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As Hollywood Lobbied State Department, It Built Home Theaters for U.S. Embassies

This story was co-published with The Daily Beast.

Hollywood’s efforts to win political clout have always stretched across the country, from glitzy campaign fundraisers in Beverly Hills to cocktail parties with power brokers in Washington.

Last year, the film industry staked out another zone of influence: U.S. embassies. Its lobbying arm paid to renovate screening rooms in at least four overseas outposts, hoping the new theaters would help ambassadors and their foreign guests “keep U.S. cultural interests top of mind,” according to an internal email.

That was the same year that the Motion Picture Association of America, which represents the six biggest studios, reported it was lobbying the State Department on issues including piracy and online content distribution. Hollywood’s interests – including its push for tougher copyright rules in the Trans-Pacific Partnership trade pact – often puts the industry at odds with Silicon Valley.

The only public indication of the embassy-theater initiative was a February 2015 press release from American officials in Madrid, titled “U.S. Embassy Launches State-of-the-Art Screening Room.” It credited “a generous donation” from the MPAA.

Asked about its gifts to the State Department, the lobby group declined to say how many embassies got donations or how much they were worth.

“Because film is a great ambassador for U.S. culture around the world, MPAA assisted with the upgrade of some embassy theater facilities,” said spokeswoman Kate Bedingfield. “All gifts complied with the law as well as with State Department ethics guidelines.”

Nicole Thompson, a State Department spokeswoman, said at least three embassies besides Madrid received between $20,000 and $50,000 in entertainment upgrades last year – London, Paris and Rome. The revamped screening rooms, she said, aren’t intended to entertain U.S. officials, but rather to help them host screenings to promote an American industry and sow goodwill.

Thompson said the donations were proper and that all gifts to the department are reviewed to avoid even the appearance of a conflict of interest. “The department has explicit authorities to accept gifts made for its benefit or for carrying out any of its functions,” she said.

The State Department routinely accepts gifts from outside groups, Thompson said. She couldn’t provide any other examples of major gifts from groups that simultaneously lobby the agency. Thompson declined to list the items given by the MPAA or their total value, and wouldn’t say whether the group had made similar gifts in the past.

There was at least one precedent. A spokesman for Warner Bros. Entertainment said the studio helped pay for the refurbishment of the screening room at the U.S. ambassador’s home in Paris in 2011. “This donation was coordinated with the State Department and complied with all appropriate rules and regulations,” the spokesman said.

State Department policies posted online specifically permit gifts from individuals, groups or corporations for “embassy refurbishment, ” provided that the donors are vetted to ensure there’s no conflict or possible “embarrassment or harm” to the agency. The posted policies include no caps on the value of donations, nor any requirements for public disclosure of foreign or American donors. The rules also say that the donations can’t come with a promise or expectation of “any advantage or preference from the U.S. Government.”

Obtaining an advantage, albeit a nonspecific one, sounded like the goal when a Sony Pictures Entertainment official wrote to the studio’s chief executive officer, Michael Lynton, to relay a request to fund the screening rooms from Chris Dodd, the former U.S. senator who heads the MPAA. The executive writing the note – Keith Weaver – sought to assure the CEO that such a donation wouldn’t be improper.

“The rationale being that key Ambassadors will keep U.S. cultural interests top of mind, as they screen American movies for high level officials where they are stationed,” reads the message, included in a cache of emails hacked from Sony and which were posted online by the website WikiLeaks.

“The cost implication is estimated to be $165k (aggregate of $$$/in-kind) per embassy/per studio. Apparently, donations of this kind are permissible.”

Besides Sony, the MPAA represents Disney, Paramount, Twentieth Century Fox, Universal Studios and Warner Bros. Entertainment. The e-mails suggest that Sony executives decided against contributing to the project for budget reasons.

