Sunshine Act Still in the Shade - Pharmaceutical Executive

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Sunshine Act Still in the Shade

Pharmaceutical Executive


Background

While this territory has been trampled over and over again, it still causes confusion. Also, what does the reprieve mean, and how are companies preparing to meet the terms of the law?

It all started, of course, when public outcry over physicians' conflict of interest with commercial pharmaceutical companies reached a tipping point after details of some doctors' cozy consulting relationships with drug makers began making headlines. Senator Grassley proposed the Physician Payments Sunshine Act (PPSA), which was passed by the federal government and then became part of the broader healthcare reform package. It was signed on March 23, 2010.

With some states (see sidebar) already having similar laws on the books and other states making plans for future regulation, the federal law attempts to create a single reporting model, which covers most of the requirements currently in place—and in doing so, will stem the tide of future regulation.

The overriding hope is that it will help cleanse medicine of the perceived egregious conflicts of interest between physicians and drug companies. According to some surveys, over 90 percent of all physicians have some interactions with pharmaceutical and device companies, and over 80 percent received something of value from such companies, including food, honoraria, consultant fees and research grants.

But now the transparency efforts will languish yet another year. This reporting will not be happening during this year, as was originally expected.

According to Robert Bennett, the American Academy of Family Physicians (AAFP) federal regulatory manager, CMS' proposal means that drug and device manufacturers and group purchasing organizations, or GPOs, do not need to begin data collection until final regulations are issued.

"Essentially, what CMS has done here is indicate that data collection will not begin in 2012," Bennett said. "So, for now, there's no need to worry, because it's (only) a proposed regulation."

Health writer Matt Brown, an editor at AAFP, wrote recently that the delay has drawn criticism. The sponsors of the original stand-alone legislation, known simply as the Physician Payments Sunshine Act, that then rolled into the reform's Affordable Care Act—Sens. Charles Grassley, R-Iowa, and Herb Kohl, D-Wis.,—wrote a joint letter to outgoing CMS Administrator Donald Berwick, M.D., on Oct. 3, demanding to know why publication of procedures to implement the provision had been delayed beyond the Oct. 1, 2011, deadline outlined in the health reform law. Berwick's response three weeks later included no future timeline. That raises the question that perhaps even the March 31, 2013 deadline is not firm.

The clarification CMS offered was—depending on the timing of the final rule—that manufacturers and GPOs be required to submit partial-year data on March 31, 2013. After that, the agency will aggregate the data "at the individual physician and teaching hospital level" before then providing a 45-day review period for physicians and other covered entities to contest any data with which they do not agree. The results will be made available to the public by Sept. 30, 2013.

"Under the proposal, the burden is on the manufacturer to report the information," Bennett said. "Regarding the review period, I wonder how our physicians are going to have time to do all of that."

Bennett said another item of note was that despite the time frame noted, CMS indicated that some manufacturers and GPOs might begin to collect certain data voluntarily this year. In addition, CMS is excluding OTC drugs and Class I and II devices, such as tongue depressors and elastic bandages, from the reporting requirements, choosing instead to limit reporting to drugs or biologicals that require a prescription. According to the CMS proposal, each report must include the following elements:
Recipient's name
Recipient's business address
Specialty
National Provider Identifier number, if appropriate
Amount of payment
Date of payment
Form and nature of payment, including:
Consulting fees, compensation for services other than consulting, honoraria, gifts, entertainment, food, travel, education, research, charitable contributions, royalties or licenses, current or prospective ownership or investment interest, direct compensation for serving as faculty or as a speaker for a medical education program (including CME), and grants
Description of associated covered items
Any other information deemed appropriate.

CMS further stated that it estimates "roughly 150 drug or biologic manufacturers, 1,000 device or medical supply manufacturers, and 420 GPOs will be required to submit information" on an annual basis pursuant to the provision.

Bennett said it is important to note that, although implementation is months down the road, the new rules eventually will affect all physicians, regardless of specialty.


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