• by Thom Forbes  @tforbes, October 1, 2014

A government tabulation released for the first time yesterday shows that drug companies paid $3.5 billion to doctors and teaching hospitals for five months last year in research, consulting, speaking fees and the like — a practice that critics charge often amounts to medical payola but the healthcare industry defends as customary and necessary to the development of innovative treatments.

“The Centers for Medicare & Medicaid Services website itemized … payments to 546,000 doctors and 1,360 teaching hospitals, made between August 2013 and December 2013,” reports Kaiser Health News’ Shefali Luthra. “But about 40% of those payments were listed without noting who received them, either because of concerns about whether CMS had the correct recipient information, or because the physicians named hadn’t had enough time to verify the payment information.”

“I welcome these disclosures,” says Eli Lilly CEO John C. Lechleiter in a story by the Wall Street Journal’s Peter Loftus. “We believe the payments that are spelled out in these reports can be entirely justified and in fact are critical for us to be able to discover and develop medicines and effectively communicate their value.”

Loftus points out that Lilly already “was mandated to report physician payments on its website as part of a 2009 settlement with the government over illegal-marketing allegations,” a widespread industry practice of peddling medicines for off-label uses. Getting caught, critics charge, is thought to be a cost of doing business.

The financial relationships disclosed in the government database, which was mandated in the Sunshine Act provision of the Affordable Care Act, are “an insidious corrupting influence on the practice of medicine, research, the development of clinical guidelines and clinical practice,” says Public Citizen’s Michael Carome of Public Citizen in a piece by Bloomberg’s Caroline Chen, Michelle Fay Cortez and Alex Wayne.

“The reason companies pay physicians honoraria and give them gifts and consulting fees is ultimately to influence the prescribing practices,” Carome continues.

“It’s a widespread practice that does influence the kind of care patients get,” Lisa McGiffert, manager of Consumers Union’s Safe Patient Project, tells the Los Angeles Times’ Chad Terhune and Noam N. Levey. “This exposure will require everybody to talk about something that’s been underground.”

That said, “just the fact that there are financial ties doesn't alone indicate wrongdoing,” blogs Jason Millman for the Washington Post, pointing out that 94% percent of physicians had a ‘relationship’ with a drug or device company according to a 2007 New England Journal of Medicine study. “But as the release of Medicare physician payment data demonstrated earlier this year,” Millman concludes, “the transparency can help root out bad actors, waste and curious outliers.”

Still, “providers and industry groups said they hope consumers don’t reach the wrong conclusions,” writes Kaiser Health New’s Luthra.

“You have to understand, there are many facets of the relationship between physicians and industry,” said John Murphy, associate general counsel at Pharmaceutical Research and Manufacturers of America. “And they are vital to ensuring drugs get developed and get to the market.”

Although the “trove of data” released yesterday is being “widely hailed as a milestone for transparency,” ProPublica’s Charles Ornstein, whose investigative team has been making its own disclosures for four years on its Dollars for Docs website and in freely distributed articles, details five caveats consumers should keep in mind in an NPR.org blog post.

• The data don't cover all payments;
• By design, some data on research payments won't be included;
• Because of errors, additional data aren't being released;
• Not all payments have the same significance;
• This is the first federal release of these data: Expect errors.

Ornstein also tweeted, “Gotta say, Open Payments website is NOT AT ALL consumer-friendly. Not sure it's journalist friendly. We have 3 people working now,” Jeffrey Young observes on Huffington Post.

Indeed, “Dr. Robert M. Wah, president of the American Medical Association, said his members had reported a variety of problems with the website; they were granted advance access to the data to verify its accuracy,” report Katie Thomas, Agustin Armendariz and Sarah Cohen in the New York Times. “Some had trouble logging on. Others found the information to be wrong.”

“While the AMA strongly opposes inappropriate, unethical interactions between physicians and industry, there are relationships that can help drive innovation in patient care and provide significant resources for professional medical education that ultimately benefits patients,” the AMA’s Wah said in a statement.

And that, in the end, is what everybody’s motive is. Right?