The MPAA has long been a powerful presence in the nation’s capital, spending $1.34 million on federal lobbying last year, according to data compiled by the Center for Responsive Politics. One of its flashier tools has been to host exclusive gatherings at its Washington screening room, two blocks from the White House, where lawmakers get to watch blockbuster films, rub elbows with celebrities, and up until several years ago, enjoy dinner – a perk scuttled because of stricter rules on congressional lobbying.

Hollywood studios depend on foreign markets for much of their profit but the MPAA’s interests don’t always align with those of other major American constituencies. For example, Hollywood studios have moved some film production to Canada to cut costs. American film workers have tried to get the federal government to stop the outsourcing of jobs, but have been met with resistance from the MPAA.

The trade group has also pushed federal officials to pressure foreign governments into adopting stricter copyright laws. An MPAA-funded study found that in 2005 worldwide piracy cost American studios $6.1 billion in revenue. That number has been disputed by digital rights advocates.

For the TPP trade deal, the MPAA has discouraged the American government from exporting “fair use” protections to other countries. In a hacked message from Dodd to the U.S. Trade Representative, the MPAA chief warned that including such provisions, which in American law allow limited use of copyrighted materials without permission, would be “extremely controversial and divisive.” Digital rights activists have characterized the efforts as overzealous.

“They’re basically encouraging other countries to adopt the most draconian parts of U.S. copyright law and even to reinterpret U.S. copyright law to make it more stringent,” said Mitch Stoltz, an attorney for the Electronic Frontier Foundation. “Broadly speaking broadening copyright law harms free speech in many cases by creating a mechanism for censorship.”

The state-of-the-art screening rooms are a relatively minimal investment by Hollywood as it works to strengthen connections abroad.

This spring, the U.S. ambassador to Spain, James Costos, brought a group of foreign officials to Los Angeles for a meeting hosted by the MPAA. Among them were representatives from the Canary Islands, who came prepared to discuss filming opportunities and tax incentives for American studios in the Spanish territory. The State Department touted the trip as an opportunity to “expand bilateral trade and investment, including through ties between the entertainment industries.”

It’s not known whether the path to that particular meeting was eased by the new screening room in Madrid. At the theater’s debut in February, the ambassador’s guests were treated to a dark tale of corruption, lobbying and double-dealing in Washington – the Netflix series “House of Cards.”

Related stories: For more coverage of politics and influence, read ProPublica’s previous reporting on secret political dealings by Sony, a reversal by the higher ed lobby and an imploding super PAC.

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A Pharma Payment A Day Keeps Docs’ Finances Okay

This story was co-published with NPR's Shots blog.

This story has been updated.

Few days went by last year when New Hampshire nephrologist Ana Stankovic didn't receive a payment from a drug company.

All told, 29 different pharmaceutical companies paid her $594,363 in 2014, mostly for promotional speaking and consulting, but also for travel expenses and meals, according to data released Tuesday detailing payments by drug and device companies to U.S. doctors and teaching hospitals. (You can search for your doctor on ProPublica's updated Dollars for Docs interactive database.)

Stankovic's earnings were certainly high, ranking her about 250th among 606,000 doctors who received payments nationwide last year. What was more remarkable, though, was that she received payments on 242 different days — nearly every workday of last year.

Reached by telephone Tuesday, Stankovic declined to comment. On her LinkedIn page, Stankovic lists herself as vice chief of staff at Parkland Medical Center HCA Inc. in Derry, New Hampshire, and as medical director of peritoneal dialysis at DaVita Inc., also in Derry.

That doctors receive big money from the pharmaceutical industry is no surprise. The new data released by the Centers for Medicare and Medicaid Services shows that such interactions are widespread, with not only doctors, but thousands of dentists, optometrists, podiatrists and chiropractors receiving at least one industry payment from August 2013 to December 2014.

What is being seen for the first time now is how ingrained pharmaceutical companies and their sales reps are in the lives of those who write prescriptions for their products. A ProPublica analysis found that 768 doctors received payments on more than half of the days in 2014. More than 14,600 doctors received payments on at least 100 days in 2014.

