On Friday, June 29, 2018 the Centers for Medicare & Medicaid Services (“CMS”) released the 2017 Open Payments Data, which covers transactions data collected from January 1, 2016 through December 31, 2016. The total dollar amount of payments totaled $8.4 billion (General Payments: $2.82 billion; Research Payments: $4.66 billion; the total records published totaled 11.54 million. The 2017 Open Payments Data shows a 4.7% drop in the total amount of payments from applicable manufacturers and group purchasing organizations (“GPO”) and a 6.9% drop in the total number of payments.
Where Did the Money Go?
The $8.4 billion was provided to 628,000 physicians (i.e., Doctors of Medicine or Osteopathic Medicine; Doctors of Dental Medicine or Dental Surgery; Doctors of Podiatric Medicine; Doctors of Optometry; and Chiropractors) and 1,158 teaching hospitals. Applicable manufacturers and GPOs are required to report any payment or other transfer of value (“POTOV”) of $10 or more, or all POTOVs if the aggregate amount of those payments add up to more than $100 in a calendar year (note: the de minimis thresholds for reporting are annually adjusted based on the consumer price index).
Roughly 75% of the $2.07 billion in general payments went to physicians, while the remaining 25%, $751.21 million, went to teaching hospitals. Research payments largely went to teaching hospitals, $1.04 billion, compared to the $79.13 million that went to physicians, an approximately 38% decrease from the previous year. It should be noted that the physician research payment total includes: (1) Payments where the company making the payment has named a physician as the primary recipient, (2) Payments to a research institution or entity where a physician is named as a principal investigator on the research project (i.e., received associated research funding).
Reporting by the Numbers
For reporting entities we saw 10,000 fewer physicians reported, 8 additional teaching hospitals, and 75 fewer companies.
Year to Year Comparisons
The below tables show comparisons of the Open Payments Data from 2013 through 2017. The total dollar value of reported payments and total number of records has generally remained consistent.
General Payments
The top companies making general payments was lead by Genentech, Inc. who paid over $400 million in 2017 to the teaching hospital, City of Hope National Medical Center, for a royalty payments on several of their cancer drugs.
Edwards LifeSciences Corporation saw a significant 275% increase in their overall general payments, largely as a result of a $100 million purchase of Harpoon Medical in 2017; company founder, Dr. James Gammie, Professor of Surgery and Chief of Cardiac Surgery at the University of Maryland, received over $26 million from Edwards.
Research
In research payments Pfizer Inc. took over the lead from Novartis with a slight increase. Tesaro had a 777% increase in research spending from $9 million to $79 million in research spending. Roche Molecular Systems also saw a significant 551% increase in research spending from $8 million to $53 million.
The top specialties in 2017 were Orthopedic Surgery, which has significant spending on royalties or licenses; Neurologic Surgery also has high royalty/license counts along with Cardiovascular Disease.
Endodontics had a significant increase largely due to an increase in royalty or license payments.
Nature of Payments
Royalties are by far the largest category with 37% payments for royalties or licenses.
Some changes this year, grants had a 20% decrease and honorarium an 11% decrease, education received an 11% increase.
States have a wide amount of variance year over year, largely from sales of companies. Maryland saw a 63% increase in general payments driven by the sale of Harpoon Medical which accounted for $26 million of the increase.
States Research
Maryland saw a 25% increase in research payments during the same year 2017 Michigan had a 28% decrease. Because this data is selectively entered with a significant delay in publication for research, this research data can be subject to wild swings in numbers.
Conclusion
Visitors to the CMS Open Payments website can look up individual clinicians and hospitals to see what they have received from drug and device makers and compare their payments to national and specialty averages.
Special thanks to Nicodemo Fiorentino and also Raymond Miguri Lei PhD candidate from the University of Maryland for data research for this article.