Government agencies rely on advisory committees of external experts to provide guidance on policy decisions, but financial conflicts of interest may bias members' recommendations towards industry interests. In this paper, I examine the bias-expertise trade-off in appointing conflicted members on advisory committees. Using more than 20 years of data on FDA advisory committee meetings, I examine how members' industry ties affect their voting behavior and informational contributions. Using exogenous within-person variation in the scheduling of drug reviews relative to members’ industry relationships, I find that when members have ties to the drug sponsor, they are more likely to vote in favor of the sponsor, but there is no such pro-approval bias when members have ties to competitor firms. These findings are buttressed by a second analysis using two novel instrumental variables. I also find no informational or safety-related benefits of industry expertise and show that the FDA does not discount conflict-of-interest biases in its decision-making. These findings suggest that agencies can preserve the integrity of their decision-making by leveraging the expertise of committee members with competitor ties and internalizing advisory committee biases.

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We provide evidence of strategic transfer pricing by vertically integrated health care firms in response to insurer profit regulations. Insurers increased prices at vertically integrated pharmacies by 9.5% following the introduction of caps on insurer profits in Medicare Part D. We detect larger price increases by insurers that were at greatest risk of exceeding the allowable profit level. More than one-fifth of these higher prices were borne by the federal government. Our analysis illustrates that vertically integrated firms can evade profit regulation by ``tunneling’’ profits to unregulated subsidiaries, undermining regulatory intent and increasing health care spending.

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Research on charitable giving has been limited by scarce information on large donors and by a lack of data linking donors to recipient organizations. We address both gaps in the literature by applying machine learning methods to a novel administrative data source: IRS Form 990 Schedule B. This allows us to produce the first comprehensive map of donor-recipient relationships among major contributors over time. Using this mapping, we describe the distribution of large charitable gifts by donor type, linked recipient type, charity size, gift size, gift medium (cash versus noncash), and geography.

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ABSTRACT

Importance Transparency of industry payments to physicians could engender greater public trust in physicians but might also lead to greater mistrust of physicians and the medical profession, adversely affecting the patient-physician relationship.

Objective To examine the association between nationwide public disclosure of industry payments and Americans’ trust in their physicians and trust in the medical profession.

Design, Setting, and Participants Survey study using difference-in-difference analyses of a national longitudinal survey comparing changes in states where industry payments were newly disclosed by Open Payments with changes in states where payments information was already available because of state sunshine laws. The US population-based surveys were conducted in September 2014—shortly before the initial public disclosure of industry payments—and again in September 2016. Final analyses were conducted September through December 2018. Participants were adults 18 years and older (n = 1388).

Exposures National public disclosure through Open Payments of payments made by pharmaceutical and medical device firms to physicians.

Main Outcomes and Measures Wake Forest measure of trust in one’s own physician and Wake Forest measure of trust in the medical profession.

Results Of the 3542 original survey respondents, 2180 (61.5%) completed the second survey 2 years later, and 1388 named the same most frequently seen physician in both surveys. The mean age of respondents at the time of the first survey was 53 years, and 749 (54.0%) were women. Race/ethnicity was white in 76.6% (1063 of 1388) and non-Hispanic black in 8.0% (111 of 1388). Public disclosure of payments was associated with lower trust in one’s own physician regardless of whether respondents knew their physicians had received payments (decrease in Wake Forest measure of trust in one’s own physician of 0.56 point; 95% CI, −0.79 to −0.32 point; P < .001). Open Payments was also associated with lower trust in the medical profession (decrease in Wake Forest measure of trust in the medical profession of 0.35 point; 95% CI, −0.58 to −0.12 point; P = .004).

Conclusions and Relevance Nationwide public disclosure of industry payments may be associated with decreased trust in physicians and in the medical profession. More judicious presentation of payments information may counteract unintended negative trust and spillover consequences of public disclosure.

[Response to Tringale and Hattangadi-Gluth Commentary]

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ABSTRACT

Objective To determine the effect of the public disclosure of industry payments to physicians on patients’ awareness of industry payments and knowledge about whether their physicians had accepted industry payments.

Design Interrupted time series with comparison group (difference-in-difference analyses of longitudinal survey).

Setting Nationally representative US population-based surveys. Surveys were conducted in September 2014, shortly prior to the public release of Open Payments information, and again in September 2016.

Participants Adults aged 18 and older (n=2180).

Main outcome measures Awareness of industry payments as an issue; awareness that industry payments information was publicly available; knowledge of whether own physician had received industry payments.

Results Public disclosure of industry payments information through Open Payments did not significantly increase the proportion of respondents who knew whether their physician had received industry payments (p=0.918). It also did not change the proportion of respondents who became aware of the issue of industry payments (p=0.470) but did increase the proportion who knew that payments information was publicly available (9.6% points, p=0.011).

