Prescription drug spending in the United States comprised 17 to 20 percent of all healthcare spending in 2015. Invoice spending on medicines is expected to rise from $435 billion in 2015 and $450 billion in 2016, to between $580 billion to $610 billion by 2021, with the vast majority of this cost coming from brand-name prescription drugs. Brand-name drugs account for approximately 72 percent of total drug spending despite comprising just 10 percent of all prescriptions.

Many brand-name drugs have generic alternatives that can drastically reduce cost when prescribed over the brand version. Why aren’t generic drugs prescribed more?

“Possible Side Effects: Investigating the Connection Between Payments from Pharmaceutical Companies and the Prescribing Habits of Physicians” reveals the relationship between payments made by pharmaceutical companies to physicians, the number of prescriptions arising from physicians who received those payments, and the cost and consequences to consumers as a result. In one of the most comprehensive research reports to-date on the relationship between doctors and pharmaceutical companies, the study found that physicians who received at least one industry payment from a pharmaceutical company for any specific brand-name drug were five times more likely to prescribe that drug over alternatives, including generic options. The study also found the physicians who accepted a payment from a pharmaceutical manufacturer related to a specific opioid drug were 14.5 times more likely to prescribe that drug over a similar alternative.

Open Payments Prescribing Habits Infographic

The study cross-links Open Payments data from 2014 through 2016, available to the public via the Centers for Medicare and Medicaid Services, with Medicare Part D prescription data. Between 2014 and 2016, physicians in the U.S. received a total of $6.2 billion in payments from pharmaceutical companies. Click here to download the full Possible Side Effects report.

The CareDash provider profiles also show the amount and type of payments individual physicians accepted from pharmaceutical and medical device companies, as well as the amounts from specific companies for specific drugs and medical devices.

Report Resources

“Possible Side Effects: Investigating the Connection Between Payments from Pharmaceutical Companies and the Prescribing Habits of Physicians”

Overall Findings

  • Physicians were 5.3 times more likely to prescribe a brand-name drug over alternatives in 2015 when they received a payment related to that drug in 2014
  • Physicians were 5.5 times more likely to receive a payment on behalf of a drug in 2016 after high rates of prescribing the drug in 2015. Payment values to individual physicians ranged from $0 to $58.4 million
  • There are prescribing differences among medical specialties, with some specialties being more likely to prescribe a drug over alternatives when receiving a payment:
    Specialty Times More Likely to Prescribe
    Family Practice 5.6 times
    Internal Medicine 4.3 times
    Psychiatry 3.9 times
    Cardiology 2.8 times

Drug and Pharmaceutical Company Findings

  • Physicians in California received the highest average number of payments per year from pharmaceutical companies from 2014 to 2016: 1.2 million payments total
  • The top drugs physicians received payments for in 2014 to 2016 paid by individual companies were:
    Drug Amount
    Xarelto $76.5 million paid by Janssen Pharmaceuticals
    Invokana $55.9 million paid by Janssen Pharmaceuticals
    Humira $53.0 million paid by AbbVie Inc.
  • The top payment categories from pharmaceutical companies to physicians for 2016 include:
    Category Amount
    Promotional speaking or service $561.9 million
    Royalty or license $490.4 million
    Consulting $366.3 million
  • Physicians who receive payments for Synthroid are 2.6 times more likely to be high-prescribers of the drug.

Opioid-Related Findings

  • Opioid manufacturers spent more than $43 million in payments for physicians from 2014 to 2016
    • More than $27 million were promotional speaking or service payments
    • More than $8.5 million were food and beverage payments
  • The top opioid manufacturers providing payment to physicians were:
    Company Amount
    INSYS Therapeutics, Inc. $16.0 million
    Purdue Pharma L.P. $11.5 million
    Depomed, Inc. $5.7 million
    Pfizer, Inc. $2.2 million
  • There were 74,272 payments on behalf of Subsys, an opioid drug from INSYS Therapeutics, Inc. between 2014 and 2016, totaling $16 million.
  • There were 6,501 payments made by opioid manufacturers to 997 physicians in Massachusetts between 2014 and 2016.
  • On average, physicians in Florida, California, Ohio, Arizona, Texas and New York accepted more payments from opioid manufactures than those from other states
    • Of these states and according to the data in Open Payments, New York physicians received the highest average amount of payments on behalf of opioids: $1,014.93 per provider
  • Physicians in California received more than $5.4 million in total payments on behalf of opioids from 2014 to 2016