Who is Attacking the Sunshine Act: Part 2

November 2, 2012

Industry Wants to Exclude its Overseas Manufacturing Facilities from Reporting

As we noted in Part 1, CMS was supposed to finalized regulations for the implementation of the Sunshine Act by October, 2011. It’s over a year later, and we still have no published regulations. Why?

"Well," says Nial Brennan, a spokesman for CMS, "that agency has had to wade through a great many challenges to the proposed regulations from the 'stakeholders' in the statutory scheme." AME decided to take a look at the objections that were filed in response to the regulations.

50 pages of objections from Big Pharma

It honestly came as no surprise to us that Big Pharma, while paying lip-service to the idea of transparency, presented the longest set of objections.

On February 17, 2011, the last possible day on which objections to the proposed regulations could be considered, the Pharmaceutical Research and Manufacturers of America (“PhRMA”), big Pharma’s lobbying organization, sent in a 50-page set of objections to the proposed regulations. Because of this careful timing by counsel for PhRMA, their objections went unanswered by other stakeholders or consumer groups. Member companies of PhRMA include all of the major American pharmaceutical manufacturers, including Eli Lilly and Company, GlaxoSmithKline, Pfizer, Merck & Co., Johnson & Johnson, etc.

While the list of objections was long, and ranged from the logical and well-presented to the obscure and petty, the first objection raised, and the one that big Pharma gave the longest argument to, was the most disturbing.

PhRMA argued that the Sunshine Act should be applied only to manufacturers making drugs in the United States. In other words, if the drug companies happen to be foreign companies (or foreign subsidiaries of US companies), those companies shouldn’t have to report the payments they are making to US doctors (for research, for royalties, for speaking engagements, or anything else), even though the drugs that they are making are marketed and sold in the US


PhRMA’s lawyers are arguing – extensively and artfully – that things like paying a US doctor to give advice about a drug or just selling and marketing a product in the US does not mean that a company is actually “operating” in the US. And while this argument does not make sense to us, particularly, they are clearly hoping that it will convince CMS – and if not CMS, perhaps a federal district court judge.

Why do United States drug companies care if the Sunshine Act covers foreign manufacturers?

That is a very good question. And we are guessing that we know the answer to it. The US members of PhRMA sell and distribute drugs that are manufactured by their subsidiaries, and a great many of those subsidiaries are not US-based.

If this “exception” is accepted by the CMS and Congress, could these large multi-nationals avoid reporting payments to doctors simply by funneling the payments through their subsidiaries?

Well, they would certainly have a lot of subsidiaries to choose from. Here, for example, are the subsidiaries for two of the largest US-based, multi-national drug companies, Eli Lilly & Company and Abbott Laboratories.

Eli Lilly & Company Subsidiaries:

