Transparency laws expose pharma industry’s activity in Vermont, doesn’t slow it down

Pharmaceutical spending in Vermont in recent years doesn’t appear to be slowing down — despite new transparency requirements and the elimination of outright “gifts” to Vermont’s doctors. In fact, due to changes in state statute, reported pharmaceutical expenditures have risen in Vermont over the last four years.

The changes hinge on 2009 legislation that reworked the rules for interaction between pharmaceutical companies and health care providers. Before the legislation, the companies were required to report their payments to doctors and other health care professionals, but some spending areas were allowed to remain secret.

The 2009 legislation, Act 59, largely eliminated companies’ ability to give gifts to doctors.

“A gift means anything of value given for free, basically,” says Kate Whelley McCabe, an assistant attorney general who focuses on pharmaceutical marketing law.

The same legislation also lifted the veil on a big spending category for pharma companies: clinical trials. Before Act 59, pharmaceutical companies were able to spend any “reasonable” amount funding clinical trials in Vermont and were not required to report them.

The Attorney General’s Office releases an annual report on spending by pharmaceutical companies, and in the first year after the law change, pharmaceutical spending jumped from $2,559,589 to $3,973,654.69, but it wasn’t because drug companies were flocking to Vermont with open wallets. According to the report, the change in law changed the numbers.

The report says that total expenditures in fiscal year 2010 (after the disclosure law was passed) and 2004 (before) was the same, roughly $4 million. The 2010 spending level on pharmaceutical marketing was $1.8 million, when money paid to doctors for clinical trials and research was excluded from the total.

The report from Fiscal Year 2011, the AG’s most recent, has a similar disclaimer. That year had an almost identical breakdown, with about $1.8 million of $4 million overall coming into the state for clinical trials.

The difficulty comparing reports year to year is largely a function of changing statutes.

For one thing, there’s more disclosure now than ever before.

“A couple years ago, the data was not all public, but now it is all public,” said Assistant Attorney General Wendy Morgan.

Act 59 not only expanded the range of activities required to be reported, but it applied the same level of transparency to pharmaceutical companies and manufacturers of medical devices and biologics (things like live vaccines or otherwise biological and not chemical products).

Whelley McCabe says that while changes in the law make the annual reports “hard to compare,” the ultimate goal is increased transparency.

“They’re not going to be 100 percent compatible because we try to improve it every year,” she said.

Drug companies pay doctors for speeches

Vermont doctors have brought in hundreds of thousands of dollars from pharmaceutical companies in recent years even after Act 59. Though a few have made thousands of dollars for speaking engagements, many others have received little or nothing from the drug industry.

New data from Pro Publica shows pharma spending on doctors by state.

Many doctors are paid to speak at continuing medical education events, according to Vermont Medical Society Executive Vice President Paul Harrington.

“Technically, a lot of these speaking engagements are at national meetings, and if it’s a national meeting in a particular area and there’s a drug that relates to that particular specially, then you’ll have CME forums that provide physicians and other attendees what the FDA says about the permitted uses for that drug,” Harrington said. Doctors who work in a specialized field of medicine are often paid by drug companies to present at such events.

While doctors are sometimes paid by drug companies to speak, with all travel and food costs covered, the drug companies aren’t legally permitted under federal law to have influence over the content of the presentation.

“It’s important to note that even with the funding, the drug company has to defer to the presenter on the content,” Harrington said.

Despite that restriction, doctors can still speak about available drugs and the ways they’re being used to treat patients. Harrington said companies that think they’ve put out a breakthrough drug will pay to bring specialists from the relevant field to make others aware of the drug.

“Each company probably has — depending on what drugs they manufacture, they may feel that they’ve got a breakthrough drug that they need to position so that prescribers know more about it,” Harrington said.

While they can pay to bring specialists in front of their peers, companies are not supposed to have any control over what methods are mentioned in the talk.

The majority of the $768,885 paid to Vermont doctors between Q1 2009 and Q1 2011 was for speaking fees, with a small handfull of doctors raking in a relatively large portion of the money. Those included:

Susan Legacy, employed by Partners in Psychiatry in Williston, who made $129,110 from Eli Lilly and Pfizer.

Richard Rubin, who made $90,442 from Eli Lilly.

Michael McNamara, employed by North Country Hospital’s psychiatric division, who made $76,544 from Eli Lilly and Pfizer.

Fletcher Allen Medical Center at large combined with doctors working there received $85,496 from Eli Lilly and Pfizer for “research” during the time period. Harrington said this likely meant the hospital was conducting clinical trials for the companies’ drugs. Such trials, he said, must be done with the pharmaceutical companies held “at arm’s length” to maintain the integrity of the results.

VTDigger made an effort to reach some of the state’s biggest recipients of pharma money and learned that Susan Legacy has left Partners in Psychiatry and is now working for a pharmaceutical company outside Vermont, a receptionist at the firm said.

Richard Rubin, contacted by email, said: “I retired and ended all practice and medical education activities over a year ago, so I’m no longer well informed to advise you.”

McNamara didn’t respond to a call to his office at North Country Hospital Wednesday.

The ProPublica data used for this story may contain errors and omissions. For the most up-to-date statistics from ProPublica, visit ProPublica’s Dollars for Docs page for Vermont.