SENATORS PRAISE GROWING SUPPORT FOR TRANSPARENCY IN DRUG INDUSTRY PAYMENTS TO PHYSICIANS

WASHINGTON - The newly announced backing of a leading drug maker for a national registry of industry payments to medical doctors indicates that transparency's time has come, according to Senators Chuck Grassley and Herb Kohl, co-authors of pending legislation to establish such a registry.

 

In an endorsement letter released today , Eli Lilly and Company said it supports "greater transparency in the health care system and believes this legislation represents an important step in building public trust in and understanding the relationships between the pharmaceutical and device industries and physicians."  The Senators welcomed Eli Lilly's support for the initiative, as well as the recent endorsement of the effort by the Association of American Medical Colleges. 

 

 "Eli Lilly deserves credit for its endorsement of the Sunshine Act and the leadership role it is taking for greater transparency in the pharmaceutical industry.  Eli Lilly has been posting online its payments to medical organizations and others.  The company's forward-looking endorsement of legislation to require reporting of financial relationships between drug and device makers and physicians will be valuable in building more support for this important reform," Grassley said.  "I also appreciate the persuasive and principled support of the Association of American Medical Colleges.  Transparency brings about accountability and benefits everyone, consumers most of all."

 

"Eli Lilly's endorsement goes to show that transparency of the financial ties between doctors and drug makers is not only sensible, but do-able.  So many sectors of the health industry are calling for it:  physicians, medical schools, the Journal of the American Medical Association, and now a pharmaceutical company.  We applaud Eli Lilly for endorsing transparency and hope the rest of the pharmaceutical industry follows their lead," Kohl said.

 

Last fall, Grassley and Kohl introduced the Physician Payments Sunshine Act (S.2029) in response to growing concerns about the lack of disclosure of these financial relationships.  Grassley is working to include reform legislation in a Medicare bill which the Senate may consider before its August break.

 

Below is a summary of the working version of the sunshine proposal. The news release issued in September by Grassley and Kohl marking introduction of their Physician Payment Sunshine Act can be found here.  Grassley is Ranking Member of the Senate Committee on Finance.  Kohl is Chairman of the Senate Special Committee on Aging.

 

Summary of S. 2029

Physician Payments Sunshine Act of 2008

May 13, 2008

 

(a)        REPORTING: beginning 3/31/2011 requires drug and device companies to report, on an annual basis, any payment or transfer of value to any physician. 

a.         Each electronic disclosure must include:

i.          Name of the recipient;

ii.          Recipient's city and state;

iii.         The value of the payment or other transfer of value;

iv.         The date of the payment or transfer was made;

v.         The form and reason for the payment

b.         Also requires reporting of physician ownership of any drug or device manufacturer, group purchasing organization, or distributor.

(b)        PENALTIES: $1,000 to $5,000 per failure to report, with an annual cap of $50,000, and $5,000 to $50,000 per knowing failure to report, with an annual cap of $250,000.

(c)        WEBSITE: the Secretary shall establish procedures to ensure that the information is made accessible to the public through a website, with proper context given to the payments and an appeal and correction process established.

(d)        PREEMPTION: the act preempts state reporting requirements.

(e)        DELAYED REPORTING: in the case of payments made pursuant to a product development agreement, the act allows for delayed reporting for a period of two years or until FDA approval, whichever is first.  In the case of payments made for the funding of a clinical trial, payments are delayed until clinical trial information is required to be posted under the Public Health Service Act.

(f)         DEFINITIONS:

a.         Covered drug, device, or medical supply: any drug, biological product, device, or medical supply for which payment is available under title 18, or a state plan under titles 19 or 21 of the Social Security Act.

b.         Covered recipient: a physician, a physician medical practice, or an entity or individual that receives payment at the request of or designated on behalf of a physician.

c.         Payments or other transfer of value: a transfer of anything of value in the case where the aggregate amount transferred to a covered recipient during a calendar year exceeds $500.

i.          Such term does not include: anything below $25, product samples intended for patients, certain educational materials, certain direct training, equipment loans, a transfer to a physician in a patient capacity, discounts and rebates, anything nominal in value, or in-kind items used for the provision of charity care.

d.         Physician: has the meaning given that term in section 1861(r), and does not include full-time employees of manufacturers.

 

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