State or Jurisdiction of Incorporation or Organization
Alnara Pharmaceuticals, Inc. Massachusetts
AME Torreview LLC Delaware
Andean Technical Operations Center Peru
Applied Molecular Evolution, Inc. Delaware
Avid Radiopharmaceuticals, Inc. Pennsylvania
del Sol Financial Services, Inc. British Virgin Islands
Dista Ilac Ticaret Ltd. Sti. Turkey
Dista, S.A. Spain
Dista-Produtos Quimicos & Farmaceuticos, LDA Portugal
E L Management LLC Delaware / Canada
Elanco Animal Health Ireland Limited Ireland
Elanco Animal Health, Korea, Ltd. Korea
Elanco Trustees Limited Ireland
Elanco-Valquimica, S.A. Spain
ELCO for Trade and Marketing, S.A.E. Egypt
ELCO Insurance Company Limited Bermuda
ELCO International Sales Corporation US Virgin Islands
ELCO Management, Inc Delaware
ELGO Insurance Company Limited Bermuda
Eli Lilly (B.V.I.) Holding Company Unlimited British Virgin Islands
Eli Lilly (Malaysia) Sdn. Bhd. Malaysia
Eli Lilly (NZ) Staff Benefits Custodian Limited New Zealand
Eli Lilly (Philippines), Incorporated Philippines
Eli Lilly (S.A.) (Proprietary) Limited South Africa
Eli Lilly (Singapore) Pte. Ltd. Singapore
Eli Lilly (Suisse) S.A. Switzerland
Eli Lilly and Company Indiana
Eli Lilly and Company (India) Pvt. Ltd. India
Eli Lilly and Company (Ireland) Limited Ireland
Eli Lilly and Company (Ireland) Trustees Limited Ireland
Eli Lilly and Company (N.Z.) Limited New Zealand
Eli Lilly and Company (Taiwan), Inc. Taiwan
Eli Lilly and Company Limi United Kingdom
Eli Lilly Asia Pacific SSC Sdn Bhd Malaysia
Eli Lilly Asia, Inc. Delaware
Eli Lilly Asian Operations, Limited Hong Kong
Eli Lilly Australia Pty. Limited Australia
Eli Lilly Benelux S.A. Belgium
Eli Lilly B-H d.o.o. Bosnia
Eli Lilly Canada Inc. Canada
Eli Lilly CR s.r.o. Czech Republic
Eli Lilly Danmark A/S Denmark
Eli Lilly de Centro America, S.A. Guatemala
Eli Lilly de Mexico, S.A. de C.V. Mexico
Eli Lilly do Brasil Limitada Brazil
Eli Lilly Egypt, S.A.E. Egypt
Eli Lilly European Clinical Trial Services SA Belgium
Eli Lilly Export S.A. Switzerland
Eli Lilly farmacevtska druzba, d.o.o. Slovenia
Eli Lilly Finance, S.A. Switzerland
Eli Lilly Ges.m.b.H. Austria
Eli Lilly Group Limited United Kingdom
Eli Lilly Group Pension Trustees Limited United Kingdom
Eli Lilly Holding Company Ltd. United Kingdom
Eli Lilly Holdings Ltd. United Kingdom
Eli Lilly Hrvatska d.o.o. Croatia
Eli Lilly Industries, Inc. Delaware
Eli Lilly Interamerica Inc., y Compania Limitada Chile
Eli Lilly Interamerica, Inc. Indiana
Eli Lilly International Corporation Indiana
Eli Lilly International Trading (Shanghai) Company Limited China
Eli Lilly Israel Ltd. Israel
