Implementing Health Reform: The Physician Payments Sunshine Act

The Physician Payments Sunshine Act is a provision of the Affordable Care Act aimed at bringing transparency to the practice of pharmaceutical and device companies providing meals, gifts, and payments to physicians. It specifically requires that drug, device, and biologic manufacturers, as well as medical suppliers, report any "payment or other transfer of value" of $10 or greater to physicians and teaching hospitals. If payments and transfers of value to a single physician reach $100 in aggregate value for a year, the manufacturer must report all the payments.

The Centers for Medicare and Medicaid Services released a proposed rule on Dec. 14 outlining how the disclosures would work. Since CMS was a couple of months late in issuing that guidance, the proposal also gives manufacturers more time to prepare. Under the proposal, drug and device manufacturers will not need to begin collecting information this month, as required under Section 6002 of the law. Instead, they can hold off until CMS issues a final rule sometime in 2012. CMS predicted that the first reports required under the Physician Payments Sunshine Act will be publicly available by Sept. 30, 2013.

Allan Coukell, director of medical programs at The Pew Charitable Trusts in Washington, explains how the program might work and its likely impact on physicians and patient care.

Question: What information would be reported and where would the public see this information?

Mr. Coukell: The law requires drug and device companies to make public reports of transfers of value, which means gifts and payments, to physicians. The law creates a number of categories such as speakers bureaus, consulting, research, and so on. The act is comprehensive so any transfer of value must be reported. There are a couple of exceptions for drug samples as well as a provision that the reporting of payments for research can be delayed to protect commercial confidentiality. Companies do not have to report payments to physician employees. The law requires the HHS to create a public website that is searchable and sortable, and where the data can be downloaded.

Question: Do physicians need to do anything to prepare for the implementation of this provision?

Mr. Coukell: Physicians aren’t required to do anything. They don’t have to report anything. The law does ensure that they have the option to review the reports before they go public. There’s a 45-day window during which physicians can choose to take a look at what’s going to be reported. But it puts no onus on the physician to take any action.

Question: Do you think this type of public disclosure is likely to slow industry payments to physicians?

Mr. Coukell: No one knows for sure. In fact, we may never know because the Sunshine Act exists in the larger context of some evolving industry models. Generally, payments go down during recessions and as drugs come off patent, and while there are fewer heavily marketed blockbuster products. Also, we’ve had a trend in recent years of physicians being a bit less likely to see sales reps and a bit less likely to accept the lunches and gifts. Certainly there’s no reason to think that research would go down. That’s beneficial and will continue. It’s certainly possible that we’ll see some of the smaller gifts, payments, and meals trail off, possibly because there’s a cost to the company to track those items. However, there’s nothing in the law that changes the fundamental business model for the industry.

Question: What do you see as the likely effect of this regulation on prescribing and patient care in general?

Mr. Coukell: This is part of the larger context of a reevaluation by the medical profession of what constitutes an appropriate relationship between prescribers and the industry that markets products. Groups such as the Institute of Medicine and the Association of American Medical Colleges, leaders of the journals, a lot of high-profile academics, and professional societies are all saying we need to evaluate the extent of these relationships and their potential impact on care. Additionally, lot of medical schools and medical centers are instituting new industry-relations policies. I think the Sunshine Act brings some transparency to those relationships, but what will happen next is part of a larger overall shift. I do think there is something of a movement within the profession to have a little bit more of an arm’s length relationship with the marketing department. Research collaboration, on the other hand, is clearly beneficial and will continue.

Question: This provision of the health reform law has been touted as being good for patients. Is it good for physicians too?

Mr. Coukell: Transparency is good for everyone. When the Institute of Medicine did its report on conflict of interest in 2009, this was one of its major recommendations and it was part of restoring trust in the profession. I think having these relationships out in the open and having a healthy public dialogue is helpful. It’s also a chance for the drug and device companies to be able to provide context to the payments. Right now, there’s not much context. You may hear that a doctor gets a big payment, but is that going into his pocket or is it to cover the cost of tests or procedures for a clinical trial? Bringing some real substantive information to this is going to be beneficial to everybody.

Allan Coukell oversees the Pew Prescription Project, which conducts nonpartisan research related to federal oversight of drug safety. He previously practiced as a clinical pharmacist in oncology and bone marrow transplant at Victoria Hospital and London Regional Cancer Center in London, Ontario.

