With it appearing that Obamacare is on the ropes with a Republican-controlled Congress and Oval Office, a recent update to a study, Dollars for Docs by ProPublica, shows us just how broken the American health care system is and why it is so broken.
In its most recent iteration, ProPublica looks at the public records showing how much money is passing directly from pharmaceutical, biologic and medical device companies into the pockets of American physicians. By law, under the 2010 Physician Payments Sunshine Act, manufacturers must submit annual data on payments and transfers of value (i.e. trips, rounds of golf, meals) on an annual basis. In the interest of transparency, the data is collected and then made public on the Centers for Medicare and Medicaid Services (CMS) website under the Open Payments federal program that is required by the Affordable Care Act. By doing this, the architects of the Sunshine Act hope to detect any connections between prescribing and other medical expenditures and payments to physicians.
ProPublica's most recent update to Dollars for Docs covers the period from August 2013 to December 2015 and shows that a total of $6.25 billion in disclosed funds was paid to 810,716 doctors, 1171 teaching hospitals and 1866 companies.
Here is a list of the top fifty companies and how much their total payments were over the 17 month period:
Here is a list of the highest earning doctors:
Here is a list of the teaching hospitals that were paid the most showing how much they were paid and the number of payments that they received starting with the highest total payments at the top of the list:
San Francisco-based Genentech, a division of the Roche Group since March 2009, is, by a wide margin, the biggest spender among all companies. Let's drill into the data to see which drugs were covered and how much money was paid out for each drug under their total of $727 million in payments to 3,293 receiving doctors:
The second-largest payout on the list was for Avastin, a drug used to treat breast, kidney, ovarian, colorectal and lung cancers. When it was introduced by Genentech in 2004, it was one of the most expensive drugs on the market with a $4400 per month price tag. It had global sales of $6.8 billion in 2014.
Here is a list of the physicians who received the most money from Genentech over the 17 month period:
As I noted above, Genentech is part of the Roche Group, the world's largest biotechnology company, headquartered in Basel, Switzerland. As part of the 2009 merger agreement, Roche and Genentech combined their pharmaceutical operations in the United States (San Francisco). In 2015, Roche Group invested $9.7 billion in research and development and had sales of $50.2 billion. Globally, in 2015, 25 million patients around the globe were using one of Roche and Genentech's top 25 selling pharmaceuticals which includes Rutixan, Avastin, Herceptin, Lucentis and Perjeta. Roche's half-year report for 2016 shows sales of $24.621 billion, up 6 percent from the same six months in 2015. Operating profits were $8.018 billion and net income was $5.383 billion, up 4 percent from the same six months in 2015.
With all of this money, let's see what Genentech has spent in Washington, particularly on lobbying:
Up to October 28, 2016, the Open Secrets website shows lobbying expenditures of $2.57 million, down from $4.91 million in all of 2015. In addition, Roche Holdings lobbied through two of its other subsidiaries; $410,000 for Hoffman-La Roche and $180,000 for Roche Diagnostics for a total of $3.16 million. Here is a look at what Roche Holdings has spent on lobbying in the past:
Given the size of Roche, it is interesting to see where it falls when compared to its Pharmaceutical /Health Products peers:
This ongoing public expose by ProPublica shows very clearly how big money and Big Pharma have impacted the American healthcare system, causing significant financial stress for American healthcare consumers. The fact that pharmaceutical and medical device companies are spending hundreds of millions of dollars to get both Washington and America's medical practitioners to see things "their way" suggests that they have found the current system very profitable, despite the fact that many of their products are simply unaffordable by average American consumers.