Eli Lilly Italia S.p.A. Italy
Eli Lilly Japan K.K. Japan
Eli Lilly Nederland B.V. Netherlands
Eli Lilly Nederland Holding B.V. Netherlands
Eli Lilly Nigeria Ltd. Nigeria
Eli Lilly Norge A.S Norway
Eli Lilly Pakistan (Pvt.) Ltd. Pakistan
Eli Lilly Polska Sp.z.o.o. (Ltd.) Poland
Eli Lilly Regional Operations GmbH Austria
Eli Lilly Romania SRL Romania
Eli Lilly S.A. Switzerland
Eli Lilly S.A. — Ireland Branch Ireland
Eli Lilly Services, Inc. British Virgin Islands
Eli Lilly Slovakia s.r.o. Slovakia
Eli Lilly Spain Holding ETVE, S.L. Spain
Eli Lilly Suzhou Pharmaceutical Co. Ltd. China
Eli Lilly Sweden AB Sweden
Eli Lilly Trading S.A. Switzerland
Eli Lilly USA, LLC Indiana
Eli Lilly Vostok S.A., Geneva Switzerland
Eli Lilly y Compania de Mexico, S.A. de C.V. Mexico
Eli Lilly y Compania de Venezuela, S.A. Venezuela
EndoClone Incorporated Delaware
GEMS Services S.A. Belgium
GEMS Services S.A. — CC Branch Belgium
Greenfield-Produtos Farmaceuticos, Lda. Portugal
Hypnion, Inc. Delaware
ICOS Corporation Washington
ImClone GmbH Switzerland
ImClone LLC Delaware
ImClone Systems Corporation Delaware
ImClone Systems International GmbH Germany
Irisfarma S.A. Spain
Ivy Animal Health, Inc. Delaware
Kinsale Financial Services, Ltd. Ireland
Lilly Asia Ventures Fund I, L.P. Cayman Islands
Lilly Asia Ventures Fund II, L.P. Cayman Islands
Lilly Cayman Holdings Cayman Islands
Lilly China Research and Development Co., Ltd. China
Lilly del Caribe, Inc. Cayman Islands
Lilly Deutschland GmbH Germany
Lilly France S.A.S. France
Lilly Global Services, Inc. Indiana
Lilly GmbH Germany
Lilly Holdings GmbH Austria
Lilly Holdings, LLC Delaware
Lilly Hungaria KFT Hungary
Lilly Ilac Ticaret Limited Sirketi Turkey
Lilly Korea Ltd. Korea
Lilly Nederland Holding B.V. Netherlands
Lilly Pharma Fertigung & Distribution GmbH Germany
Lilly Pharma Holding GmbH Germany
Lilly Pharma Ltd. Russia
Lilly Pharma Produktion GmbH & Co. KG Germany
Lilly Portugal – Produtos Farmaceuticos, Lda. Portugal
Lilly S.A. Spain
Lilly Singapore Centre for Drug Discovery Pte. Ltd. Singapore
Lilly Trading Co. LTD China
Lilly USA, Corp. Indiana
Lilly USA, LLC Indiana
Lilly Ventures Fund I LLC Delaware
Lilly Ventures Management Company LLC Delaware
Lilly-NUS Centre for Clinical Pharmacology Singapore
OY Eli Lilly Finland AB Finland
Pharmabrand, S.A.I.C. Greece
Pharmaserve-Lilly S.A.C.I. Greece
PT. Eli Lilly Indonesia Indonesia
SGX Pharmaceuticals, Inc. Delaware
Spaly Bioquimica, S.A. Spain
UAB Eli Lilly Lietuva Lithuania
Vanthys Pharmaceutical Development Private Limited India
Vital Pharma Productos Farmaceuticos Portugal

