Monday, January 04, 2010

On The Payroll

The Boston Globe has done a fine job in detailing the financial ties between medical providers (doctors and hospitals) and pharmaceutical companies. It's latest effort shows that the coverage is having an effect.

High-ranking physicians and executives at Partners HealthCare, which includes Massachusetts General and Brigham and Women’s hospitals, can no longer receive stock or unlimited fees for sitting on the boards of biotechnology and pharmaceutical companies, under new rules that took effect Friday.

Partners estimates that the policy affects roughly 25 vice presidents, clinical department heads, and other top executives who are directors for some of the nation’s leading drug companies. The rules limit their pay to $500 an hour, or $5,000 for a typical 10-hour day attending a board meeting; the rules ban executives and high-level physicians outright from taking company stock as compensation. ...

The hospital network’s new conflict-of-interest policy also bans doctors from traveling the country as paid members of drug company "speaker’s bureaus."

The article describes one executive at Partners HealthCare who has received over $700,000 in pay from Pfizer for sitting on its board since joining that pharmaceutical's Board of Directors in 2006, most of it in stock. That means that as a director he has a fiduciary duty to the shareholders (of which he is one) to make sure the company's bottom line is healthy and continues to grow. One way to do that, of course, is to make certain drugs from Pfizer get used at his "day job" at Partners HealthCare. He claims that he doesn't do that but does admit the "perception" is there.

Of course it is.

It makes you wonder why Partners HealthCare didn't just outright ban the practice. That company has taken the position that because it operates teaching hospitals it is helpful to know just what is going with the pharmaceutical companies in terms of their financial stability and to provide scientific and medical guidance to them. That excuse doesn't pass the odor test.

At least a start has been made in curbing the pharmaceuticals' practice of buying doctors and hospitals. I can't help but think that the strong reporting by the Globe and other papers doing their job is responsible for the start to some measure, and for that I am grateful.

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Anonymous larry, dfh said...

That's exactly right: ban it outright. These people are on the pfizer board BECAUSE of their positions in the medical profession. There is no shortage of qualified MDs who could fill the positions at hospitals,etc, while keeping it all clean. Theres is no reason whatsoever for them to be hospitals administrators and board members on companies selling to their employers. The hospitals should outright forbid this practice.

6:23 AM  
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2:32 AM  

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