States, Cities Expand “Sunshine” Requirements

Aug 28, 2017

Pharma and medical product makers supported the federal Open Payments program four years ago largely to halt the adoption of multiple differing “transparency” initiatives by states and local governments. The rationale was that a national system for collecting and disclosing data on industry payments to doctors and teaching hospitals would address the growing demand for greater disclosure of how manufacturer fees and dinners and consulting arrangements may influence prescribing practices of health professionals.

The federal program has fulfilled that goal, with its data base now containing three full years of payment data; reports for 2016 posted June 30 indicate that industry made nearly $8 billion in payments to more than 800,000 physicians and hospitals last year. Although there’s a slight drop in volume of transactions, total dollars continue to rise, noted Robin Usi, director of the division of data & informatics at the Centers for Medicare & Medicaid Services (CMS). Industry paid health professionals $4.36 billion for conducting research, while general payments that include royalties, licensing fees, services, consulting, and goods and travel totaled $2.8 billion, Usi reported in an update at CBI’s annual Transparency & Aggregate Spend Conference last week.

Despite the considerable investment by the government and industry in building the Open Payments system, relatively few physicians or consumers examine the reports. Usi noted that after the June publication of full-year reports for 2016 there was a wave of articles in both the mainstream press and trade publications and a spike in traffic to the program’s website, but that the interest soon fades. 

A rising area of focus is how industry payments relate to opioid prescribing, as seen in a recent article in the American Journal of Public Health. It identifies a correlation between high opioid prescribers and industry payments, based on Open Payments data between August 2013 and December 2015 (posted online August 8, 2017 at ajph.aphapublications.org).

Despite the relative underuse of the payments data, Sunshine proponents seek to expand the federal Open Payments system to include fees and services provided to second-tier health professionals such as physician assistants and nurse practitioners. This would be tricky, manufacturers say, due to difficulties in identifying multiple categories of health workers through state licensing information systems. 

More differing requirements

At the same time, more states and local governments are establishing additional disclosure requirements. Differences in how these programs define health care professionals and in data requested threatens to make it even more complex and costly for firms to provide requested information in a timely manner.

Chicago and Nevada recently passed laws that require the licensing of sales reps and disclosure of marketing and payment activities, noted Novo Nordisk compliance official Amie Phillips Pablo at the CBI conference. The Chicago bill limits reporting to sales reps who market or promote controlled substances such as opioids, but the $750 annual licensing fee applies to full sales forces.  

State gift bans also are proliferating, with Maine and Minnesota limits on gifts to state practitioners setting the pace. Missouri proposes a similar ban, and a pending bill in California would restrict companies from offering certain “gifts” to health care professionals.

Several state disclosure laws seek to promote transparency on costs and prices as a way to pressure manufacturers to lower drug prices. Nevada’s transparency law also requires drug cost reporting on essential diabetes drugs, including rebates to PBMs and marketer contributions to nonprofits. Louisiana requires quarterly reporting of wholesale acquisition costs (WAC) to a state website on drug pricing. A Maryland law requests data on drug costs that rise over a certain threshold as a way to control price hikes on generic drugs. New York policy seeks to collect drug cost data related to supplemental Medicaid rebates. And California and other states are proposing limits on marketer co-pay cards and coupons.

The challenge for pharma companies is that all these unique programs present different templates, reporting formats and data elements that often are maintained in different parts of a pharma company, pointed out George Mina, senior director for transparency at Pfizer. And the expansion of the Sunshine initiative increases the likelihood of inappropriate analysis of payment data. The opioid crisis and concern about more costly new drugs are likely to aggravate these trends.

“Transparency is not going away,” Mina commented, although he does not expect Congress to revise the Open Payment program in the near future. But he and colleagues note that industry expenses will rise with “every state doing their own thing.”

 

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