Abbott Laboratories Foreign Subsidiaries:

Foreign Subsidiaries Country in Which Organized
Alnara Pharmaceuticals, Inc. Massachusetts
Abbott Laboratories Argentina, S.A. Argentina
Abbott Australasia Pty. Limited Australia
Abbott Australia Holdings (Pty) Ltd. Australia
Abbott Laboratories Executive Superannuation Pty.Limited Australia
Abbott Laboratories Superannuation Pty. Limited Australia
Knoll Australia Pty. Ltd. Australia
Abbott Gesellschaft m.b.H. Austria
Abbott Hospitals de Costa Rica Ltd. Bahamas
Abbott Hospitals Limited Bahamas
Abbott Laboratories de Costa Rica Ltd. Bahamas
Abbott Laboratories (Bangladesh) Ltd. Bangladesh
Murex Diagnostics International, Inc. Barbados
Abbott, S.A. Belgium
Abbott Belgian Pension Fund A.S.B.L. Belgium
Abbott Ireland Bermuda
Abbott Biotechnology Ltd. Bermuda
Abbott Laboratories (Bermuda) Ltd. Bermuda
Abbott Laboratorios do Brasil Ltda. Brazil
Abbott Laboratories, Limited Canada
International Murex Technologies Corporation Canada
Abbott Laboratories de Chile Limitada Chile
Shanghai Abbott Pharmaceutical Co., Ltd. 75%* China
Abbott Laboratories de Colombia, S.A. Colombia
Abbott Laboratories s.r.o. Czech Republic
Abbott Laboratories A/S Denmark
Abbott Laboratorios del Ecuador Cia. Ltda. Ecuador
Abbott Limited Egypt Egypt
Abbott, S.A. de C.V. El Salvador
Abbott Equity Holdings Ltd. England
Abbott Investments Limited England
Abbott Laboratories Limited England
Abbott (UK) Finance Limited England
Abbott (UK) Holdings Limited England
Abbott Laboratories Trustee Company Limited England
Abbott Vascular Devices Limited England
Abbott Vascular Devices (2) Limited England
IMTC Holdings (UK) Limited England
Knoll Ltd. England
Knoll Pharma Ltd. England
Knoll Pharmaceuticals Company Ltd. England
Lupharma UK Holding One Limited England
MediSense Britain Limited England
MediSense Contract Manufacturing Limited England
MediSense UK Limited England
Laboratories Ltd. Hong Kong
Murex Biotech Limited (UK) England
Murex Biotech (UK) Limited England
Abbott OY Finland
Abbott France S.A.S. France
Alcyon Analyzer SAS France
Knoll Sante Active S.A. France
Abbott Holding G.m.b.H. Germany
Abbott G.m.b.H. & Co. KG Germany
Abbott Diagnostics G.m.b.H Germany
Abbott Management GmbH Germany
GAG Aktiengesellschaft fur Wohnungs- Germany
Heidelberg Innovation GmbH Germany
Heidelberg Innovation GmbH & Co. Germany
S.T.E.P. Personalentwicklungs-gesellschaft mbH Germany
Abbott Laboratories (Hellas) S.A. Greece
Abbott Grenada Limited Grenada
Abbott Laboratorios, S.A. Guatemala
Abbott Laboratories Limited Hong Kong
Abbott Laboratories (Hungary) Ltd. Hungary
Abind Healthcare Private Limited India
Abbott India Limited 58.2% India
Lenbrook Pharmaceuticals Ltd. India
P. T. Abbott Indonesia 99.99% Indonesia
Abbott Laboratories, Ireland, Limited Ireland
Abbott Ireland Ltd. Ireland
Abbott Vascular Devices Ireland Limited Ireland
BiodivYsio Limited Ireland
Murex Medical Research Limited Isle of Mann
Technology License Company Limited Isle of Mann
Abbott S.p.A. Italy
Autonomous Employee Welfare Fund for Italy
Abbott S.p.A. Dirigenti
Abbott West Indies Limited 51% Jamaica
Consolidated Laboratories Limited Jamaica
Abbott Japan K.K. Japan
Dainabot Co., Ltd. 82% Japan
Hokuriku Seiyaku Co., Ltd. Japan
Knoll Japan KK Japan
Tofuku Shoii K.K. Japan
Abbott Korea Limited Korea
Abbott Middle East S.A.R.L. Lebanon
Abbott Laboratories (Malaysia) Sdn. Bhd. Malaysia
Abbott Laboratories de Mexico Mexico
Abbott Logistics B.V. The Netherlands
Abbott B.V. The Netherlands
Abbott Laboratories B.V. The Netherlands
Abbott Finance B.V. The Netherlands
Abbott Holdings B.V. The Netherlands
Knoll B.V. The Netherlands
MediSense Europe B.V. The Netherlands
IMTC Holdings B.V. The Netherlands
IMTC Finance B.V. The Netherlands
Abbott Laboratories (N.Z.) Limited New Zealand
Abbott Norge AS Norway
Abbott Laboratories (Pakistan) 83.42% Limited Pakistan
Abbott Laboratories, C.A. Panama
Abbott Overseas, S.A. Panama
Abbott Laboratorios S.A. Peru
Abbott Laboratories (Philippines) Philippines
Knoll Philippines, Inc. Philippines
Abbott Laboratories Sp. z.o.o. Poland
Abbott Laboratorios, Limitada Portugal
Abbottfarma – Promocao de Produtos Farmaceuticos, Limitada Portugal
Abbott Laboratories (Singapore) Private Limited Singapore
Abbott Laboratories Slovakia s.r.o. Slovakia
Abbott Laboratories South Africa Pty. Ltd. South Africa
Knoll Pharmaceuticals South Africa Pty. Ltd. South Africa
Abbott Laboratories, S.A. Spain
Abbott Cientifica, S.A. Spain
Bioresearch S.A. Spain
Murex Diagnosticos, S.A. Spain
Liade S.A. Spain
Abbott Scandinavia A.B. Sweden
Abbott A.G. Switzerland
Abbott Laboratories S.A. Switzerland
Abbott Finance Company S.A. Switzerland
Knoll AG Switzerland
Knoll Bio-Research S.A. Switzerland
Abbott Laboratories Limited Thailand
Abbott Laboratuarlari Ithalat Ihracat Turkey
Ve Tecaret Limited Sirketi
Abbott Laboratories Uruguay Limitada Uruguay
Abbott Laboratories, C.A. Venezuela


* Shanghai Abbott Pharmaceutical Co., Ltd. is 75% owned by Abbott

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