Pharma shells out $3B to doctors and hospitals—with Roche, Sanofi leading: CMS

As massive marketing crackdowns and kickback lawsuits circulate through U.S. courtrooms, scrutiny on pharma's financial ties to healthcare providers has never been higher. But instead of scaling back its payments to docs and hospitals last year, Big Pharma leaned in even further.

Drug and device makers shelled out $3 billion to doctors and teaching hospitals in 2018, a 3.5% increase from the previous year, according to the Open Payments database published Sunday by the Centers for Medicare and Medicaid Services (CMS).

Those payments include everything from royalties paid to teaching hospitals to physician speaking and consulting fees to free food and travel. The industry paid out an additional $4.93 billion for research and development.

fter digging into numbers from the industry's 15 biggest drug companies by 2018 revenue, we identified the top 10 totals, led by Roche and its U.S. subsidiary Genentech. It's not a comprehensive, industrywide list; for example, Allergan—not among the top 15 companies by revenue last year—shelled out a whopping $73 million in general payments.

Other drugmakers that didn't make the top tier by revenue may have racked up industry-beating totals, too. We'll drill down into those numbers in the coming days.

For the companies that did make this quick top 10 list, the ranks are overshadowed by Roche and Genentech, which together shelled out an eye-popping $502 million in general payments, or nearly 17% of the industry's total.

But the lion's share of that—some $460 million—came in the form of royalties paid to one academic medical center for several top cancer drugs.

That leaves $42 million in consulting fees, speaking fees, food and travel and more royalties—a figure closer in line with the other Big Pharmas in the rankings.

Indeed, rounding out the top five after Roche are a who’s who of pharma powerhouses with bigger totals. Sanofi and subsidiary Genzyme came in second with $60.62 million while AstraZeneca and subsidiary MedImmune totted up $53.32 million. Pfizer paid out $48.85 million while AbbVie and its subsidiary Pharmacyclics racked up $44.92 million.

Several companies on our list have faced scrutiny from federal prosecutors for their payments to doctors over the years, and one has a big dispute going with the feds right now. At No. 10 on the list with $36.13 million paid out last year, Novartis faces whistleblower allegations that it used lavish entertainment and other payments to spur doctors to prescribe more of its drugs.

The suit accuses Novartis execs of treating physicians to pricey dinners and fishing trips to boost sales of cardiovascular meds Lotrel and Valturna and diabetes drug Starlix. As of June, Novartis was nearing a massive settlement in that case, according to a court filing that was accidentally made public.

Kickbacks have also been the focus of a series of stinging rebukes to the opioid industry, including the recent conviction of John Kapoor, the former CEO and founder of Insys. Kapoor was found guilty on federal racketeering charges tied in part to the company’s executive-driven scheme to pay off doctors to prescribe the drugmaker’s under-the-tongue fentanyl spray Subsys.