Payments to Physicians, Medical Schools to Be Illuminated Under New Reform Law

Pharmaceutical manufacturers and makers of medical devices and supplies will be required to report virtually all payments to physicians or teaching hospitals as part of sunshine provisions included in the health reform law.

The law, signed by President Obama on March 23, 2010, includes provisions of the Physician Payments Sunshine Act, which was introduced by Senators Chuck Grassley (R, Iowa) and Herb Kohl (D, Wis) to enhance transparency in the relationships between physicians and the makers of products paid for by Medicare, Medicaid, or the State Children's Health Insurance Program. These provisions aim to prevent physicians and companies from concealing potential financial conflicts of interests, a problem highlighted by several high-profile cases in which physicians have failed to report their industry ties.

Recent publications have raised concerns that such relationships may skew scientists' work. For example, analysis of the scientific literature by researchers from the Mayo Clinic found that authors who had a financial relationship with manufacturers of diabetes medications, particularly rosiglitazone, were 3 times more likely than those without such conflicts to express favorable views about the safety of rosiglitazone (Wang AT et al. BMJ. 2010;340[181]:c1344). In light of emerging data that suggest an increased risk of certain adverse cardiac outcomes in patients taking rosiglitazone compared with other diabetes therapies, including data from a 2007 meta-analysis (Nissen SE and Wolski K. N Engl J Med. 2007;356[24]:2457-2471) and a randomized controlled trial (Home PD et al. Lancet. 2009;373[9681]:2125-2135), the US Food and Drug Administration is currently reviewing the safety of this drug.

While the new law does not prohibit financial relationships between manufacturers and physicians or teaching hospitals, it will require manufacturers to disclose individual payments or goods or services with a value of $10 or more and cumulative payments or gifts exceeding $100, including travel, meals, consulting fees, honoraria, research funding, and royalties. Samples, loaner devices, educational materials for patients, and certain investments are excluded.

“The disclosure [provisions] are an important, necessary, and long-overdue first step at a national level,” said Sydney M. Wolfe, MD, director of the Health Research Group of Public Citizen, a consumer advocacy organization.

Allan Coukell, BScPharm, director of the Pew Prescription Project, a consumer health initiative of the nonprofit Pew Charitable Trusts, said the effects on pharmaceutical marketing practices are hard to predict, but he suggested that companies might choose to eliminate small payments such as lunches and gifts to minimize the burden of complying with the law.

Previously, some pharmaceutical companies and a few states had established databases of payments to clinicians. But the federal database, which will be administered by the Department of Health and Human Services (DHHS), will include more comprehensive information. For example, it will indicate the specific drug or device the payment was intended to promote. It will also be searchable. Wolfe said it will provide institutions easier access to information about an individual's commercial relationships, allowing them to verify voluntary disclosures.

The federal database will not include information about payments to other nonphysician providers of health care and nonteaching health facilities, as do some state databases, noted Coukell. For example, Massachusetts requires disclosures of payments to hospitals, nursing homes, pharmacists, health plan administrators, and other health care workers who prescribe, dispense, or purchase drugs or devices.

Manufacturers who do not comply will face fines ranging from $10 000 to a maximum of $1 million per year. Coukell acknowledged that the fines may not be a large deterrent, but said that the transparency afforded by the database may promote a change in the culture of medicine and industry related to such payments.

“Ultimately, the change is cultural,” he said. “Greater transparency is a part of that. It will allow a better understanding and greater scrutiny of relationships in the future.”

Wolfe amplified this point. “With more and more disclosure, it will understandably become more embarrassing to physicians in this country and will cause severance between medical schools and the people who are getting all the money,” he said.

The law requires manufacturers to begin recording payments in 2012 and to report them to the DHHS by March 2013. The database is expected online and available to the public by the end of September 2013. The provisions also require the DHHS to submit annual reports on the data to Congress and to each state. (The Pew Prescription Project offers additional information about the Sunshine Provisions on its Web site, at http://www.prescriptionproject.org/sunshine_act.)

Both Coukell and Wolfe noted that ongoing oversight and revision of the law may be necessary if drug companies and other manufacturers shift their marketing tactics.

“There is going to be a need for ongoing scrutiny to ensure that companies are complying in good faith,” Coukell said.