The federal RTT legislation, which you can read here, makes no reference to payments of any kind, except to state that a referring physician can not be compensated directly by the drug manufacturer. Indirect is just fine. I wonder if drug companies could possibly figure out ways to pay doctors indirectly? [1]
Payments are not forbidden, nor are they regulated or limited in any way. Nor are any oversight or regulatory mechanisms specified. Manufacturers must annually submit a report on adverse events, but the FDA has no power to act upon these reports. The bill’s sponsor, Ron Johnson of Wisconsin, made this clear in a letter to Scott Gottlieb, the FDA commissioner: “[The law] is not meant to grant FDA more power or enable the FDA to write new guidance, rules, or regulations ….”
No legislative text plus no regulatory oversight means that anyone can charge whatever they want. This became clear in one of the first cases, an experimental treatment for ALS in which the drug maker’s CEO clearly stated his intention to make a profit – at $300K per treatment.
Also unstated in the legislation is any requirement for insurance (including Medicare and Medicaid) to pay for treatment. Insurance rarely pays for experimental treatments, including standard clinical trials. These treatments, and associated costs of care, are typically borne by the trial’s sponsors, ie, the drug companies. None of that is mentioned in the law, so patients are on the hook for all costs.
It’s not even clear that insurers will pay for medical costs resulting from adverse events caused by these risky therapies. My guess is that they won’t, and patients will not only be harmed but bankrupted in many cases.
And if they try to sue for damages? The law is much more clear there:
No liability in a cause of action shall lie against—
(A) a sponsor or manufacturer
(B) a prescriber, dispenser, or other individual entity (other than a sponsor or manufacturer), unless the relevant conduct constitutes reckless or willful misconduct, gross negligence, or an intentional tort under any applicable State law.
Blanket immunity for manufacturers, and a very high bar for physicians. It’s a little bit of libertarian paradise brought to the clinic.
The other aspect of this story is how it will enable unadulterated quackery to thrive. I recommend you read this blog post at Science-Based Medicine which invokes the sordid case of Stanislaw Burzynski. He has been defrauding cancer patients with “antineoplaston” treatment, and the law now provides him and others like him with a sustainable business model free of any annoying oversight or accountability. Expect to see a lot more stories like this in our glorious new libertarian medical future.
Footnotes
[1] Following the Script: How Drug Reps Make Friends and Influence Doctors