Take Juichih Hsu, a Maryland doctor whose specialty is family medicine. She received payments on 286 days of 365, more than anyone else. Sometimes, she received meals from several drug companies on the same day. Hsu's payments totaled $5,959 in 2014. She declined to comment when reached on Tuesday.

"There are physician practices which have very deep relationships with pharmaceutical representatives, where they are a very integral part of the practice," said Dr. Aaron Kesselheim, an associate professor of medicine at Harvard Medical School who has written about industry relationships with doctors. "Every day it's another drug company coming in for a lunch. Sometimes it may be some drug companies are bringing breakfast and some are bringing lunch and it's just part of the culture of the practice."

Sometimes there may be more at work than that.

A Packed Schedule

Maryland physician Juichih Hsu received payments — mostly food and beverages--from drug and device companies on 286 days in 2014, more than any other doctor in the country. Each box below represents a single day during the disclosure period. A gray box indicates no payments.

2014

Source: Centers for Medicare and Medicaid Services
Graphic by: Cecilia Reyes/ProPublica

The doctor with the second-highest number of interactions with drug and device reps, John Fritz, of Jersey City, N.J., logged payments on 256 days last year. His payments totaled $232,003. Fritz was indicted in June for referring patients to a medical imaging company from 2006 to 2013 in exchange for about $500,000 in kickbacks. He was charged with fraud and bribery, according to a release from the state attorney general's office. A woman who answered the phone at his office on Tuesday said he declined to comment.

Kesselheim said that to have such extensive contact with industry reps can indicate that doctors are getting their information about the drugs they prescribe from the companies that make them, and not from impartial sources. "There's good evidence that that affects prescribing practices and physician behavior."

The drugs for which Stankovic received the most money to promote are costly. One, H.P. Acthar Gel, cost an average of nearly $39,000 a prescription, Medicare data from 2013 shows, and experts say there's little evidence it works better than less expensive drugs. Another drug, Soliris, for which Stankovic received promotional payments is among the most expensive drugs in the world but is considered highly effective in treating serious kidney disease.

ProPublica's analysis turned up big differences in the number of industry interactions among physicians in different specialties. On average, doctors who received payments interacted with drug and device companies on 14 days last year, receiving an average of $3,325 in total.

The nation's 3,900 rheumatologists in the data averaged 40 days of interactions with drug and device companies, more than doctors in any other large specialty. They were followed closely by endocrinologists, electrophysiologists and interventional cardiologists. On the other end of the spectrum, dentists, chiropractors, neonatologists and pathologists had among the fewest interactions with drug and device makers.

Some of the doctors who had the highest number of interactions were those ProPublica has previously identified as having high rates of brand-name prescribing in Medicare's prescription drug program, known as Part D. Others have been mentioned in previous ProPublica stories about doctors who have received large payments from the drug industry. A number of experts, including Kesselheim, note that payments from industry may influence physicians' choice of drugs.

A spokeswoman for the pharmaceutical industry said in a statement that company interactions with doctors are important.

"Collaboration between physicians and biopharmaceutical professionals is critical to improving the health and quality of life of patients," the statement from the Pharmaceutical Research and Manufacturers of America said. "Clinical trials sponsored by biopharmaceutical companies have led to life-saving breakthroughs for people suffering from cancer and other life-threatening diseases. Physicians also provide real-world insights and valuable feedback to companies about their medicines to improve patient care. Educating the public about the nature of these collaborations helps patients understand in which ways these interactions can improve both their health and medical innovation."

ProPublica has been tracking industry payments to doctors since 2010. Our Dollars for Docs interactive database allowed people to search payments made by 17 companies between 2009 and 2013. Most of those companies were required to report their payments as a condition of legal settlements with the federal government.

The data released Tuesday radically expands the amount of data available to patients — and ProPublica has overhauled Dollars for Docs to include these payments. The Physician Payment Sunshine Act, a part of the 2010 Affordable Care Act, mandated that all drug and device companies publicly report payments to doctors. The transparency effort is called Open Payments.

