Physician Payment Sunshine: French Sunshine Act and Disclosure Rules for European Countries

While U.S. companies are preparing for the final regulations from CMS to implement the Physician Payment Sunshine Act, which will likely not be released until at least late June of this year, other countries are beginning to ramp up their transparency laws regarding payments between drug, device, biological, or medical supply manufacturers and health care professionals.  Consequently, a recent Legal Alert from the law firm of Baker & McKenzie (B&M), provided an in depth analysis of several countries transparency laws, including most recently, France. 

The Physician Payment Sunshine Act requires pharmaceutical and medical device manufacturers to report certain payments they make over $10 to doctors and teaching hospitals. 

FRENCH SUNSHINE ACT 

Contained as a provision in the “Bertrand Act,” the French Sunshine Act (“FSA”) provides that health products companies must make available to the public the existence of any contract with health care providers (HCPs) and certain entities of the health sector, as well as any benefit in cash or in kind granted to the latter beyond a certain threshold.  The FSA aims at strengthening transparency in the various interactions between HCPs and life sciences companies with the objective of preventing possible conflicts of interests in the decision-making processes pertaining to health products. 

The FSA determines the companies covered by this new disclosure obligation and the covered recipients among the various categories of individual HCPs and other entities of the health sector.  The FSA is broader in scope than the pre-existing French “Anti-Gift Law” that governs interactions between health products companies and HCPs. 

Within the Bertrand Act, a reference is made to a Decree, which will likely be adopted by the Ministry of Health before this summer, to detail in essence the information that must be disclosed, the process for disclosure, and the threshold under which the new disclosure does not apply.  The Ministry of Health circulated a draft Decree at the end of February to get comments from the concerned bodies, including ANSM (French Agency for the Safety of Health Products), CNOM (National Board of the French Professional Association of Physicians), Leem (French Association of Pharmaceutical Manufacturers) and SNITEM (French Association of Medical Devices Manufacturers). 

B&M predicted that this draft will likely be amended. However, they noted that the French law does not follow the U.S. Sunshine Act and noted that “there are no equivalent disclosure obligations in the major other countries of the European Union (Belgium, Germany, Italy, Spain and UK).” 

In addition to the FSA, the Bertrand Act also requires that experts declare their interests publicly regarding their links with companies in the life sciences sector, which strengthens a precedent transparency process through the inclusion of new provisions in the French Code of Public Health (“FCPH”). 

Covered recipients: The FSA covers any HCP whose practice is regulated by the FCPH, as well as students who are going to become an HCP covered by the FSA.

The Anti-Gift Law only partly covers some of them.  In addition, the FSA covers certain legal entities of the health care sector.  The Anti-Gift Law mainly focuses on individual HCPs, but can apply to indirect interactions.

Covered companies: The FSA has a broad definition of “health product company”: in addition to medicinal products and medical devices manufacturers (already covered by the Anti-Gift Law), the new disclosure obligation is also binding for other companies, such as cosmetics manufacturers.

Information to disclose: Pursuant to the FSA, any covered company must make available to the public:

• any contract with a covered recipient: this includes contracts of any nature, in particular R&D contracts (clinical trials, observational studies…), as well as other consultancy agreements (speaker, proctoring, advisory boards…), and this also includes the so-called “hospitality conventions” (invitations to individuals HCPs at scientific or medical events for which covered companies pay the related costs, such as registration fees, travel costs, meals and accommodation expenses);
• any benefit in cash or in kind granted to a covered recipient beyond a certain threshold: this includes for example any item offered to a covered recipient9, any lunch offered to a HCP by a medical sales representative after a medical visit. 

The contracts falling in this disclosure obligation are the contracts which (i) are effective as of the 1st of January 2012 or which (ii) become effective after the 1st of January 2012.  Any benefit in cash or in kind granted to a covered recipient as from the 1st of January 2012 also falls in this scope.  Consequently, the draft Decree details the above general principles of the FSA.  Pursuant to this draft, it shall be required that covered companies disclose: 

• For each contract:
  • Name and address of the covered recipient (as well as qualification and, if any, specialty for individual HCPs);
  • Signing date of the contract;
  • Purpose of the contract;
  • Financial flows generated by the contract.
• For “hospitality“:
  • Name and address of the covered recipient (as well as qualification and, if any, specialty for individual HCPs);
  • Signing date of the “hospitality convention”;
  • Agenda of the event;
  • Identification of the services provided by the company to offer hospitality and their related costs.
• For benefits in cash or in kinds:
  • Name and address of the covered recipient (as well as qualification and, if any, specialty for individual HCPs);
  • Date at which the benefit were granted
  • Nature and value of the benefit
  • Justification explaining why the benefit were granted. 

