Sunshine Act Still in the Shade - Pharmaceutical Executive

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Sunshine Act Still in the Shade

Pharmaceutical Executive


Does it go far enough?

While the PPSA mandates reporting of uncommonly large payments by drug companies to doctors, some think it still does not go far enough. The argument is small gestures can result in undue gratitude that could compromise prescribing doctors with the drug companies. There have been studies that suggest a little goes a long way to forming a relationship that—however subtly—leaves the receiver beholden or simply in a more favored disposition towards its giver.

Andrew L Younkins, in his recent paper, "The Physician Payments Sunshine Act and the Problem of Pharmaceutical Companies' Influence," released in March, believes the PPSA "does not confront the panoply of more subtle yet more powerful methods the drug industry uses to influence prescriber behavior."

Young argues that industry-sponsored CME, small gifts, drug samples, and drug detailer contacts unconsciously influence physician prescribing behavior, and that the PPSA and reporting requirements in general are a particularly poor way to deal with physician conflict of interest.

He examines the probable failure of professional codes of ethics and criminal statutes to limit conflicts of interest. His conclusion is that the only real solution is to prohibit all gifts and all direct pharmaceutical company sponsorship of any physicians' activities.

"Gift giving is central to business and to our way of life," says Young. "Yet, there are professionals who are not permitted to accept gifts: sports referees, judges, prosecutors, journalists, and others in whom we place a great deal of trust to make objective decisions. Doctors do not sell us drugs or medical devices, they prescribe them to us. Accordingly, a series of proposals should be enacted into law, or adopted by the industry and combined with strict enforcement, in order to end the common practices that lead to conflict of interest."

Not covered

Elizabeth J. Cappiello, an attorney writing at Ober & Lawler, points out in an article in her company's publication, the Health Alert Newsletter, that not covered by the PPSA is direct-to-consumer advertising expenses and marketing costs. State laws that require disclosure of this type of spending will not be preempted. Accordingly, companies will need to continue reporting this type of information to state authorities if required to do so by state law.

The PPSA also expressly excludes certain types of payments from its disclosure requirements. Under the PPSA, manufacturers are not required to disclose information concerning the following types of payments or transfers:
A transfer of anything with a value of less than $10, unless the aggregate amount transferred to, requested by, or designated on behalf of the covered recipient by the applicable manufacturer during the calendar year exceeds $100, subject to increase each year using the consumer price index
Product samples that are not intended to be sold and are intended for patient use
Educational materials that directly benefit patients or are intended for patient use
The loan of a medical device for a short-term trial period, not to exceed 90 days, to permit evaluation of the covered device by the covered recipient
Items or services provided under a contractual warranty, including the replacement of a covered device, where the terms of the warranty are set forth in the purchase or lease agreement for the covered device
A transfer of anything of value to a covered recipient when the covered recipient is a patient and not acting in the professional capacity of a covered recipient
Discounts (including rebates)
In-kind items used for the provision of charity care
A dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund
In the case of an applicable manufacturer who offers a self-insured plan, payments for the provision of health care to employees under the plan
In the case of a covered recipient who is a licensed non-medical professional, a transfer of anything of value to the covered recipient if the transfer is payment solely for the non-medical professional services of such licensed non-medical professional
In the case of a covered recipient who is a physician, a transfer of anything of value to the covered recipient if the transfer is payment solely for the services of the covered recipient with respect to a civil or criminal action or an administrative proceeding

However, Cappiello stresses again that state laws which require the disclosure of information pertaining to these types of payments are not preempted by the PPSA and companies are required to continue reporting such payments to state authorities if required to do so by state law. There is one exception. The PPSA does preempt state laws which require disclosures similar to that described in item one above.


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