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Vermont Sees Drug Companies Reduce Payments To Health Care Providers

CONTACT: William H. Sorrell, Attorney General, (802) 828-3171

April 4, 2011

According to disclosure reports filed with the Attorney General’s Office, pharmaceutical companies spent 30% less in payments to, or made on behalf of, Vermont health care providers than in prior years. In the twelve months before July 1, 2010, 141 manufacturers of pharmaceuticals, biologics, and medical devices spent approximately $4.8 million to Vermont doctors, hospitals, universities and others. The total amount reported is higher than in all years since reporting began on July 1, 2003, but the amount of non-research dollars to health care providers from pharmaceutical companies –the only companies who reported in the past – is down by 30%. Although significant changes in the disclosure law make year to year comparisons difficult, “the federal government and states concerned about the cost of drug company marketing expenditures should take a close look at what has happened in Vermont,” said Attorney General William H. Sorrell. “And now, thanks to changes to our law, we can make much more industry marketing information available on our office website.”

The report released Friday is based on reporting for the fiscal year July 1, 2009, through June 30, 2010 (FY10). It does not include the costs of advertising on TV, radio, or print media, or the value of free samples distributed to physicians, as those have not been reported to the Attorney General. Starting in April 2012, the distribution of free samples and of vouchers and co-pay cards that enable an individual to receive a prescribed product for free or at a discounted price will be reported to the Attorney General for the previous calendar year.

Most gifts, including food and entertainment, have been banned, but expenditures that the legislature deems to be appropriate are allowed. In FY10, approximately half of those expenditures were for clinical trials and research, expenditures that had not been reported in the past. Of the balance, 34% went to physicians, 24% for educational materials, 21% to professional, educational or patient organizations, and 13% to academic institutions. The number of physicians who received $3,000 or more dropped approximately 63%, from 104 and 102 in fiscal years 2008 and 2009 (FY08 and FY09) to 39 in FY10, and dropped by more than 50% from $1.7 - $1.5 million in FY08 and FY09, to less than $740,000 in FY10. (When looking at only pharmaceutical expenditures, which is all that were reported in the past, the drop exceeds 60%.)

As a group, top physicians with a self-identified specialty of psychiatry again received more than any other specialty, but the total amount for psychiatrists who received $3,000 or more was approximately $150,000 in FY10, as compared with nearly $400,000 in FY08. The only other specialty receiving over $100,000 as a group in FY 10 (in contrast to five specialties the previous year) was neurology, with approximately $140,000, having dropped from nearly $200,000 in FY08. Approximately 44% of the expenditures to physicians receiving more than $3,000 in FY10 were for faculty honoraria; 42% were for “other purposes” with limited descriptions provided by the manufacturers.

Of the 50 products with the greatest expenditures, drugs for treating type 2 or type 1 & 2 diabetes garnered the greatest amount of expenditures just as they had in FY08, although the amount (roughly $152,000) was a 62% decrease from the expenditures on products with the same indications two years earlier. Expenditures on products used to treat depression or anxiety, the second highest expenditures by indication, were down 63% from a year earlier. Expenditures on products to treat hypertension dropped 90% in FY10 from what they had been two years earlier.

Of the 52 products associated with over $10,000 in expenditures in FY10, 71% were pharmaceutical products, 15% biologics and 13% medical devices. The five products with the highest expenditures were all pharmaceutical products, and accounted for nearly one-third of the spending on products with over $10,000 in expenditures.

For a copy of the report and the data upon which it is based, check the Attorney General’s website at: www.atg.state.vt.us under “prescribed products.”

  Website consulting provided by The National Association of Attorneys General.