The government initially released some data last fall, covering the period of August to December 2013, but it was significantly redacted because of data inconsistencies. The data released Tuesday covers the period of August 2013 to December 2014. The data inconsistencies have been resolved.

All told, 1,617 companies reported 15.7 million payments valued at $9.9 billion. Nearly all of those payments — 14.9 million — were classified as "general payments," covering promotional speaking, consulting, meals, travel and royalties. They totaled $3.5 billion over the 17-month period.

Where Did the Payments Go in 2014?

A breakdown of general payments by category, not including research or payments to physician owners of a company.

Royalty or License
 
$803.5 million
Promotional Speaking
 
632.4
Consulting Fee
 
369.4
Food and Beverage
 
224.5
Travel and Lodging
 
179.1
Grant
 
85.1
Education
 
65
Ownership or Investment Interest
 
42.6
Gift
 
28.9
Nonaccredited Training
 
23.1
Space Rental or Facility Fees
 
16.1
Charitable Contribution
 
9.7
Accredited Training
 
8.1
Entertainment
 
0.4

Source: Centers for Medicare and Medicaid Services
Graphic by: Cecilia Reyes/ProPublica
Correction, July 2, 2015: This graphic included incorrect numbers for “Gift" and "Nonaccredited Training.” They have been corrected.

There were far fewer research payments, 826,000, but they were valued at $4.8 billion. The remaining payments related to ownership or investment interests that doctors had in companies. Research and ownership payments are currently not shown in Dollars for Docs.

Open Payments does not include money spent on drug samples left at doctors’ offices and doesn’t include the bulk of the money companies spend on independently administered continuing medical education, which they support with unrestricted grants. The government has tightened the rules for reporting such continuing education in the future.

From August 2013 to December 2014, Genentech Inc. spent the most on general payments, $387.7 million, mostly royalties for its drugs Rituxan, Avastin and Herceptin to City of Hope National Medical Center in Duarte, California. That was four times more than the second-ranked company, DePuy Synthes Products LLC, which spent $94.7 million, nearly all on royalties. Topera Inc., a small medical device company, came in third, with $93.1 million, almost exclusively acquisition payments to its physician founders from device maker Abbott Laboratories.

Among other pharmaceutical companies, AstraZeneca spent the most on general payments ($90.9 million), followed by Pfizer ($82.1 million) and Allergan ($70.7 million). In a statement, AstraZeneca said that it believes "it is important to be open about the way we conduct our business and how we help people through our medicines and programs. We are committed to the highest standards of conduct in all of our operations, including how we partner with physicians and medical institutions."

Royalty fees, though few in number, accounted for $803.5 million in general payment spending in 2014, more than any other category. They were followed by promotional speaking ($632.4 million) and consulting ($369.4 million). Food and beverages accounted for the highest number of payments by far, 9.4 million, but these had a relatively low value of $224.5 million.

ProPublica news application developers Mike Tigas and Lena Groeger and senior reporting fellow Annie Waldman contributed to this report.

Update, July 8, 2015: Although Stankovic declined to comment for the initial story, she has now provided the following statement: "I am very passionate about clinical research and up to date medical information; and truly enjoy educating medical professionals on various complicated disease states. There is so much new information to be learned every day in medicine, but simply there is no enough time during the day, especially if provider has a busy medical practice. Many of the interactions that doctors have with pharmaceutical industry are needed in order to stay current with newer FDA approved therapies that may cure illnesses or slow progression of the complicated diseases. Patients should be able to appreciate those medical professionals who can thoroughly discuss all available treatment options on the market and warn them about possible side effects and contraindications."

Correction, July 2, 2015: This post has been corrected to change the average amount doctors received in payments in 2014. The graphic has also been corrected.

Check Dollars for Docs to see whether your doctor has received payments from drug or medical device companies. Email us at drugs@propublica.org and tell us what you find.

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