California Senate Passes Bill Banning Drug Company Gifts to Doctors

On May 18, the California Senate passed a bill that would ban pharmaceutical companies from giving gifts to doctors. The Senate voted 23-13 in favor of sending the bill to the Assembly. [1]

For the bill, SB 790, California lawmakers used a similar 2009 Vermont law enacted in 2009 as a template.

If the bill is signed into law, doctors would no longer be able to receive perks, such as airline tickets and lavish meals, from drug companies. According to Sen. Mike McGuire, the bill would lower healthcare costs, in part because doctors who receive gifts are more likely to prescribe costly drugs. [2]

Drug companies unload more than $1.4 billion a year on California doctors in the hopes they will promote and prescribe their products, said McGuire, a Democrat who represents a district west of Sacramento.

McGuire said that in 2014, doctors in his state received more gifts and payments from pharmaceutical companies than in doctors any other state. [3]

Read: Need a Link Between Federal Reps and Drug Companies? Here it is

“While we have witnessed the cost of drugs rise over the past decade, industry profits have also grown significantly. We should be all standing for seniors and taxpayers to drive down the cost of prescription drugs.” [1]

According to a recent study by researchers at UC San Francisco, doctors who receive gifts from drug companies are 2 to 3 times more likely to prescribe name-brand drugs over cheaper, generic drugs. [2]

An even more recent study found that doctors at teaching hospitals are more likely to prescribe generic drugs when pharma reps are kept at bay.

Source: Pro Publica

Others have a different take on SB 790. State Sen. Ted Gaines argued that drug company gifts “provide the funding for research, for cures.”

He added:

“Why would we do anything to diminish the ability of pharma companies to be successful in providing these new products?” [3]

Senate minority leader Patricia Bates said the bill would discourage physicians from participating in clinical trials or restrict California’s access to experimental drugs.

However, the bill would still permit doctors to receive salaries for participating in clinical trials, and would allow for the payment of meals up to $250 per year for individual doctors.

The bill is headed to the state Assembly, the California lower Legislature, for consideration.


[1] Associated Press

[2] Daily Health Post

[3] RT

Pro Publica

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Study Finds Pharma Reps Influence Doctor Prescription Decisions

Doctors at teaching hospitals are more likely to prescribe generic drugs over name-brand ones when pharmaceutical sales representatives are kept at bay, a study published in JAMA shows. [1]

By comparison, doctors working in hospitals that don’t keep pharma sales reps on a short leash – freely accepting meals and gifts, and letting reps have free reign of the hospital – prescribed far more name-brand medications.

In other words, pharma reps know how to sweet-talk docs into choosing significantly more expensive drugs over cheaper generics.

Findings of the Study

For the teaching hospital study, researchers looked at 19 centers in 5 states that restricted visits by drug reps by:

  • limiting access
  • limiting gifts
  • or punishing reps who broke the rules

The team compared prescriptions by 2,126 doctors at teaching hospitals with 24,593 of their peers with similar characteristics who did not limit reps’ access. The study also examined more than 16 million prescriptions in total, using data from CVS Caremark, a large pharmacy benefit manager.

In an editorial accompanying the study, Charles Ornstein, from ProPublica, writes:

“Understanding the financial relationships between physicians and the drug industry is only 1 window into prescribing habits. It is just as important, if not more so, to understand how prescribing practices of physicians compare with their peers. Most physicians generally are not aware if their drug choices are similar to other physicians in their fields; there has been no definition of what constitutes ‘normal’ prescribing.” [2]

Read: Pharma Companies Spend 19x More on Marketing Than Research

Significant changes were found in 6 of the 8 drug classes studied at 9 of the 19 hospitals reviewed. The policies were enacted at various times from 2006-2011. Changes in prescribing started immediately and lasted from 12 to 36 months afterward, however. This led to an increase of up to 10% in physicians favoring cheaper generics over more expensive, name-brand drugs – a small, but significant number. [1] [3]

One thing the study didn’t examine was whether generic drugs were the more medically-sound approach. Privacy laws made it impossible to study that aspect. [3]

Furthermore, the fact that changes were found in 6 of the 8 drug classes does not prove that physicians made better choices without pharma reps influencing them, though it does appear that was the case.

Study leaders Ian Larkin and George Loewenstein, both economists, suggest that healthcare providers go the route taken by hospitals such as the Mayo Clinic, the Cleveland Clinic, and California’s Kaiser group, which pay their doctors straight salaries. This would create a conflict-free environment where patients don’t have to worry that their doctors making decisions about their health based on money or gifts. [4]

After all, the “do no harm” snippet from the Hippocratic Oath should include patients’ ability to afford their medicine.


[1] ProPublica

[2] The JAMA Network

[3] Newsweek

[4] Slate

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