the database'?" he asked, adding that it is too early to determine if patients are using the website because it has only been operational since Sept. 30.
ZS tracked payments to doctors among companies with a Corporate Integrity Agreement (CIA) with the federal government and found that the spend has been declining between 2009 and 2012, Khedkar said.
In addition to the missing data, industry is worried about about the lack of context explaining the information on the website. "I don't think enough context has been created yet," Khedkar said. AdvaMed encourages users of the Open Payment website to visit the "Open Payments Data in Context Tab" and hopes it can be made more easily accessible to users as the site evolves, according to a statement.
CMS recently tightened the reporting requirements and required devices companies to disclose the brand name of relevant devices, in line with the requirement for drugs and biologics.
- here's more about ZS Associates