Sunshine Dims with Delay on Big Pharma Payment Reports to Docs

Here’s another arrow for the quiver of people exasperated with government.

As part of its health-care reform, the Obama Administration proposed that drug companies be made to disclose payments they make to doctors for research, consulting, speaking, travel and entertainment. The rationale, as reported by The New York Times, was evidence that such payments can influence treatment decisions and boost costs by encouraging the use of more expensive drugs and medical devices.

Disclosure, the thinking goes, would make doctors more disposed toward making decisions in the best interests of patients instead of their bottom lines. As we’ve reported, drug and device company largess can be ripe for conflicts of interest.

According to The Times, about 1 in 4 doctors takes cash payments from drug or device makers; nearly 2 in 3 accept routine gifts of meals for themselves and their staff. The Times also concluded that doctors who take money from drug makers often practice medicine differently from those who do not—they’re more willing to prescribe drugs in risky and unapproved ways, such as prescribing powerful antipsychotic medicines for children.

Some companies have begun posting some payment information on their web sites, sometimes as the result of legal settlements with the federal government. Under the new proposal, if a company has even one product covered by Medicare or Medicaid, it must disclose all payments to doctors other than its own employees. The federal government will post the information on a public Web site.

The penalty for noncompliance could be $10,000 for failure to report. A company that knowingly fails to report payments could be subject to a $100,000 penalty for each violation, to a maximum of $1 million a year.

Comments about the proposal were accepted until Feb. 17, then Medicare officials were to issue final rules with the force of law.

Here’s where the archers among us start to take aim. As reported on FDA Law Blog, earlier this month the Centers for Medicare & Medicaid Services (CMS) announced “that manufacturers will not be required to collect data under the physician payment sunshine provisions of the Patient Protection and Affordable Care Act before Jan. 1, 2013.”

The regulation requires the first report to be submitted by March 31, 2013 for payments made in this calendar year, but CMS already has exceeded one deadline--under the Patient Protection and Affordable Care Act (ACA), payment-reporting procedures were supposed to be established by of Oct. 1, 2011.

The postponement gives CMS time to review more than 300 comments about the proposed rule, and also affords manufacturers additional time to prepare for the disclosure reports. Although the CMS didn’t expressly say the March deadline was extended, it’s implicit in the delay.

On news of the extension, Sen. Charles Grassley, R-Iowa, one of the sponsors of the Physician Payments Sunshine Act, said, “It’s disappointing that CMS won’t even collect data at all this year. The process has dragged on long past the statutory deadline for implementation. Consumers need to know more about the financial relationships between their doctors and drug companies sooner rather than later. It’s important that CMS get this right in every way, including the usefulness and accuracy of the information. Given all of the extra time, CMS will have no further excuses for not accomplishing these goals.”

We’d like to believe him. But when it comes to excuses in Washington, supply always
seems to exceed demand.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Patrick Malone & Associates P.C. | DC Injury Lawyers | Attorney Advertising

Written by:


Patrick Malone & Associates P.C. | DC Injury Lawyers on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.