Physician Payment Sunshine: Ohio State Senator Introduces “Payment Disclosure” Duplicative of Federal Law

As the media continues to publish what it calls “investigative journalism” by conducting nothing more than “google” searches of doctors who collaborate and innovate with industry on a database published by ProPublica, states are unfortunately reading these articles without a critical eye.

The media coverage has often portrayed a “vast” problem among doctors and health care practitioners receiving payments from pharmaceutical and medical device manufacturers for training and educating physicians and for consulting about new therapies and devices.

This “tabloid medicine” recently caused two states to consider legislation that would ban such collaboration between physicians and industry. Earlier this week and last week, we covered HB 818, being considered in Maryland, which would prohibit a manufacturer of prescribed products from offering or giving a gift to a health care professional.

Similarly, a bill in the Ohio Senate, Senate Bill 79, sponsored by Sen. Michael Skindell (D), would require pharmaceutical manufacturers to submit annual reports that list “gifts” (including all payments for speaking and consulting) to physicians who are authorized to prescribe drugs. According to an analysis from MedCity News, the bill seems nearly identical to a provision of last year’s health reform law that is scheduled to take effect in 2013. The federal law also applies to medical device makers in addition to drug companies, unlike the Ohio proposal.

In addition, the analysis of the article noted that “under the Ohio proposal, drugmakers would be required to submit to the state an annual report detailing the value, nature and purpose of any gift provided to a doctor in connection with a drug’s promotion. The law wouldn’t apply to gifts valued at less than $25.”

The report would be due on Feb. 1 each year. Violators would be subject to a fine of up to $10,000. All of the following are exempt from disclosure under the proposed legislation:

Any gift, fee, payment, subsidy, or other economic benefit the value of which does not exceed twenty-five dollars;

Sample drugs that are given with the intent that they be distributed to patients;

The payment of reasonable compensation and reimbursement of expenses in connection with a bona fide clinical trial conducted in connection with a research study designed to answer specific questions about vaccines, new therapies, or new ways of using known treatments;

Scholarships or other support for medical students, residents, and fellows to attend bona fide educational, scientific, or policy-making conferences of an established professional association if the recipients of the scholarships or other support are selected by the association

Consequently, the bill does not actually provide a definition for “bona fide clinical trial” and “bona fide educational, scientific, or policy-making conference.” Instead, it authorizes the Director of the Department of Health to define such terms. 

The Ohio State Medical Association, the trade group representing the state’s doctors, is still studying the proposal and hasn’t taken a position on it, spokesman Jason Koma said. “OSMA supports transparency in this area as long as the responsibility for providing this transparency falls on the pharmaceutical industry — not physicians who are already burdened with far too many administrative hassles,” Koma said.

Most likely, this bill will not be approved because it is extremely redundant and duplicative of the federal Sunshine Act contained in the Affordable Care Act. It should be concerning to those stakeholders in the medical education, research, and continuing medical education (CME) community that the Director will have the power to define the terms mentioned above. This gives complete discretion to an unelected bureaucrat to decide what kind of payments are to be exempt from disclosure for educational value.

Given this kind of uncertainty, it is highly likely that pharmaceutical and device companies will refrain from providing payments for research, clinical trials or education to avoid this uncertain classification.

Ultimately, healthcare stakeholders in Ohio who care about keeping business and innovation in Ohio, advancing medicine and medical technology, and improving patient care, should speak up before it’s too late.