Following Haaretz Report: Comptroller to Probe Pharmaceutical-hospital Connection

State Comptroller Micha Lindenstrauss is examining the amount of money drug companies gave to various Israeli hospitals and the purpose of these donations.

State Comptroller Micha Lindenstrauss has launched an investigation into the financial ties between drug companies and various health-care organizations.

Specifically, he is examining how much money these companies gave to different Israeli hospitals and the purpose of their donations. The findings will be published in a special report slated to come out next May.

State Comptroller's Office staffers are currently roaming the corridors of hospitals nationwide and scrutinizing various financial statements - those of the hospitals themselves, those filed by the hospitals' research foundations (which, in addition to research, also fund various acquisitions and construction work ), and those of the hospitals' friends organizations.

Micha Lindenstrauss - Emil Salman
Emil Salman

The friends organizations are supervised by the Registrar of Nonprofit Associations, rather than the Health Ministry. The Finance Ministry has charged for years that the hospitals use these organizations to hold donations they don't want to report to the Health Ministry.

Medical association agrees to transparency bill

Meanwhile, the Israel Medical Association agreed yesterday to support a bill that would mandate transparency on drug companies' payments to medical organizations and research physicians. The move comes in response to the storm provoked by yesterday's Haaretz report, which revealed the IMA had voluntarily disclosed its 2009 receipts from such firms in an effort to stave off the bill.

The bill, which would mandate disclosure of all donations made by commercial organizations to heath-care groups, is part of the Economic Arrangements Bill accompanying the 2011-12 budget.

The IMA's ethics bureau approved the voluntary disclosure in an effort to show that legislation was not needed. As bureau chairman Prof. Avinoam Reches was quoted as saying in yesterday's report, the IMA viewed the legislation as both discriminatory and ineffective and believed voluntary disclosure would be "much more reliable and transparent."

But, stung by the response to the Haaretz report, the IMA announced yesterday that its legal department actually sent a letter to ministers and Knesset members two weeks ago asserting it would support the bill if it applied to other health-care organizations as well - specifically, the health maintenance organizations and the Health Ministry, which also receive donations from drug companies. This is now the organization's official position, it added.

"We believe the public has the right to receive comprehensive information about this activity," the IMA said in yesterday's press release.

The HMOs are already included in the bill. And the Health Ministry, which had backed the bill from the start, immediately announced that it would agree to be included in the transparency mandate as well.

"That was our original intention, and we never thought otherwise," the ministry said in a statement. "Anyone who did think otherwise didn't understand the legislation's intent."

Treasury satisfied

The Finance Ministry, which actually proposed the bill, expressed satisfaction with both developments.

According to the IMA's voluntary disclosure, the organization received NIS 710,000 in 2009, including NIS 275,000 from drug companies.

Even larger sums are thought to have been received by the approximately 100 organizations representing various medical fields, but these groups did not sign on to the voluntary disclosure initiative.

In March 2009, the Health Ministry's comptroller, Aryeh Paz, published a scathing report on the ties between doctors and drug companies, based on inspections carried out at three hospitals in 2005 and 2006: Rambam Medical Center in Haifa, Sheba Medical Center in Tel Hashomer and Assaf Harofeh Hospital in Tzrifin.

"Evidence has been found of a problematic connection between orders for medical equipment or medications placed with a given company and doctors traveling to conferences with funding from the same company," Paz wrote.

However, he added, no comprehensive information on the donations various hospital departments had received from pharmaceutical or medical equipment firms was available.

He therefore concluded that "all Israeli doctors should be required to provide full disclosure about their ties with pharmaceutical and medical equipment companies and to fill out a conflict-of-interests form."

Paz's suggestion later received additional impetus from a new law passed in the United States which, starting next year, mandates such disclosure from American doctors and medical organizations.