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News Roundup: Drug Ads, Devices, and Payments Scrutinized

   November 19, 2015

Physicians are at odds with hospitals over Medicare pay cuts at the same time that doctors' financial ties to medical devices are under the microscope of the U.S. Senate. And the AMA is sounding the alarm on drug ads.

The American Medical Association's penchant for making big announcements during its annual interim meetings continued this week in Atlanta with a call to ban all ads aimed at consumers for prescription drugs and medical devices.

The AMA also reaffirmed its rejection of the proposed mergers of insurers Cigna and Anthem and Humana and Anthem.

Normally, I'd focus all of my attention this week on the AMA's meeting because symbolic and significant policy pronouncements are typically made at these events. But two items that flew under the radar this week caught my attention instead because of their potential financial impact on physicians.

Patrice Harris, MD

First, the practice of physician-owned distributorships, or PODS, in which physicians earn a portion of sales from prescriptions for medical devices, was heavily criticized during a U.S. Senate Finance hearing on Tuesday. The regulatory environment of surgeons using devices they may have a financial stake in, such as orthopedic implants, is not straightforward. Second, the Medicare payment cuts that are part of the budget deal agreed to in October are pitting hospitals against physicians.

Banning Drug and Device Ads
Direct-to-consumer prescription drug and medical device ads are a significant chunk of consumer advertising—just watch any TV show. The AMA wants this to stop. In a statement, Patrice Harris, MD, AMA board chair-elect, said the ads drive up consumer demand for expensive treatments over cheaper, but effective alternatives. "Direct-to-consumer advertising… inflates demand for new and more expensive drugs, even when these drugs may not be appropriate."

Unsurprisingly, Pharmaceutical Research and Manufacturers of America, PhRMA, pushed back immediately on Twitter.

The AMA believes banning drug ads will reduce healthcare spending (because patients won't be demanding specific drugs they may not need) and improve transparency.

I have heard physicians complain about having to give in to patients who heard or read about a new drug. But over and over again, research points out that patients listen to their doctors when they trust them. There are always one or two patients who are insistent, but if a physician is constantly giving into patients' demands for Humira because the ad for it is on heavy rotation in during Law & Order reruns, maybe it is time to for a doctor-patient relationship checkup.

Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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