The Physician Payments Sunshine Act is a provision of the Affordable Care Act aimed at bringing transparency to the practice of pharmaceutical and device companies providing meals, gifts, and payments to physicians. It specifically requires that drug, device, and biologic manufacturers, as well as medical suppliers, report any "payment or other transfer of value" of $10 or greater to physicians and teaching hospitals. If payments and transfers of value to a single physician reach $100 in aggregate value for a year, the manufacturer must report all the payments.

The Centers for Medicare and Medicaid Services released a proposed rule on Dec. 14 outlining how the disclosures would work. Since CMS was a couple of months late in issuing that guidance, the proposal also gives manufacturers more time to prepare. Under the proposal, drug and device manufacturers will not need to begin collecting information this month, as required under Section 6002 of the law. Instead, they can hold off until CMS issues a final rule sometime in 2012. CMS predicted that the first reports required under the Physician Payments Sunshine Act will be publicly available by Sept. 30, 2013.

Allan Coukell, director of medical programs at The Pew Charitable Trusts in Washington, explains how the program might work and its likely impact on physicians and patient care.

Question: What information would be reported and where would the public see this information?

Mr. Coukell: The law requires drug and device companies to make public reports of transfers of value, which means gifts and payments, to physicians. The law creates a number of categories such as speakers bureaus, consulting, research, and so on. The act is comprehensive so any transfer of value must be reported. There are a couple of exceptions for drug samples as well as a provision that the reporting of payments for research can be delayed to protect commercial confidentiality. Companies do not have to report payments to physician employees. The law requires the HHS to create a public website that is searchable and sortable, and where the data can be downloaded.

Question: Do physicians need to do anything to prepare for the implementation of this provision?

Mr. Coukell: Physicians aren’t required to do anything. They don’t have to report anything. The law does ensure that they have the option to review the reports before they go public. There’s a 45-day window during which physicians can choose to take a look at what’s going to be reported. But it puts no onus on the physician to take any action.

Question: Do you think this type of public disclosure is likely to slow industry payments to physicians?

Mr. Coukell: No one knows for sure. In fact, we may never know because the Sunshine Act exists in the larger context of some evolving industry models. Generally, payments go down during recessions and as drugs come off patent, and while there are fewer heavily marketed blockbuster products. Also, we’ve had a trend in recent years of physicians being a bit less likely to see sales reps and a bit less likely to accept the lunches and gifts. Certainly there’s no reason to think that research would go down. That’s beneficial and will continue. It’s certainly possible that we’ll see some of the smaller gifts, payments, and meals trail off, possibly because there’s a cost to the company to track those items. However, there’s nothing in the law that changes the fundamental business model for the industry.

Question: What do you see as the likely effect of this regulation on prescribing and patient care in general?

Mr. Coukell: This is part of the larger context of a reevaluation by the medical profession of what constitutes an appropriate relationship between prescribers and the industry that markets products. Groups such as the Institute of Medicine and the Association of American Medical Colleges, leaders of the journals, a lot of high-profile academics, and professional societies are all saying we need to evaluate the extent of these relationships and their potential impact on care. Additionally, lot of medical schools and medical centers are instituting new industry-relations policies. I think the Sunshine Act brings some transparency to those relationships, but what will happen next is part of a larger overall shift. I do think there is something of a movement within the profession to have a little bit more of an arm’s length relationship with the marketing department. Research collaboration, on the other hand, is clearly beneficial and will continue.

Question: This provision of the health reform law has been touted as being good for patients. Is it good for physicians too?

Mr. Coukell: Transparency is good for everyone. When the Institute of Medicine did its report on conflict of interest in 2009, this was one of its major recommendations and it was part of restoring trust in the profession. I think having these relationships out in the open and having a healthy public dialogue is helpful. It’s also a chance for the drug and device companies to be able to provide context to the payments. Right now, there’s not much context. You may hear that a doctor gets a big payment, but is that going into his pocket or is it to cover the cost of tests or procedures for a clinical trial? Bringing some real substantive information to this is going to be beneficial to everybody.

Allan Coukell oversees the Pew Prescription Project, which conducts nonpartisan research related to federal oversight of drug safety. He previously practiced as a clinical pharmacist in oncology and bone marrow transplant at Victoria Hospital and London Regional Cancer Center in London, Ontario.