Particular attention must be drawn to the threshold set by the draft Decree, which provides that any benefit in cash or in kind of which the value exceeds 1 Euro falls within the scope of the disclosure obligation. 

Disclosure process: The draft Decree also details the process for disclosure: 

• Timing for disclosure: covered companies will have to disclose the information 15 days after (i) the signing date for a contract or (ii) the date of the advantage (event for which hospitality is offered or date at which a benefit in cash or in kind has been granted)
• Means of disclosure: each covered companies will have to disclose the above information through an accessible page of its web site.
• Each covered company will have to use a predetermined form to be completed with the required information and put on line on its web site.
• In addition, covered companies will have to communicate, in the same time, all the forms that they disclose to the professional association of the covered recipient, if any; and will also be required to establish, at the end of each fiscal year, a report on all the disclosures occurred during the fiscal year. 

Enforcement: Pursuant to the FSA, the disclosure obligation will apply as from the date

of publication in the French Official Journal of the final version of the Decree, or at the latest as from the 1st of August 2012.  Therefore, B&M said it is likely that the final version of the Decree will be adopted and published before this summer, but will “likely be significantly amended.”  

One of the most sensitive issues arising from this draft is the disclosure to the public of the names and addresses of the covered recipients, together with information of a financial nature.  Since the draft Decree provides that covered companies should disclose to the public financial information resulting from their various interactions with covered recipients, together with the names and addresses of the concerned recipients, the question arises as to whether such requirements comply with the general principles of protecting the private lives of the recipients. 

The legal obligation of disclosure provided for by the FSA, as detailed by the current version of the draft Decree, “could be considered as a limitation to the covered recipients’ right to respect for their private lives.  Limitations to fundamental rights such as the right to respect for private life are acceptable only if they are provided for by law, respect the essence of those rights and freedoms and, subject to the principle of proportionality, are necessary for, and genuinely meet objectives of, general interest or the need to protect the rights and freedoms of others.” 

B&M noted that the current draft version of the FSA could be challenged “if it was considered as a disproportionate means to achieve its objective (preventing potential conflicts of interest), compared with the potential infringement of the covered recipients’ right to respect for their private lives.” 

BELGIUM 

Belgian law does not provide for any disclosure obligation equivalent to that required by the FSA.  However, the possibility to introduce similar requirements in Belgium is currently being discussed within the Federal Agency for Medicines and Health Products (FAMHP) and the industry associations (Pharma.be for pharmaceutical companies and Unamec for medical devices manufacturers).  Moreover, Belgian regulations already provides for transparency. 

Internal recordkeeping within pharmaceutical companies: each holder of a marketing authorization for a medicinal product must keep an internal file (i.e. a database) listing and including evidences of 

• all gifts, premiums, benefits offered to HCPs, and
• invitations and financial support at scientific events (including the hospitality and participation costs) offered to HCPs and
• all agreements entered into with HCPs. This internal file can be screened by the inspectors of the FAMHP in case of inspection. 

“Mdeon visa” for the sponsoring of scientific events: pharmaceutical and medical devices companies must, since January 1, 2007, apply for and obtain a prior visa (authorization) from Mdeon approving the hospitality offered to HCPs practicing in Belgium for scientific events taking place during more than one day, and its related costs.  If the visa is not granted, the participation costs in the event, including the hospitality, cannot be offered. 

Obligation to disclose samples given to HCPs to the FAMHP: each holder of a marketing authorization for a medicinal product must communicate to the FAMHP, before the 1st March of each year, the total number of samples per product which have been given to HCPs the calendar year before.  In addition, the marketing authorization holders must also have an internal controlling system supervising the distribution of samples to HCPs, including the names/addresses of HCPs and number of samples given to each HCP. 

