The Congressional Budget Office (CBO), the non-partisan gold standard in evaluating the economic impact of policy change, has determined that requiring disclosure of drug industry payments to physicians will lead to lower health costs.
Throughout our long night of July 31, waiting for the House and Senate to finalize the cost/quality bill that included the prescription reform provisions, a lobbyist for the drug industry kept needling me, “You don’t actually believe that this will save costs?”
I said yes back then, and now there’s even more evidence. The CBO findings are part of a detailed analysis of over a hundred health policy options released last week. Here’s what CBO concluded:
At this time, the Congressional Budget Office cannot estimate how this option might affect spending for Medicare but believes that, over time, disclosure has the potential to reduce spending. For example, hospitals and health plans could use the data collected under this option to ensure that relationships between physicians and manufacturers did not influence decisions about which drugs became part of a formulary (a list of preferred drugs) or were recommended in practice guidelines. Public reporting and disclosure of industry–physician relationships might also encourage physicians to monitor and modify their own behavior. The reporting system that this option would implement and the data that would be collected as a result could become a building block for further regulations that might reduce future costs below the level that they otherwise would attain.
This report follows the strong recommendations of MedPac, the expert group that advises Congress on Medicare policy. Back in June, they put out an in-depth report on public reporting of physicians’ financial relationships with drug and device manufacturers: “studies have shown that physician interactions with the pharmaceutical industry are associated with rapid prescribing of newer, more expensive drugs, decreased prescribing of generic drugs, and physician requests to add drugs to a hospital formulary.”
Now, they have put out their recommendations, calling for public reporting.
DPH will hold two hearing on their draft regulations, on January 9 and 12 (details). We will be joining a long list of individuals, groups and experts urging DPH to strengthen their proposed regulations, and thereby reduce health costs.