The Sunshine Act Calls for Greater Transparency in Industry-Doctor Relationships 

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Like most government programs, the well-intentioned Sunshine Act will have some bumps along the way as it is fully implemented.

Signed into law on March 23, 2010, the Patient Protection and Affordable Care Act represents the most significant overhaul of the U.S. health-care system since the passage of Medicare and Medicaid in 1965. Because of the law’s sheer scope, parts of it still remain obfuscated by its 2,400 or so pages. Along with creating universal access to care, the legislation is also designed to deter overutilization of services and perverse incentives that adversely affect the delivery of care. One such part is the Physician Payments Sunshine Act, which will require pharmaceutical and medical device manufacturers to report most payments or gifts to physicians and teaching hospitals on a national level.

How will the sunshine act affect relationships?

The history of Sunshine Acts dates back to the Government in the Sunshine Act enacted September 13, 1976, which is one of a number of Freedom of Information Acts that are intended to create greater transparency in government. The obvious intent is to “shine a light” on the entities that abuse the system for financial gain.

The Physician Payments Sunshine Act released its final rule in February, but the first reports are not due until March 31, 2014. In general, the Sunshine Act requires applicable manufacturers of drugs, devices, biologicals, or medical supplies to report annually to the Secretary of Health & Human Services certain payments or other transfers of value to physicians and teaching hospitals. It also obliges applicable manufacturers and applicable group purchasing organizations to report certain information regarding the ownership or investment interests held by physicians or the immediate family members of physicians in such entities.

How will the Sunshine Act affect working relationships between oncologists and members of the pharmaceutical industry? According to the Centers for Medicare & Medicaid Services (CMS), sales representatives can still visit oncologists in their practices, and they can still provide small snacks at conferences. However, given the relatively low spending cap, representatives from industry will have to publically report business dinners when a doctor is present.

Many leading oncologists have written agreements with pharmaceutical companies to serve as consultants on scientific advisory boards. Although these agreements fall within the purview of the Sunshine Act, reasonable compensation and reimbursement for serving on bona fide advisory boards is still permitted as long as they are reported. This also holds true for payments related to clinical trials, but a provision in the Sunshine Act delays the public disclosure of clinical trial payments for up to 4 years. 

Just how restrictive are the new regulations?

The Sunshine Act requires manufacturers to report individual expenses of $10 or more, and if the total of all payments or gifts to a health-care provider exceeds $100 in a given year, then all outlays to that provider must be reported, regardless of the value. It’s worth noting that reporting responsibility falls solely to the pharmaceutical or device manufacturer, not the individual health-care provider.

However, one part of the CMS final rule that has raised eyebrows among some health-care policy experts is an exception in payments made to physicians speaking at Continuing Medical Education (CME) programs. According to the final rule, companies will not be required to report payments to speakers at accredited CME meetings, as long as the pharmaceutical companies do not personally select the speakers.

In short, that means that accredited third-party CME providers will be exempt from reporting payment to speakers. Some policy experts point out that speakers at CME programs rarely give talks that are critical of the sponsors drugs or therapies, and for many “key opinion leaders,” paid speaking engagements constitute a good portion of their income.

Data concerning financial relationships between industry and health-care providers have been collected for years. A 2007 study in The New England Journal of Medicine1 found that 94% of U.S. physicians had a relationship with the drug and device industries; 83% received gifts, and 28% received payments for services such as consulting or research participation. The study also found that commercial funding for CME has increased; industry currently pays for more than one-third of all CME offerings.

Critics of the Sunshine Act and other government oversight efforts are quick to point out that interaction between industry and health-care providers is a central part of the working relationships that are part of our bench-to-bedside process. In other words, industry-doctor relationships are a seamless way to provide overworked physicians with the latest clinical data and upcoming developments in the pipeline. Naturally, like most government programs, the well-intentioned Sunshine Act will have some bumps along the way as it is fully implemented. ■


1. Campbell EG, Gruen RL, Mountford J, et al: A national survey of physician-industry relationships. N Engl J Med 356:1742-1750, 2007.

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