Conclusions Two years after the public disclosure of industry payments information, Open Payments does not appear to have achieved its goal of increasing patient knowledge of whether their physicians have received money from pharmaceutical and medical device firms. Additional efforts will be required to improve the use and effectiveness of Open Payments for consumers.

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ABSTRACT

Background

The Physician Payments Sunshine Act, part of the Affordable Care Act, requires pharmaceutical and medical device firms to report payments they make to physicians and, through its Open Payments program, makes this information publicly available.

Objective

To establish estimates of the exposure of the American patient population to physicians who accept industry payments, to compare these population-based estimates to physician-based estimates of industry contact, and to investigate Americans’ awareness of industry payments.

Design

Cross-sectional survey conducted in late September and early October 2014, with data linkage of respondents’ physicians to Open Payments data.

Participants

A total of 3542 adults drawn from a large, nationally representative household panel.

Main Measures

Respondents’ contact with physicians reported in Open Payments to have received industry payments; respondents’ awareness that physicians receive payments from industry and that payment information is publicly available; respondents’ knowledge of whether their own physician received industry payments.

Key Results

Among the 1987 respondents who could be matched to a specific physician, 65% saw a physician who had received an industry payment during the previous 12 months. This population-based estimate of exposure to industry contact is much higher than physician-based estimates from the same period, which indicate that 41% of physicians received an industry payment. Across the six most frequently visited specialties, patient contact with physicians who had received an industry payment ranged from 60 to 85%; the percentage of physicians with industry contact in these specialties was much lower (35–56%). Only 12% of survey respondents knew that payment information was publicly available, and only 5% knew whether their own doctor had received payments.

Conclusions

Patients’ contact with physicians who receive industry payments is more prevalent than physician-based measures of industry contact would suggest. Very few Americans know whether their own doctor has received industry payments or are aware that payment information is publicly available.

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ABSTRACT

Context: The Food and Drug Administration (FDA) Safety and Innovation Act has recently relaxed conflict-of-interest rules for FDA advisory committee members, but concerns remain about the influence of members’ financial relationships on the FDA’s drug approval process. Using a large newly available data set, this study carefully examined the relationship between the financial interests of FDA Center for Drug Evaluation and Research (CDER) advisory committee members and whether members voted in a way favorable to these interests.

Methods: The study used a data set of voting behavior and reported financial interests of 1,379 FDA advisory committee members who voted in CDER committee meetings that were convened during the 15-year period of 1997–2011. Data on 1,168 questions and 15,739 question-votes from 379 meetings were used in the analyses. Multivariable logit models were used to estimate the relationship between committee members’ financial interests and their voting behavior.

Findings: Individuals with financial interests solely in the sponsoring firm were more likely to vote in favor of the sponsor than members with no financial ties (OR = 1.49, p = 0.03). Members with interests in both the sponsoring firm and its competitors were no more likely to vote in favor of the sponsor than those with no financial ties to any potentially affected firm (OR = 1.16, p = 0.48). Members who served on advisory boards solely for the sponsor were significantly more likely to vote in favor of the sponsor (OR = 4.97, p = 0.005).

Conclusions: There appears to be a pro-sponsor voting bias among advisory committee members who have exclusive financial relationships with the sponsoring firm but not among members who have nonexclusive financial relationships (ie, those with ties to both the sponsor and its competitors). These findings point to important heterogeneities in financial ties and suggest that policymakers will need to be nuanced in their management of financial relationships of FDA advisory committee members.

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SUMMARY

With the enactment of the Physician Payments Sunshine Provision of the Affordable Care Act, pharmaceutical manufacturers are now required to disclose certain types of payments—e.g. payments for consulting, honoraria, gifts, and travel—made to physicians. This law is based on the premise that transparency in these kinds of transactions is of public importance and that disclosure requirements can act as a deterrent against quid pro quo exchanges; physicians will be reluctant to accept large payments from pharmaceutical firms if payments are publicly known and perceived as financial compensation for prescribing certain therapies.

To predict possible deterrence effects of the federal sunshine law, we studied the experience of two states, Maine and West Virginia, that previously implemented similar disclosure laws. We focused on the effect of the laws on the prescribing of HMG-CoA reductase inhibitors (statins) and selective serotonin reuptake inhibitors (SSRIs), two therapeutic classes in which marketing plays an important role in physicians' choice of treatment because the members within each class are pharmacologically similar to each other and highly substitutable.

To estimate the effect of the disclosure laws, we used a differences-in-differences, or interrupted time-series with control approach, comparing patterns of prescribing in states that enacted the laws to states that did not. Our results show that the disclosure laws in the two states we examined had a negligible to small effect on physicians switching from branded therapies to the generics and no effect on reducing prescription costs.