The Physician Payments Sunshine Act is a provision of the Affordable Care Act aimed at bringing transparency to the practice of pharmaceutical and device companies providing meals, gifts, and payments to physicians. It specifically requires that drug, device, and biologic manufacturers, as well as medical suppliers, report any "payment or other transfer of value" of $10 or greater to physicians and teaching hospitals. If payments and transfers of value to a single physician reach $100 in aggregate value for a year, the manufacturer must report all the payments.

The Centers for Medicare and Medicaid Services released a proposed rule on Dec. 14 outlining how the disclosures would work. Since CMS was a couple of months late in issuing that guidance, the proposal also gives manufacturers more time to prepare. Under the proposal, drug and device manufacturers will not need to begin collecting information this month, as required under Section 6002 of the law. Instead, they can hold off until CMS issues a final rule sometime in 2012. CMS predicted that the first reports required under the Physician Payments Sunshine Act will be publicly available by Sept. 30, 2013.

Allan Coukell, director of medical programs at The Pew Charitable Trusts in Washington, explains how the program might work and its likely impact on physicians and patient care.

Question: What information would be reported and where would the public see this information?

Mr. Coukell: The law requires drug and device companies to make public reports of transfers of value, which means gifts and payments, to physicians. The law creates a number of categories such as speakers bureaus, consulting, research, and so on. The act is comprehensive so any transfer of value must be reported. There are a couple of exceptions for drug samples as well as a provision that the reporting of payments for research can be delayed to protect commercial confidentiality. Companies do not have to report payments to physician employees. The law requires the HHS to create a public website that is searchable and sortable, and where the data can be downloaded.

Question: Do physicians need to do anything to prepare for the implementation of this provision?

Mr. Coukell: Physicians aren’t required to do anything. They don’t have to report anything. The law does ensure that they have the option to review the reports before they go public. There’s a 45-day window during which physicians can choose to take a look at what’s going to be reported. But it puts no onus on the physician to take any action.

Question: Do you think this type of public disclosure is likely to slow industry payments to physicians?

Mr. Coukell: No one knows for sure. In fact, we may never know because the Sunshine Act exists in the larger context of some evolving industry models. Generally, payments go down during recessions and as drugs come off patent, and while there are fewer heavily marketed blockbuster products. Also, we’ve had a trend in recent years of physicians being a bit less likely to see sales reps and a bit less likely to accept the lunches and gifts. Certainly there’s no reason to think that research would go down. That’s beneficial and will continue. It’s certainly possible that we’ll see some of the smaller gifts, payments, and meals trail off, possibly because there’s a cost to the company to track those items. However, there’s nothing in the law that changes the fundamental business model for the industry.

Question: What do you see as the likely effect of this regulation on prescribing and patient care in general?

Mr. Coukell: This is part of the larger context of a reevaluation by the medical profession of what constitutes an appropriate relationship between prescribers and the industry that markets products. Groups such as the Institute of Medicine and the Association of American Medical Colleges, leaders of the journals, a lot of high-profile academics, and professional societies are all saying we need to evaluate the extent of these relationships and their potential impact on care. Additionally, lot of medical schools and medical centers are instituting new industry-relations policies. I think the Sunshine Act brings some transparency to those relationships, but what will happen next is part of a larger overall shift. I do think there is something of a movement within the profession to have a little bit more of an arm’s length relationship with the marketing department. Research collaboration, on the other hand, is clearly beneficial and will continue.

Question: This provision of the health reform law has been touted as being good for patients. Is it good for physicians too?

Mr. Coukell: Transparency is good for everyone. When the Institute of Medicine did its report on conflict of interest in 2009, this was one of its major recommendations and it was part of restoring trust in the profession. I think having these relationships out in the open and having a healthy public dialogue is helpful. It’s also a chance for the drug and device companies to be able to provide context to the payments. Right now, there’s not much context. You may hear that a doctor gets a big payment, but is that going into his pocket or is it to cover the cost of tests or procedures for a clinical trial? Bringing some real substantive information to this is going to be beneficial to everybody.

Allan Coukell oversees the Pew Prescription Project, which conducts nonpartisan research related to federal oversight of drug safety. He previously practiced as a clinical pharmacist in oncology and bone marrow transplant at Victoria Hospital and London Regional Cancer Center in London, Ontario.