Breaking the tie between Physicians and Pharma

Breaking the tie between Physicians and Pharma


In 2004 Merck issued a recall of the then best-selling painkiller “VIOXX” because it was approximated that half million Americans died of heart attacks caused by it. Merck promoted this drug through Continuing Medical Education (CME) and was able to sell more than 100 million of the drug before pulling it out of the market. It was later discovered that not only did Merck intentionally cancel lectures that covered dangerous side-effects of the drug, but also skewed the depiction of cardiac risk in its presentation of clinical trial data.[1] Accounts of well-known companies providing distorted information about their widely used products are all the more alarming because federal law allows these companies to funnel millions of dollars to doctors who teach CME programs.

The relationship between drug companies and physicians

Continuing Medical Education (CME) programs are designed to help physicians stay current in their fields and are legally required for them to remain licensed to practice medicine. While these programs used to be produced and paid for by universities and medical associations, over the past 20 years the drug-industry has taken over that role.[2] Between 1998 and 2006, industry funding to CME programs nationwide rose from $302 million to $1.2 billion, according to the Accreditation Council for Continuing Medical Education (ACCME).

The collegial relationship between medicine and pharmaceutical manufacturers and physicians is quite ironic since their interests are incongruent. But from a business point of view, pharmaceutical companies’ interaction with physicians is very natural. If it weren’t for physicians’ signatures being a prerequisite for drug prescriptions, drug companies wouldn’t be so inclined to win the minds of doctors. The companies cannot directly influence the public to buy their products, because physicians act as a barrier.

By allowing drug companies to become the primary educator for doctors, the content of education has become biased in favor of the industry. In one study, it was found that positive effects of the drug was mentioned up to 3 times more often than those of its competitors, and it increases the likelihood that physicians request the drug to be added to hospital formularies by more than 300%. Moreover, drug companies tend to sponsor talks that focus on promoting expensive brands, rather than affordable ones, even if they have the same effect.[3]

Moreover, use of postmenopausal estrogen therapy was believed to help prevent a certain cardiovascular disease, but it turned out to actually increase the risk. Litigation revealed that drug companies were responsible for shaping clinical opinions through ghost writings in medical journals.[4] 44.5% of the information provided by pharmaceutical representatives to family physicians were said to be factually erroneous and is biased towards their own products, according to a Spanish study, and a German study found 94% of the information in brochures for doctors to have no basis in scientific evidence. Many of the brochures had citied publications that could not be found or did not accurately reflect the publications that they cited.[5]

Reasons against banning industry funding

 Since the drug manufacturers can distort the accuracy of information without breaking any law, there is a heated debate as to whether or not to ban industry funding. Opponents to the ban site a survey data where an overwhelming number of CME participants found the sponsored content to be unbiased, the fact that there is no evidence suggesting that such support undermines educational content, physicians’ ability to spot bias, and the separation between the funder and the maker of CME content.[6] However, we all know too well not to trust ourselves in being good judges about bias, since the very characteristic of it is that it’s unintentional and undetectable. In fact, for industry, the most successful CME events are those that appear completely objective, since they are most likely accepted by physicians.[7] Moreover, most of the times the maker of the CME content are for-profit medical education and communications companies(MECC), which are funded by drug companies to pay speakers and design courses. The separation between the two entities hardly mean much – critics say that MECCs’ heavy reliance on commercial funding makes them more susceptible to bias slipping into their educational content than are medical schools and physician organizations.[8]

Nevertheless, given that industry funding constitutes almost half of all CME funding, it is perhaps better to seek alternative ways to mitigate conflict of interest – banning industry funding at this stage may be a huge blow to the profession. The World Medical Association also believes it is more preferable to place guidelines for relationships between industry and physicians than to ban the relationship altogether[9].

Conflict of Interest (COI) between Patients and Doctors

Another very common form of COI is found between patients and physicians. Some physicians receive financial incentives for enrolling patients for clinical studies. Others conduct studies sponsored by companies while holding ownership in products under investigation. The payments they get depends on how much profit the company makes, so they are put in a position very much like that of the company’s employees.

