Crackdown on Kickbacks: Will pharma and clinical trials pay the price?

Crackdown on Kickbacks

Will pharma and clinical trials pay the price?

A doctor in New Jersey could lose his license because of being paid by a biopharma company for writing prescriptions for a powerful drug. There could be additional repercussions as the state is considering a law to put a ceiling on biopharma company payments to physicians. California also wants to stop most pharma payments to doctors, including speaking fees at dinners.

Where will it end? Will it affect payments for clinical trials? The Association of Clinical Research Organizations (ACRO) thinks it might.

After recent investigations into Insys’ promotional tactics for the powerful opioid Subsys, the New Jersey Attorney General’s office has proposed a state regulation, “Limitations on and Obligations Associated with Acceptance of Compensation from Pharmaceutical Manufacturers by Prescribers,” that would cap a physician's compensation from drug companies at $10,000 per calendar year. It would include speaker fees, participation on advisory boards and consulting arrangements.

ACRO Executive Director Doug Peddicord, Ph.D., is concerned that the proposed $10,000 ceiling could be applicable to clinical trial payments, most of which are intended to pay for medical supplies, tests and laboratory services, as well as compensation to patients and staff members. He believes that the per-patient cost of a breast or prostate cancer clinical trial is between $10,000 and $20,000.

John Hubbard, ACRO president and CEO of CRO Bioclinica, said that ACRO “thought it extremely important to request that New Jersey revise the proposed regulation to exclude such payments,” according to an October 26 article by Angus Liu in Fierce Biotech (“Will New Jersey’s crackdown on doctor kickbacks claim clinical trials as collateral damage?”)

According to Hubbard, “However well-intentioned, if this regulation does not exempt payments to doctors to run clinical trials, it will be impossible to enroll a single patient in many trials and the state’s position as a major hub of biomedical innovation will be destroyed.”

The California bill, which was approved by the state senate in May, would enable physician payments for conducting clinical trials. It would, however, limit other payments and handouts, such as free travel and entertainment, speaking and consulting fees and meals. Drugmakers could only spend $250 per year per person on free meals.

According to another article in Fierce Biotech (“Look out, pharma marketers. California may turn off speaking fees and ban pharma gifts,” by Tracy Staton, May 22, 2017), the bill’s sponsor, Sen. Mike McGuire, claimed that a University of California-San Francisco study showed that doctors who receive “industry gifts,” were two to three times more likely to prescribe branded drugs as opposed to equivalent generics. The study, which was published in JAMA Internal Medicine in 2016, revealed that even inexpensive meals appeared to affect doctors’ prescribing habits. A Harvard Medical School study had similar results. While McGuire believes that “the vast majority of physicians and medical professionals put the needs of their patients first,” he is concerned that “financial relationships between some physicians and pharmaceutical companies confirm what has been suspected—financial incentives change minds.”