Physician Payment Sunshine: JAMA New Law and Ongoing Scrutiny

A recent article in the Journal of the American Medical Association (JAMA) highlighted how payments to physicians and medical schools (among other things) will soon be “illuminated under the new reform law” passed in the health care reform legislation—also known as the Physician Payment Sunshine Provisions.

 

The provision essentially requires that “pharmaceutical manufacturers and makers of medical devices and supplies must report virtually all payments to physicians or teaching hospitals as part of sunshine provisions included in the health reform law.” In doing so, the Obama administration, and Senators Charles Grassley (R-IA) and Herb Kohl (D-WI), who co-sponsored the bills, hope to “enhance transparency in the relationships between physicians and the makers of products paid for by Medicare, Medicaid, or the State Children’s Health Insurance Program.”

 

Fortunately—for patients and doctors—the new law “does not prohibit financial relationships between manufacturers and physicians or teaching hospitals.” It only requires “manufacturers to disclose individual payments or goods or services with a value of $10 or more and cumulative payments or gifts exceeding $100, including travel, meals, consulting fees, honoraria, research funding, and royalties.”

 

Excluded from this kind of reporting are “samples, loaner devices, educational materials for patients, and certain investments.”

 

The collection of data will then be placed in a federal database, which will be administered by the Department of Health and Human Services (DHHS), and it is supposed to include more comprehensive information than some states already require. For example, it will indicate the specific drug or device the payment was intended to promote. The database is also supposed to be user friendly by making it searchable, so that institutions have easier access to information about an individual’s commercial relationships, “allowing them to verify voluntary disclosures.”

 

The federal database will not include information about payments to other non-physician providers of health care and nonteaching health facilities, as do some state databases. Consequently, the law requires manufacturers to begin recording payments in 2012 and to report them to the DHHS by March 2013, and the database is expected online and available to the public by the end of September 2013.

 

Critics of industry payments who maintain that this database is needed because of “several high-profile cases in which physicians have failed to report their industry ties,” ignore the fact that these exceptions are rare, and mostly due to vague reporting rules and disclosure forms at the institutions themselves. What they also ignore is that in requiring payments, companies may begin to “eliminate small payments such as lunches and gifts to minimize the burden of complying with the law.” Often, such lunches are the only time physicians have to speak with members of industry to learn about new advances, medicines, and treatments, and without such opportunities, patients will be left with old and outdated methods to cope with changing and more complex diseases.

 

Eric Campbell, PhD at the Harvard Institute of Health Policy recently stated that he and his group are looking forward to mining the sunshine data vs. the CMS database of prescribing to determine if physicians are over and inappropriately prescribing drugs. Given they will be the judge and jury on what constitutes inappropriate or over prescribing this sounds more like intimidation which may in the end hurt patients and physicians particularly those specializing in rare diseases who use drugs that may not fit into a nice box.

 

While enhancing transparency is a noble goal, and one which we support, policymakers have yet to come up with a way to implement such reporting requirements. Thus far, they have only suggested that such payments will be posted publicly on a website. No one has explained just exactly who is going to process the paperwork generated by such reporting, how that data is going to be reported and entered, the money and staff required to handle such reporting, and other concerns such as privacy and feasibility.

 

Another problem that Sydney M. Wolfe, MD, director of the Health Research Group of Public Citizen points out is that “more and more disclosure” will make working with industry—a crucial partnership that for decades has led to tremendous progress—more “embarrassing to physicians in this country.” Such an effect “will cause severance between medical schools and the people who are getting all the money,” and will cause the number of breakthroughs and advances in medicine to decline sharply.

 

What is more problematic about such a severance is that critics of industry payments for services such as Wolf and Allan Coukell, director of the Pew Prescription Project, believe that “there is going to be a need for ongoing scrutiny to ensure that companies are complying in good faith.” Consequently, to use these viewpoints reflects JAMA’s continuing trend of isolating their views from the practice of medicine by failing to ask even one single practicing physician about this law, and instead relying on enemies of collaboration with industry.

 

This practice, and the call for “ongoing scrutiny” is unwarranted because such payments are already being disclosed by major pharmaceutical companies such as GlaxoSmithKline, Merck, Medtronic, Pfizer, and many others, in addition to all the individual disclosure policies of universities, institutions, journals, and professional organizations.

 

As a result, although such “provisions aim to prevent physicians and companies from concealing potential financial conflicts of interests,” the new Sunshine Act also creates problems of its own by burdening organizations and companies with reporting requirements that will drain staff and significant amounts of time and resources to account for every single instance of a “potential” conflict.

 

Accordingly, calling for ongoing scrutiny at a time when 30 million people are being added to our health care system will only divert much needed staff and resources away from carrying out clinical studies, research, and applications for grants that will lead to healthier patients and better outcomes. What policymakers should be focusing on are ways to implement the Sunshine Act that increase transparency, while also allowing companies and organizations to retain their staff and resources so that they can continue their central mission of bringing advances in medicine to patients. 

 

To do so, information contained in the federal database and made public must portray more than just numbers and values. Information should speak more about the impact these doctors make on educating physicians and patients, creating cures and vaccines, reducing disease rates, and increasing the survival of us all. That kind of transparency will truly show patients that relationships with industry are essential in bringing about meaningful health care reform.

What we also need is for politicians to cease their nonproductive blaming of the pharmaceutical and device industry for all the world’s problems and instead adopt the same model that HHS and the White House has adopted for the Health IT industry, one which embraces and encourages innovation. In the same way industry needs to roll up their sleeves and help educate our customers (health care providers and patients) on how this reform will benefit them, to make health care reform more understandable and less formidable.

In the end, because health care reform will bring a huge transformation to all of health care and our industry, we must work together to make it successful so that everyone will benefit, especially our patients.