However, no federal laws forbid physicians from having ownership in products or companies that make those products. It might well be a violation of Anti-kickback law if enrollment incentives are to induce physicians to purchase drugs or services to be paid for by Medicare, but if the payment is for value of the research conducted, it is legitimate and it is difficult to separate actual costs from any added incentive payment.[10]

Codes of medical ethics do not address COI either. The suggested guidelines merely require that physicians disclose financial ties to companies whose products they are investigating to the medical center where the research is being conducted. It doesn’t outright prohibit incentive payments as it only says “any remuneration received by the researcher from the company whose product is being studied must be commensurate with the efforts of the researcher on behalf of the company”[11].

Hence, without disclosure, the public has no way of knowing whether a doctor has been given money that might affect prescribing habits.

The Value of Disclosure

One interesting study[12] conducted by Sunita Sah suggests that disclosure is not the panacea many think it to be. She introduces two factors to consider when weighing the value of disclosure. One is panhandler effect, asserting pressure on the advisee to comply with the advice due to discomfort with signaling unhelpfulness. The other is insinuation anxiety, which causes the advisee to have anxiety about how their rejection of advice may be interpreted by the advisor as an insinuation that the advisor is corrupt. Both panhandler effect and insinuation anxiety are more likely to occur in continuing, amiable relationships, where there is greater social pressure to avoid insinuating that the advisor is giving self-serving advice. They have greater effects when the encounter is face-to-face, rather than remote.

In the first experiment, she measured the impact of disclosing financial COI. It resulted in increased pressure to comply, due to both insinuation anxiety and panhandler effect, and decreased pressure to comply due to a decrease in trust. Thus the two forces worked against each other, cancelling out the effect. The net change in behavior was minimal. In the second experiment, there was disclosure of “no COI”. In this case, compared to non-disclosure there was an increase in the level of trust and less insinuation anxiety. In the last experiment, the impact of external disclosure was studied. Compared to personal disclosure, there was a similar decrease in trust, but insinuation anxiety was much less (as shown in the graph below).

These results lead to two conclusions:

  1. It’s better to mandate disclosure because then physicians would try to avoid placing themselves in a COI situation so as to be able to report the absence of it.
  2. When making disclosure, it’s better to use an external source.

However, disclosure may be required in settings other than doctor-patient relationship as well. For instance, the World Medical Association states about medical conferences[13] that “the name of a commercial entity providing financial support (should be) publicly disclosed in order to allow the medical community and the public to assess the information presented in light of the source of funding. In addition, conference organizers and lecturers (should) disclose to conference participants any financial affiliations they may have with manufacturers of products mentioned at the event or with manufacturers of competing products”. In such circumstances, trust and insinuation anxiety factors are deemed irrelevant.

Shortcomings of legislative movement

Congress recently passed what’s called the Physician Payments Sunshine Act, in which it mandated external disclosure by the drug companies. Even though disclosure of financial incentives concerning clinical studies is not a part of the Act, other financial relationships like ownership interest is disclosed. However, although the purpose of this legislation is to eliminate public skepticism, this falls short of an ideal solution because there are exceptions to reporting. Here’s what it says about payments related to continuing education programs[14]:

“Payments or other transfers of value provided as compensation for speaking at a continuing education program are not required to be reported if all the following conditions are met:

  1. The event at which the physician is speaking meets the accreditation requirements for continuing education of the Accreditation Council for CME
  2. The manufacturer doesn’t pay the speaker directly; and
  3. The manufacturer doesn’t select the physician speaker or provide the third party with an identifiable set of individuals to be considered as speakers.

Concerning the first criteria, the Macy Foundation report said that accredited organizations providing CME “should not accept any commercial support from pharmaceutical or medical device companies” and that the “faculty of academic health centers should not serve on speakers’ bureaus or as paid spokespersons for pharmaceutical or device manufacturers”[15] – this insinuates that accreditation does not guarantee freedom from commercial influence. In fact, more than 40 percent of the country’s 1908 accredited CME providers rely on industry money to cover their costs[16]. The second and third criteria correspond to the ACCME guidelines that forbid companies from directly paying doctors who teach CME courses.[17] These standards are said to have a loophole that allows manufacturers to circumvent regulations – the so called ‘medical education communication companies’ act as intermediaries between physician and industry, as mentioned earlier, and this “arm’s length third party status”[18] ensures that almost all drug companies meet the above stated conditions.