As far as contracts with HCPs are concerned, there is an ethical control regime for physicians only, through the obligation for physicians to obtain the prior approval of the Physicians’ Association before entering into agreements with pharmaceutical and/or medical devices companies.

GERMANY 

From a general standpoint in Germany, there are no regulations equivalent or similar to the FSA.  As far as disclosures of service contracts with HCPs (consulting, investigator, speaker agreements etc.) and/or disclosures of granted benefits (hospitality, travel expenses funding etc.) are concerned, in general the following key rules apply, referred to as the doctrine of “employer consent:” 

• If an HCP (irrespective of his/her concrete job description: surgeon, nurse, therapist etc.) is not self-employed but rather works for an “Institution” (mostly hospitals), and
• if the HCP in such position has or could have the authority to influence, on behalf of his/her employer, purchase or procurement decisions affecting the products offered by the life science company, the concerned HCP may only accept a paid-for contractual assignment or other benefits from the life sciences company if he/she discloses the contract/the benefit (e.g. hospitality offered for a congress) to his/her employer/principal (to the attention to the head of administration), and obtains a prior approval (usually documented by obtaining a signature on the service agreement or on the return slip of a congress invitation letter). 

The employer consent is more specific than the side job permissions, a general permit required for publicly employed HCPs.  The “employer consent” and the associated data and information is only recorded internally by the “Institution” that the retained HCP works for.  The fact that a specific HCP is hired by, or receives hospitality from, a life sciences company (and the pertaining details of such relationship) is neither disclosed to any of the retained HCP’s colleagues nor made known anywhere in the public domain. 

Other than the disclosure to the supervisors/in-house lawyers of the concerned employing “Institution”, the interactions between life sciences companies and paid-for HCPs remain confidential.  Only if there is a suspicion of wrongdoing (bribery), might the contracts and payment flows be subject to investigation by prosecutors or other inspectors. 

Apart from the above stated doctrine of “employer consent”, the regional Codes of Professional Ethics for Physicians provide for an obligation to present all third party contracts on medical services to the regional medical chamber competent for the concerned physician for review of ethical compliance.  In theory, this duty is incumbent on all licensed physicians.  However, in real life the medical chambers apparently do not seem to care very much for third-party agreements.  The practical relevance of the Code’s provision is rather low. 

The German Association of Pharmaceuticals Manufacturers adopted the following rule in its Code of Practice for HCP Interactions: 

if a pharmaceutical company provides funding or financial grants to a professional association of HCPs (e.g. congress funding), it too should arrange that its role as a sponsor of the funded event is disclosed, in general by naming the company in the official congress brochure.  The amount of the funding is not to be disclosed though. 

The German Association of Pharmaceuticals Manufacturers also adopted a Code of Practice governing interactions with Patients’ Associations which requires that, once a year, any pharmaceutical company providing financial grants to a Patient Association publishes (e.g. on their website) the details of the funding, including the name of the recipients and the respective amounts. 

Self employed, office-based physicians who (in connection with outpatient care) prescribe drugs at the expense of public health insurers are as of recently considered (by many lower courts) as public officials in Germany (with the effect of much tighter anti-kickback scrutiny by the life sciences companies).  However, this classification is currently under judicial review by a supreme court committee. 

As a general observation in the present transparency context, so far the German legislators tend to pursue rather contained and targeted approaches. For example, the German Pharmaceutical Act provides for a special disclosure obligation applying to: 

• observational drug studies (as opposed to interventional clinical trials),
• with (mostly) office-based (private practice) physicians retained as investigators,
• for the purpose of monitoring the safety of a pharmaceutical product, typically prescribed at the expense of public health insurance in the outpatient sector. 

For such studies, pharmaceutical companies have to notify some details of the study and the names of the participating physicians to certain supervisory authorities and public reimbursement organizations involved in the coverage of the pharmaceutical product’s related costs. 

This shows that German legislators tend to respond to the possible needs of bringing more transparency in interactions with HCPs through a rather limited and targeted process.  Indeed, it seems that the aforementioned notification procedure (which is limited in scope to observational studies, and in practice affects interactions with outpatient doctors monitoring prescribed pharmaceutical products) mainly aims at preventing pharmaceutical companies from conducting “sham” studies only intended for the generation of more prescriptions. 

