No More Free Lunches Following Launch of Open Payments Site

TORONTO - Oct. 2, 2014 - PRLog -- They say there’s no such thing as a free lunch. This timeless adage has never been more true in the medical device and pharmaceutical industries where, earlier this week, the federal government unveiled its Open Payments website, detailing over $665 million in payments made by industry to over 357,000 individual health care providers (HCPs) and 760 teaching hospitals between August and December of 2013. In total, over 2.6 million payments were itemized in the Open Payments system, covering everything from meals and entertainment expenses to research payments, consulting fees, and royalties.

The release of the Open Payments data, as mandated by the Affordable Care Act, is designed to shed light on the financial relationships that medical device and pharmaceutical companies have with HCPs and businesses. In making this data publicly available, it is hoped that the influence these companies have on physician prescribing patterns will wane. “It’s no secret that pharmaceutical and device companies are motivated by profit and use these payments to gain influence over physicians,” says Aaron Dickson, President at Q2 Metrics. “However, with the publication of these payments and the increased scrutiny it brings, we expect to see companies continue to scale back their spending on meals, teaching hospitals to evolve their conflict-of-interest policies, and an increasing number of physicians outright refusing meals and others gifts in fear of how such handouts might be interpreted by their patients.”

While designed to give transparency to public health care consumers, the Open Payments data also benefits the same medical device and pharmaceutical companies that are being forced to report. Companies can now use their competitors’ payments data in conjunction with other HCP profiling data (e.g. procedure volumes, referral patterns, peer networks, etc.) to better focus their sales and marketing efforts. For example, the medical device company reporting the largest sum of payments was DePuy Synthes, a division of Johnson and Johnson (JNJ), reporting over $35.5 million in payments between August and December 2013. When DePuy Synthes’ payments are cross-referenced against the universe of physicians that perform total knee arthroplasty procedures, a key revenue driver for the company, it becomes evident that DePuy Synthes is currently working with 15 of the top 100 knee surgeons in the US. Now, when competing knee implant companies are soliciting new business, they can narrow their target list by selectively excluding these surgeons, knowing that the effort required to convert these physicians to their technology is higher while the likelihood of converting them is much lower than it is with surgeons who do not maintain financial relationship with DePuy Synthes.

About Q2 Metrics, Inc.

Q2 Metrics Inc. is a leading provider of customizable physician targeting metrics and tools, including procedure volume profiling, influence mapping, and referral networks. Q2 Metrics principals are veterans of the information industry and, specifically, in providing high-value data solutions and insights to the health care field.