What’s even more disappointing is the new draft bill proposed last May, which included in it an amendment provision completely exempting drug companies from reporting payments made for CME programs.[19] The lobbying group, the American Medical Association, says “disclosure would unfairly stigmatize doctors who are leaders in their fields and deliver lectures on breakthroughs in medicine”.[20]

Ideas for a change

Rather, forces other than legislation have had notable impact on industry funding from 2007 to 2011. Commercial support fell by nearly a third in 2011, and three key factors contributed to the fall: tighter policies created by medical associations or accreditation councils whose residing board members are mostly doctors, medical colleges’ active refusal of industry funding, and growing criticism and awareness of industry-funded CME.

Firstly, doctors seemed to be realizing that receiving industry funding is ethically incorrect. In 2007, the ACCME strengthened its commercial-support rules, barring medical industry firms from sponsoring CME or participating in structuring educational activities. A conference of medical professional convened in 2007 by the Josiah Macy, Jr. Foundation stated that “bias, either by appearance or reality has become woven into the very fabric of continuing education” for physicians. In June of 2008, the AMA Council on Ethical and Judicial Affairs issued a report urging individual doctors and medical institutions not to accept industry support for CME, saying it could “threaten the integrity of medicine’s educational function”.[21] They announced that preference should be given to CME faculty with no financial interests in the subject matter.

Secondly, medical colleges actively brought about change. The Association of American Medical Colleges (AAMC) had recommended that centralized office in an institution should coordinate the funds coming in from the companies – to give the discretion to the universities themselves to decide where the funds would go. In 2008, Stanford took the initiative of no longer accepting course-specific industry funding, requiring that the funds instead be given to a pooled school-wide education fund. Product-linked programming may subside under this new approach, since the discretion of spending is now given to the academic medical centers. Commercial exhibits are no longer permitted at CME activities sponsored by Stanford, as means to keep the programs uninfluenced by marketing.

However, it may be important to note that the committee of the AAMC that gave the above recommendations includes chief executive officers of major drug makers, including Pfizer, Elin Lily & Company, Medtronic, and is chaired by the former chief executive officer of Merck. Some view this “pooled donor” approach as being “superficially appealing but fundamentally flawed”.[22] It seeks to preserve the channel for commercial funding while retaining autonomy over educational content, and leaves doubt as to whether CME could really stay free from commercial influence.

An example shown by University of Michigan may be a better solution to breaking the tie. In January of 2011, the university implemented a drastic plan to give up commercial support that had accounted to 45% of its $1.2 million annual CME budget. Universities are weaning away from commercial support and seeking alternative sources of funding from health plans, health care systems and others, while slightly raising educational costs for physicians.[23] More than a decade ago, the Mahatma Gandhi Institute of Medical Sciences, a rural medical college in India, announced that it would no longer accept commercial support, thus becoming “the first medical institute in the country to keep the drug industry away from medical education”.[24] We are seeing a similar trend now permeating U.S. medical schools.

Thirdly, growing criticism and public awareness of drug companies’ ties with physicians played a role in shifting the source of medical educational funding. In fact, even the Congress had come to call into question the issue of industry funding of CME, with senate committees reviewing the issue. Industry funding for medical education communications companies especially came under extra scrutiny, and drug companies voluntarily refrained from funding CMEs – as one president of the medical education company put it, “big pharmaceutical companies don’t like to get criticized”. In 2008, Pfizer Inc., the world’s top-selling drug maker, announced it would no longer send grant money to medical education companies, and No.2 seller GlaxoSmithKline followed suit in 2009[25].