ITALY 

The Italian legislation does not provide for specific disclosure obligations equivalent to the FSA.  Interactions with HCPs are first governed by the general anti-bribery

rules.  Under such rules, HCPs are prohibited against receiving any benefit in cash or in kind from companies producing or commercializing products which are covered by the Italian National Healthcare System, and reciprocally, these companies are prohibited from granting any benefit in cash or in kind to HCPs. Moreover, the same restrictions apply also to HCPs prescribing pharmaceutical products, irrespective of the fact that the same products are covered by the Italian National Healthcare System. 

As an exception to the above rules, according to the Italian health products legislation, HCPs are allowed to benefit from “hospitality” in the context of scientific events, and to enter into consultancy agreements with life sciences companies (i.e. both pharmaceutical and medical devices manufacturers). The Italian health products legislation provides for specific transparency procedures for each of these kinds of interactions. 

Hospitality: Life sciences companies must send a notification to the Italian Health

Products Agency (AIFA) at least 60 days in advance.  This notification must detail the place and date of the meeting, the target participants, the subject of the meeting and an explanation with regard to the relationship between this subject and the medicinal product, the professional and scientific qualifications of the speakers, and a break-down of the estimated costs. The life sciences companies can proceed with the hospitality only if AIFA gives its approval within 45 days from the notification.  If the hospitality pertains to an event which is held out of Italy, or involves expenses exceeding €25,822.85, the life sciences companies must request and obtain an express authorization from the Ministry of Health. 

Professional services (e.g. consultancy) provided by a HCP to a life science company for compensation have to be authorized in advance by the HCP’s “Institution”. However, pursuant to the legislation on public employment, this prior authorization is not required for certain specific activities and are only subject to a prior notification to the Institution (e.g. hospitality offered by a life science company for a scientific or educational

event).  Moreover, on an annual basis, the company that has hired the employee to provide certain services is required to disclose to the Institution any amounts paid during the previous year to the employee for services provided to the company. 

SPAIN 

Spanish laws and regulations do not provide for any disclosure obligation equivalent to the FSA.  However, there are certain transparency regimes imposed by the industry associations of both the medicinal products sector (Farmaindustria) and the medical devices sector (FENIN). 

Transparency requirements for pharmaceutical companies: The Farmaindustria Code does not provide for any reporting or disclosure obligation in connection with admissible items which can be offered to HCPs by pharmaceutical companies.

As a matter of transparency with regard to “hospitality”, the Farmaindustria Code requires that the holding of meetings and events of a scientific and/or promotional nature must be communicated to the Surveillance Unit of Farmaindustria, if the following three requirements are met:

1. the meetings are organized – directly or indirectly – , or sponsored wholly or mainly – , by the notifying company;
2. they include at least an overnight stay; and
3. they involve the participation of at least 20 HCPs having their practice in Spain. 

However, when a company organizes the attendance of a group of more than 20 HCPs practicing in Spain to a congress or meeting organized by a third party (scientific societies, professional organizations, etc.), this must be mandatorily notified as if the event was organized by the company itself. 

The notification shall be addressed to the Surveillance Unit of Farmaindustria at least ten working days before the date of the event.  Failure to notify a scientific and promotional meeting or event, when such notification is obligatory, shall constitute an infringement of the Farmaindustria Code. Infringements of the Farmaindustria Code are qualified as minor, serious, or very serious and are fined from €6,000 to €360,000.  As far as contracts between HCPs and pharmaceutical companies, transparency is more indirectly implemented as follow: 

Research agreements: 

• clinical trials – they must obtain the approval of the Ethical Committee for Clinical Research, the approval of each of the medical centres where they take place and the authorization from the Spanish Health Products Agency (AEMPS);
• post-marketing studies which do not take the form of a clinical trial but of an observational study – they will have to be approved by the Ethical Committee for Clinical Research and by each of the medical centres where they take place.
• market research studies (including social and opinion research) they must be reported to the Surveillance Unit of Farmaindustria at least ten working days before their beginning if they fall in the scope determined by the Farmaindustria Code. 

The notifications must contain the information detailed by the Farmaindustria Code, and failure to notify a market research study, when such notification is obligatory, can constitute an infringement of the Farmaindustria Code. Infringements of the Farmaindustria Code are qualified as minor, serious, or very serious and are fined from Euro 6,000 to Euro 360,000. 

