danazelig@cis-partners.com
As described in Matt Hotz’s article, “Transparency and its Implications for Pharmaceutical and Medical Device Manufacturers,” transparency is going to be an increasingly important theme in new government laws and regulations, including those monitoring pharmaceutical and medical device manufacturers. The most relevant example is the bill by Senators Chuck Grassley and Herb Kohl, which has recently been revised and resubmitted as the Physician Payments Sunshine Act of 2009 (S. 301, 111th Cong.).
The Sunshine Act has been drafted in an attempt to require all manufacturers of drugs, devices, biologics and medical supplies to report any payments to doctors and group purchasing organizations (GPOs) that could influence their decisions to purchase, prescribe, and endorse these products. As described in the Act:
The term ‘payment or other transfer of value’ means a transfer of anything of
value and includes… any compensation, gift, honorarium, speaking fee, consulting
fee, travel, services, dividend, profit distribution, stock or stock option
grant, or ownership or investment interest. [1]
The Pharmaceutical Research and Manufacturers of America (PhRMA) are also paying attention to the money spent on physicians. PhRMA’s updated “Code on Interactions with Healthcare Professionals for 2009” limits the amount of money manufacturers can spend on meals, promotional items, and speaking engagements for doctors.[2] This coincides with Grassley and Kohl’s desire to limit the influence manufacturers have on physicians. As explained on PhRMA’s website:
The Code is based on the principle that a healthcare professional’s care of
patients should be based, and should be perceived as being based, solely on each
patient’s medical needs and the healthcare professional’s medical knowledge and
experience.[3]
On the heels of the new PhRMA Code, which took effect on January 1, 2009, Grassley and Kohl introduced their revised Sunshine Act to the Senate with some significant changes from the 2007 version of the bill (S. 2029, 110th Cong.).[4] For example, the 2007 version required reporting of any payments totaling at least $500 per recipient per calendar year, and the 2009 version lowered the threshold to $100. The new version also increased the maximum penalties for failing to report, from $5,000 to $10,000 for individual payments, and from $50,000 to $150,000 for annual submissions. In addition, “The current version of the Sunshine Act requires the Secretary to submit each year to Congress a report of the information provided to the Secretary aggregated by manufacturer and a description of any enforcement actions taken.”[5] These revisions could mean serious changes for manufacturers if the bill is passed.
But how will the revised Sunshine Act serve to increase transparency and effectively monitor the influence manufacturers have over physicians and GPOs? Senator Grassley ties it all together nicely:
Shedding light on industry payments to physicians would be good for the
system. Transparency fosters accountability, and the public has a right to
know about financial relationships. Patients rely on their doctors' advice.
Taxpayers spend billions every year on prescription drugs and medical devices
through Medicare and Medicaid. They also fund tens of billions of dollars of
medical research each year, and the doctors conducting that research have a big
influence on the practice of medicine.[6]
Despite the proposed merits of transparency, however, the Physician Payments Sunshine Act is one Senators Grassley, a Republican from Iowa, and Kohl, a Democrat from Wisconsin have long been unsuccessfully trying to push through Congress. But pharmaceutical and device legislation is gaining traction in President Obama’s new era of transparency, and Senator Grassley is confident that the revised Sunshine Act, which would establish penalties as high as $1 million a year for non-compliant manufacturers,[7] will soon be a reality, saying:
Since we first introduced the bill, there has been a groundswell of support from
every corner. Patients want to know that they can fully trust the relationship
they have with their doctor. I am confident this legislation will pass during
the 111th Congress.[8]
In anticipation of the bill’s eventual approval, many manufacturers have already taken steps to proactively report payments and incentives provided to physicians. However, some large manufacturers have met with setbacks, finding that reporting dollars spent on lunches, honorariums, grants and speaking fees would be easier if records had been consistently maintained across their various divisions.[9] If meeting internal reporting goals has proven difficult for manufacturers, they can expect even more pressure if the revised Sunshine Act passes as anticipated. The Act would set a reporting deadline of March 31, 2011 for all manufacturers of drugs, devices, biologics, and medical supplies.
[1] The Physician Payments Sunshine Act
http://aging.senate.gov/letters/ppsabill2009.pdf
[2] PhRMA Code on Interactions with Healthcare Professionals
http://www.phrma.org/files/PhRMA%20Marketing%20Code%202008.pdf
[3] PhRMA.org
http://www.phrma.org/code_on_interactions_with_healthcare_professionals/
[4] Senators Grassley and Kohl Introduce a Revised Version of the Physician Payments Sunshine Act of 2009
http://www.ebglaw.com/showclientalert.aspx?Show=9667
[5] Senators Grassley and Kohl Introduce a Revised Version of the Physician Payments Sunshine Act of 2009
http://www.ebglaw.com/showclientalert.aspx?Show=9667
[6] Grassley, Kohl Continue Campaign To Disclose Financial Ties Between Doctors And Drug Companies
http://www.medicalnewstoday.com/articles/136470.php
[7] The Physician Payments Sunshine Act
http://aging.senate.gov/letters/ppsabill2009.pdf
[8] Grassley, Kohl Continue Campaign To Disclose Financial Ties Between Doctors And Drug Companies
http://www.medicalnewstoday.com/articles/136470.php
[9] New Rules on Doctors and Medical Firms Amid Ethics Concerns
http://www.nytimes.com/2009/01/24/business/24device.html?_r=3&pagewanted=2
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