Drug-Rep Goodies Could Trigger 'Sunshine' Report by Company

December 15, 2011

December 15, 2011 — Drug and medical device manufacturers would have to disclose their financial relationship to physicians down to the level of a $10 bag of bagels for office staff under proposed "sunshine" regulations released yesterday by the Centers for Medicare and Medicaid Services (CMS).

CMS then would disclose online to the public the dollar amount of these goodies — and when they were dropped off at the receptionist's counter.

For physicians who might squirm about such publicity, the good news is that drug and medical device makers will not have to begin collecting that information on January 1 as originally announced.

These proposed regulations would implement provisions of the Affordable Care Act (ACA) that attempt to discourage inappropriate relationships between drug and medical device companies and physicians that might unduly influence the latter's clinical judgment.

"When people are faced with the difficult task of choosing the right doctor, they need all the information they can gather," said Peter Budetti, MD, deputy administrator of the CMS Center for Program Integrity, in a press release. "If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it."

Such companies must report any "transfer of value" of $10 or more to physicians or teaching hospitals. Payments can take the form of cash, or in-kind services or items, such as a drug-rep meal. Excluded are product samples, educational materials intended for patients, and short-term loans of medical devices. The nature of each payment must be classified — direct compensation, consulting fee, honoraria, entertainment, food and beverage, travel and lodging, royalty, and so on.

Payments less than $10 need not be reported unless total payments for the year exceed $100. In other words, if a physician received a $150 speaker's fee on Monday and a coffee mug worth $5 on Friday, the company would need to disclose both.

Companies also must tell CMS whether physicians or immediate family members have an ownership or investment interest beyond publicly traded stock or a mutual fund. The list of covered kin extends as far as a grandchild's spouse.

Drug and medical device firms originally were slated to start collecting this information on January 1, but because the proposed regulations were slow in coming, the requirement will now kick in after the final regulations are issued, which should be sometime in 2012. If time allows, CMS may instruct companies to collect data on their financial relationship with physicians for part of 2012.

The ACA requires CMS to post this information online in a searchable format by September 30, 2013.

CMS will be accepting public comments on the proposed regulations through February 17, 2012. The draft regulations explain several ways to submit comments.

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