What is the Sunshine Act?
July 7, 2012
The Physician Payment Sunshine Act was signed into law in March of 2010 as part of the Patient Protection and Affordable Care Act of 2009 (H.R. 3590, section 6002). It’s a law that is intended not to regulate or control the amount of funding that flows from pharmaceutical companies and medical manufacturers to doctors, but only to disclose that amount, specifically and in detail.
What does the law require?
Beginning in the first quarter of 2013, all United States drug and medical device manufacturers will be required to publically report gifts and payments made to doctors and teaching hospitals.
Payments of all kinds must be disclosed, whether they are cash or in kind transfers, including:
- Entertainment or gifts
- Consulting fees
- Research funding or grants
- Education or conference funding
- Stocks or stock options
- Ownership or investment interests
- Royalties or licenses
- Charitable contributions
- Any other transfer of value, as described by the Secretary of Health and Human Services.
How much information will they have to disclose?
The companies are required to report the receiving physician’s name, address, national provider number, and the exact amount and form of the payment made, using a standardized description. When a payment is related to marketing, education or research concerning a specific drug or product, the name of that product must also be reported.
Companies will also be required to report any physician ownership or investment interest in the company.
All of the information that is reported by the manufacturers will be available to the public.
Exact rules of implementation are still being debated at the Center for Medicare and Medicaid (CMS)– the agency tasked with organizing the data base. Lobbying by medical manufacturers and medical societies is underway to decrease the reporting guidelines. Final rules have not been decided. In September there will be a Senate hearing and discussion with CMS on this chaired by Senators Grassley and Kohl – the drafters of the Sunshine Act – and the Association for Medical Ethics has been invited to participate in this.
Are there things that they don’t have to disclose?
Certain types of data are not required to be disclosed, such as educational material that is provided for the benefit of patients, loans of items or items provided under warranty. They won’t have to disclose payments made to a doctor who is patient of the company or an employee of the company. Dividend or investment interests in a publicly traded security or mutual fund are also exempt from disclosure under this law.
Prescription drug samples and device samples won’t have to be disclosed under this law, but a separate section of the health reform law requires the reporting of this information to Health and Human Services.
Physician Payments smaller than $10 don’t have to be disclosed, but if they aggregate to $10 or more to a single doctor or hospital, they must be.
There is also a provision of the act that allows companies to delay disclosing payments for research or product development for four years, or until the product is approved for use, whichever comes first. Product development agreements for “new applications” for existing products will also be allowed this publication delay, but it isn’t clear exactly what congress means by “product development agreement.”
How far back will companies have to report about physician payments?
All of the companies were required to begin keeping complete records of all value transferred beginning January 1, 2012. The information will be required to be reported to HHS by March 31, 2013, and annually after that.
How can we find out about the payments?
The Association for Medical Ethics currently maintains a searchable online database, which contains all available information concerning payments to physicians that has already been disclosed. Many companies have voluntarily begun reporting, and many have received court orders to make the physician payments public as part of legal settlements. AME intends to expand and complete this database to include all information made publicly available in years to come under the Sunshine Act.