All of the above proved to be successful means of cutting down commercial funding for a certain period of time, but ever since 2011, drug industry payments to MECCs jumped back up by 25 percent, reaching $311 million in 2014, according to a Boston Globe analysis.[26] This rebound may be due to insufficient regulatory oversight to foster change. Compliance programs should deal with more specific matters concerning industry funding and the regulatory bodies should be entrusted with more power. Compliance programs are now mandatory for physician practices, but some of them do not address financial conflict of interest that so many physicians face, or if they do, do not have effective sanctions. University of Texas Health Science Center at Houston has an office of institutional compliance, which provides various guidelines concerning compliance issues and training. For instance, the ‘decision matrix for clinician relationship with industry’ provides standards of conduct expected for clinicians in their university relationships with drug companies, and ‘Sunshine Act / Open Payments’ encourages disclosure of financial relationship with physicians and teaching hospitals.[27] However, in the case of Johns Hopkins University, they have a policy on interaction with industry, yet there is no clear sanction for failure to comply.[28] Severe penalties should be imposed to deter recurrence and strengthen internal compliance culture. Moreover, the F.D.A. recently proposed a memorandum order prohibiting drug companies from giving doctors promotional gifts by establishing “Ethical Standards for Health Promotion”[29]. While this faced strong opposition by the doctors, implementing such standards and enforcing them would eventually generate an ethical culture.

Where can we turn to for alternative funding?

One attractive means of getting public support is through ‘academic detailing’. Medical school faculty work through non-profit organizations with no industry ties to collect clinical data and condense them into evidence-based recommendations which are then presented to physicians. This agenda has been adopted by several states including New York, Massachusetts, Pennsylvania among many, and they have actually been successful in delivering noncommercial evidence-based education.[30]

Secondly, the federal government may have an incentive to support CMEs, since the education of physicians ultimately serves the public good.

Lastly, physicians themselves can pay more for their education. Some may object to paying more for taking courses and parting with all the lavish settings and free food they’ve been accustomed to, but in no other profession do vendors foot the bill for continuing education. According to Archives of Internal Medicine study, only 42% of the physicians are willing to pay higher registration fees to eliminate commercial support, even though 90% see industry funding as a risk of a biased CME – which explains such a slow change in payments coming in from doctors, hospitals, etc., even when the total CME funding is shrinking. Data shows that doctors have started to take over funding for their own education, whether they want it or not. Registration fees for CME have increased from 2006 to 2010 (as shown below). U.S. physicians and surgeons have the highest median income of all workers, and expenses for CME courses are tax-deductible[31], so it is only a matter of shifting towards valuing unbiased medical education more than their financial comfort.


No medical innovation should come at the cost of jeopardizing public health. If the company making the drug funds the study of the drug, and gives financial incentives, naturally the doctors would want to push company’s products. It was reported in 2009 that ¾ of all doctors had at least one type of financial relationship with a drug or medical device company.[32] If so many doctors are presumably biased, patients should be informed of such conflict of interest. For that reason, the latest draft bill with an amendment provision to Sunshine Act to completely free the drug companies from reporting CME funding should bear severe criticism.

Forbidding all relationships between physicians and industry altogether at this stage seems impractical and may face opposition. In the last five months of 2013, physician speakers on CME programs were paid more than $11 million.[33] The red sliver shown below represents only 2 percent of total financial transactions between companies and individual physicians. This is evidence that a strict ban on commercial funding at this stage may be a severe blow to the medical profession as a whole. More reasonable approach would be to slowly free up interactions between industries and physicians.

Doctors, although reluctant to accept changes, have taken initiatives to make policies for internal regulation. In 2011, for instance, the AMA adopted ethics policy saying that industry funding of CME should be avoided when possible.[34] More important than the making of these policies, however, is the willingness of CME providers to abide by these rules – the growth of which is only possible through public inspection and attention given to the matter. As previously mentioned, the AMA is fighting in Congress to hide commercial funding from public view.[35] This support some measure of doubt about the sincerity of doctors in bringing about change. It is crucial to propagate awareness of the unhealthy ties between industries and physicians that threaten the integrity of medical care of patients – and that is only possible through transparent disclosure of the payments made. This awareness, along with doctors’ and medical colleges’ initiative to break free from industry influence, may eventually lead to bias-free education for physicians and better care for patients.

