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Assessing the impact of the Physician Payments Sunshine Act on pharmaceutical companies’ payments to physicians

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  • Sherri Cheng
  • Wenjing Duan
  • Wenqi Zhou

Abstract

Enacted in 2010 as part of the Affordable Care Act, the Physician Payments Sunshine Act (PPSA) mandates transparency in financial interactions between pharmaceutical companies and healthcare providers. This study investigates the PPSA’s effectiveness and its impact on industry payments to physicians. Utilizing ProPublica and Open Payments databases, a difference-in-difference analysis was conducted across ten states. Results reveal a significant reduction in pharmaceutical companies’ meal-related payments post-PPSA, impacting both the total payment amount and the number of unique physicians reached. Conversely, travel payments showed no significant impact in the primary analysis. However, subsequent analyses revealed nuanced reductions in the number of unique physicians reached, highlighting a more intricate relationship wherein pharmaceutical companies likely adjusted their financial interaction strategies with physicians differently across states. State-level variations in meals further underscore the complexity of PPSA’s influence. This pioneering research contributes valuable empirical evidence, addressing gaps in prior studies and emphasizing the ongoing need for policy assessment to guide industry-physician relationships.

Suggested Citation

  • Sherri Cheng & Wenjing Duan & Wenqi Zhou, 2024. "Assessing the impact of the Physician Payments Sunshine Act on pharmaceutical companies’ payments to physicians," PLOS ONE, Public Library of Science, vol. 19(8), pages 1-13, August.
    • Handle: RePEc:plo:pone00:0306886
    DOI: 10.1371/journal.pone.0306886
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    References listed on IDEAS

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    1. King, Marissa & Bearman, Peter S., 2017. "Gifts and influence: Conflict of interest policies and prescribing of psychotropic medications in the United States," Social Science & Medicine, Elsevier, vol. 172(C), pages 153-162.
    2. Tong Guo & Srinivasaraghavan Sriram & Puneet Manchanda, 2020. "“Let the Sunshine In”: The Impact of Industry Payment Disclosure on Physician Prescription Behavior," Marketing Science, INFORMS, vol. 39(3), pages 516-539, May.
    3. Daniel L. Chen & Vardges Levonyan & S. Eric Reinhart & Glen Taksler, 2019. "Mandatory Disclosure: Theory and Evidence from Industry-Physician Relationships," The Journal of Legal Studies, University of Chicago Press, vol. 48(2), pages 409-440.
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