Service agreements: Pharmaceutical companies might execute agreements, subject to certain conditions, with (a) Institutions of HCPs, for the rendering of services, or (b) HPCs individually, for advisory or consultancy services such as speaker agreements, educational activities, experts meetings, etc. In both cases, the agreement must be formalized in writing and approved by the scientific service of the pharmaceutical company or by an internal supervisor as set forth by the Farmaindustria Code. 

Additionally, whenever an agreement with an Institution or a group of HCPs for a given project or activity involves the participation of 20 HCPs or more for a consideration, such agreement must be communicated prior to its date of effects to the Deontological Supervisory Unit of Farmaindustria. This communication process, however, does not involve any disclosure to the general public. 

UK 

English law does not provide for disclosure obligations equivalent to the FSA.

However, there are certain transparency regimes imposed by the industry associations of both the medicinal products sector (the Association of the British Pharmaceutical Industry (“ABPI”) and, to a more limited extent, the medical devices sector (the Association of British Healthcare Industries (“ABHI”).  The ABPI has recently amended its rules on interactions with HCPs and patient organisations. All members of the ABPI are required to comply with the spirit, as well as the letter, of the ABPI’s Code of Practice for the Pharmaceutical Industry (the “ABPI Code”). They also have separate provisions for medical devices. 

The ABPI Code does not have binding effect but compliance is a condition of ABPI membership and it has a strong influence on the activities of pharmaceutical companies, particularly since compliance with industry codes can be a relevant consideration when assessing a company’s “adequate procedures” to ensure compliance with the requirements of the Bribery Act 2010.  The ABPI Code sets down rules on disclosure obligations arising as a result of interactions with: (i) HCPs; (ii) patient organisations; and (iii) other institutions, organisations or associations that are comprised of health professionals and/or that provide healthcare or conduct research.  

The definition of “HCPs” in the ABPI Code is narrower than under the FSA and includes members of the medical, dental, pharmacy and nursing professions or others who may prescribe, supply or administer a medicine in the course of their professional activities, together with any appropriate administrative staff. There are 2 main areas of contact with HCPs that are will need to be disclosed: 

• If a company provides sponsorship for a HCP to attend meetings organised by third parties, that company must make financial details of this sponsorship publicly available. Sponsorship includes registration fees, accommodation costs and travel. The information that should be provided is limited to the total amount paid in a calendar year in respect of all recipients, the total number of recipients and the total number of attendances at meetings sponsored in that year. Individual names of recipients do not need to be provided.
• Where companies employ a HCP as a consultant or advisor, they must make details of the fees paid for services available publicly (unless the payment is for services research and development work, such as clinical trials). Companies are only obliged to disclose the total amount paid to all consultants who have provided services in a calendar year and the total number of consultants. The names of the consultants need not be given. 

In both of the above cases, companies should also take “all reasonable steps” to disclose their best estimates of similar amounts paid, or sponsorship provided, to UK HCPs by the company’s overseas affiliates.  This information should be disclosed in the calendar year in which the payments are made and should be available within 3 months of the end of the company’s financial year. 

Disclosure obligations also apply to some of a company’s interactions with patient organizations and with associations comprised of HCPs. Companies which make publicly available at a national or European level information on financial or significant non-financial assistance to patient organizations. A list of the patient organizations supported should be given together with the details of the support, which should enable an average reader to understand the significance of the support and and the monetary value of this support. 

If a patient organization is engaged to provide significant contracted services to the company, details of the services provided and the total amount paid per patient organization will also need to be made publicly available.  Where a donation or grant is made to institutions, organizations or associations that are comprised of health professionals and/or that provide healthcare or conduct research, companies will need to disclose details of the recipient organization, institution or association and the amount of such donations or grants. If there are any joint working agreements between a company and an NHS health authority, trust or similar body, an executive summary of the joint working agreement will need to be made publicly available. 

In all of the above cases, where a disclosure requirement is imposed by the ABPI Code, it should be satisfied by the company making the information available on its website. In general terms, the ABPI Code does not suggest how the disclosure requirements interrelate with privacy or trade secrecy laws. However, in relation to the disclosure requirements for patient organizations, the ABPI Code does accept the need for disclosure to be sufficient for “the average reader to form an understanding of the arrangement without the necessity to divulge confidential information“.