In conclusion, no change can last without constant reinforcement of internal control. There exists a concern that doctors may be putting up a temporary show to appease the suspecting public – evidenced by an article which observed that doctors find external regulatory oversight as an insult to their profession.[36] Not only should the physicians receive annual training on compliance issues related to industry ties, but punishment and incentives should also be appropriately given. When Harvard Med School recently adopted a policy requiring all faculty members to disclose commercial relationships they have, they did not require them to report amounts received for speaking or consulting, nor set limits on companies’ gifts to faculty.[37] Disclosure is not enough – it should be accompanied by a carrot and stick approach to bring about both cultural and structural change.



[1] Jerry Avorn, “Controversies in Cardiovascular Medicine – Funding for Medical Education: Maintaining a Healthy Separation From Industry” ( p2

[2] Daniel Carlat “Diagnosis: Conflict of Interest” New York Times, June 13 2007

[3] Jerry Avorn, p2

[4] Jerry Avorn, p2

[5] Jeff Blackmer, “Professionalism and the Medical Association”, July 2007, p20

[6] Robert W. Donnell, “Should we Eliminate Pharmaceutical Funding of CME?” Medscape Family Medicine, 2009

[7] Adriane Fugh-Berman “This may sting a bit: cutting CME’s ties to pharma” Virtual Mentor, Ethics Journal of the American Medical Association, 2006, Volume 8, Number 6: 412-415

[8] Ruthann Richter “Stanford medical school severely restricts industry funding of continuing education for physicians” 2008

[9] Recruiting Human Subjects” Pressures in Industry-Sponsored Clinical Research, Office of the Inspector General (June 200) OEI-01-97-00195, at 17

[10] Nancy J. Moore “What Doctors Can Learn From Lawyers About Conflict-of-Interest Doctrine” 2001, p1

[11] Nancy J. Moore, p2

[12] Sunita Sah, George Loewenstein, Daylian Cain  “Insinuation Anxiety: Fear of Signaling Distrust after Conflict of Interest Disclosures”

[13] “WMA Statement concerning the Relationship between Physicians and Commercial Enterprises” , adopted by the 55th General Assembly, Tokyo, Japan, 2004 and amended by the 60th World General Assembly, New Delhi, India, 2009 (

[14] Julie E. Treumann “Sunshine Act: 7 things you need to know” March 25, 2013, p3

[15] Jerry Avorn, p3

[16] Tracy Jan “Drug companies quietly funnel funds to doctors” Globe Staff, August 2015

[17] Daniel Carlat, p2

[18] Jerry Avorn, p1

[19] Niam Yaraghi “What Pharma Wants to Hide” U.S.News May 2015

[20] Tracy Jan “Drug companies quietly funnel funds to doctors” Globe Staff, August 2015

[21] Ruthann Richter “Stanford medical school severely restricts industry funding of continuing education for physicians” 2008

[22] Adriane Fugh-Berman, p412

[23] Kevin B. O’reilly “As CME funding shifts from industry, others foot the bill”, Sept. 2011

[24] Adriane Fugh-Berman, p414

[25] Kevin B. O’reilly, p1

[26] Tracy Jan, p1

[27] UTHealth (

[28] Johns Hopkins Medicine (

[29] Jun Ramirez, “Doctors hit proposal banning pharmaceutical firms from giving them promo items” July 27, 2014

[30] Jerry Avorn, p3

[31] Census Bureau. Figure 3: Fifty occupations with the highest median earnings for year-round, full-time workers: 1999

[32] “Drug Companies Paying Doctors Billions” (

[33] Niam Yaraghi, p1

[34] Kevin B. O’Reilly, p1

[35] Tracy Jan, p2

[36] Jun Ramirez, “Doctors hit proposal banning pharmaceutical firms from giving them promo items” July 27, 2014

[37] Duff Wilson “Harvard Medical School in Ethics Quandary” The New York Times, March 3 2009

Posted in Spring 2016.