Big Pharma and Medical Industry Dole Out $3.5 Billion in Kickbacks to Doctors and Teaching Hospitals

Big Pharma and Medical Industry Dole Out $3.5 Billion in Kickbacks to Doctors Teaching Hospitals

By Carolanne Wright

Contributing Writer for Wake Up World

It is scary how many similarities there are between this [pharmaceutical] industry and the mob.” ~  former Vice-President of Pfizer pharmaceuticals.

The U.S. federal government has released disturbing data about the profiteering nature behind our medical system. Namely, a staggering 4.4 million payments made to physicians and teaching hospitals by medical device and pharmaceutical companies.

According to officials from Centers for Medicare & Medicaid Services (CMS), during the last five months of 2013, big pharma and medical companies paid a total of $3.5 billion in kickbacks to 546,000 physicians and 1,360 teaching hospitals.

If you believe pharmaceutical and medical corporations hold the health of the general public in high regard, it’s time to reconsider.

Bringing Transparency to the Medical Establishment — Somewhat

Launched in 2014, the Open Payments website was created — in accordance with the Affordable Care Act — to document payments by private companies to doctors and hospitals in a move towards transparency. Unfortunately, the site is far from perfect.

The platform isn’t easy to navigate and users are forced to wade through seemingly endless reams of data to glean practical information. Even searching for a specific physician is near impossible. Adding to the confusion, a percentage of drug and device companies attributed payments to multiple subsidiaries, instead of assigning them to a single parent company. Take Johnson & Johnson, who posted payments under a minimum of 15 subsidiaries, while device maker Medtronic and pharmaceutical company Novartis both used six.

Fortunately, Charles Ornstein, a senior reporter at ProPublica, has decoded a good portion of the data and found the following:

The top three categories for payments include royalty or license, promotional speaking and consulting fee. Next were food and beverage, travel and lodging, grant and education. Followed by honoraria, gift, non accredited training and ownership or investment interest. And lastly, space rental or facility fees, accredited training, charitable contribution and entertainment.

More data was edited, censored or obscured before publication than the government had claimed there would be.

Due to irregular data and other issues, CMS hasn’t released about a third of the data for the period between August and December 2013.

Companies lavish an enormous amount of money on royalty payments.

Royalty and licensure payments to doctor and hospital inventors totaled $976 million. “Genentech Inc. alone paid $122.5 million in royalties in the last five months of last year. Depuy Synthes Sales Inc., a subsidiary of Johnson & Johnson, spent $35.9 million in royalties,” writes Ornstein in Our First Dive Into the New Open Payments System.

Medical doctors and teaching hospitals ranked highest of those who received the most money.

Companies are required by law to report payments to medical doctors, teaching hospitals, osteopaths, dentists, chiropractors, optometrists and podiatrists. According to the data, medical doctors received an astounding 69% of payments, with teaching hospitals coming in second at 25%. A mere 6% of the payments went to the remaining groups.

Doctors travel a lot, thanks to drug and device makers.

“Doctors were paid for more than 200,000 trips by companies in the last five months of the year. The most common domestic destinations: Chicago, Dallas, New York, Atlanta and Philadelphia. Fewer doctors left the country, but when they did, their top destinations were Toronto, Copenhagen, Amsterdam, Paris and Barcelona. Drug and device makers paid for doctors to travel to about 80 countries in all,” notes Ornstein.

Business as Usual

The findings by Ornstein shouldn’t be all that surprising since pharmaceutical companies especially are known to be rife with corruption.

Cortland Pfeffer (with Irwin Ozborne) writes about this lack of ethics in Licensed to Kill: Psychiatry, Big Pharma and the State-Sanctioned Drug Cartel

“Upon learning more about this dark side of psychiatry, I literally grew nauseous. I started to examine this psychiatrist’s charts to find that nearly every one of his patients was prescribed Abilify. In comparison, other providers prescribed Abilify only 4% of the time… compared to his rate of 75%. Then, of course, he is also married to the pharmacy representative for this company. For each prescription he writes, she gets paid a commission. She also gets paid for talking to doctors because of her free pass into the clinic. He also is funded by the same company to give speeches on this drug, and for signing off on peer-reviewed articles and studies on these drugs – again 100% funded by drug companies. They are making exuberant amounts of money by medicating people with a drug that in their own words “doesn’t really work.”’

Needless to say, Big Pharma has a less than stellar track record where principles are concerned. Another example is pharmaceutical giant Merck. The company harassed scientists who criticized their drugs, produced a fake ‘peer reviewed’ journal and “published an entirely ghostwritten journal article and had a doctor sign his name to it, even though a Merck employee felt the data presented was “wishful thinking.”’ [Source]

But it isn’t just Merck, many pharmaceutical companies fall into the same fraudulent category. Reports BBC News:

“Until recently, paying bribes to doctors to prescribe their drugs was commonplace at big pharmas, although the practice is now generally frowned upon and illegal in many places. GSK was fined $490m in China in September [2014] for bribery and has been accused of similar practices in Poland and the Middle East.

The rules on gifts, educational grants and sponsoring lectures, for example, are less clear cut, and these practices remain commonplace in the US.

Indeed a recent study found that doctors in the US receiving payments from pharma companies were twice as likely to prescribe their drugs.”

As outrageous as the pharmaceutical industry has proven itself to be, a quote comes to mind by Ogden Nash:

“How are we to survive? Solemnity is not the answer, any more than witless and irresponsible frivolity is. I think our best chance lies in humor, which in this case means a wry acceptance of our predicament. We don’t have to like it but we can at least recognize its ridiculous aspects, one of which is ourselves.”

In the same way, John Oliver acknowledges the absurdity of bought and paid for physicians in the following clip, using humor to drive the point home.

Last Week Tonight with John Oliver: Marketing to Doctors (HBO)

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About the author:

Carolanne Wright

I’m Carolanne — a writer, chef, traveler and enthusiastic advocate for sustainability, organics and joyful living. It’s good to have you here. If you would like to learn more, connect with me at or visit


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