Will the Sunshine Act Affect Physician–Pharmaceutical Interaction?

Sydney Abbott, JD
Policy Coordinator, Association of Community Cancer Centers

We are just now beginning to see some of the lesser known pieces of the 2010 Patient Protection and Affordable Care Act, such as the Federal Physician Sunshine Act (Social Security Act § 1128G), which is designed to illuminate the relationship between physicians and manufacturers. Starting by fall 2012, pharmaceutical and device manufacturers will be required to report payments to physicians and teaching hospitals. These records will be made public from September 30, 2013, onward.

Regulating manufacturers. It is important to note that the Sunshine Act regulates manufacturers; it does not impose any obligations or re - strictions on healthcare providers. It requires manufacturers to report the value, nature, purpose, and recipient information for any payment to a physician or teaching hospital. In general, disclosure is required for all meals, gifts, consulting payments, and grants; however, there are a few exceptions.

The Sunshine Act calls for manufacturers to report any individual expense of $10 or more, and if the total of all payments or gifts to a particular healthcare provider exceeds $100 in a given year, then all payments to that provider must be reported, regardless of the value. Reporting responsibility falls solely to the pharmaceutical or device manufacturer, not the individual provider. However, providers will have the opportunity to correct inaccurate reports before they are made public.

ACCC members’ interaction with manufacturers. Many members of the Association of Community Cancer Centers (ACCC) are curious how this new law will impact their interaction with manufacturers. Sales representatives can still visit physicians in their offices, and they may still provide a cup of coffee or small snack to providers at a conference. However, because of the relatively low spending limit, a drug or device company will have to publicly report taking a physician out to dinner at a restaurant to discuss a new product line. Some healthcare providers have written agreements with pharmaceutical companies to serve on scientific advisory boards.

Reporting reimbursement agreements. Written agreements providing reasonable compensation and reimbursement in connection with bona fide advisory board services are still permissible, but they will be reported and made public. Similarly, payments and reimbursement related to clinical trials are subject to reporting, but a provision in the Sunshine Act delays the public disclosure of clinical trial payments for up to 4 years. A pharmaceutical or device company may make a grant to the hospital where a physician works to host a continuing medical education program, but that grant would be reported and disclosed to the public if it were made to a teaching hospital or to another entity at the request of a teaching hospital.

Similar laws already on the books in some states. Although the federal Sunshine Act may change healthcare providers’ interactions with drug and device man ufacturers, it is certainly not the first law of its kind. Seven states and the District of Columbia already have laws on the books that impose marketing restrictions and disclosure requirements on manufacturers’ interactions with providers and institutions. The laws vary in scope, but all place reporting responsibility and restrictions on manufacturers. They can be found in California, Connecticut, Massachusetts, Minnesota, Nevada, Vermont, West Virginia, and the District of Columbia. The federal Sunshine Act, like the state laws, arose from a general commitment to transparency in relationships between industry and physicians—shining a light on these interactions.

Further guidance on the Sunshine Act was expected from the Centers for Medicare & Medicaid Services in early October, but as of the writing of this article in November 2011, that final guidance has yet to be released.

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