aQ. What is the Physician Payment Sunshine Act?
A. The Physician Payment Sunshine Act which I authored with Senator Herb Kohl of Wisconsin requires pharmaceutical and medical device companies to disclose payments to physicians.
Q. Why is disclosure necessary and how will the information be disclosed?
A. It's not unusual or illegal for drug or medical device companies to pay for physicians' speaking engagements, travel to promote products or consulting services, and some companies have begun to disclose information about payments voluntarily. My campaign to require disclosure was based on, among other things, the fact that financial relationships between drug and device makers and physicians should be transparent and information about payments should be publicly available. Before my legislation to require reporting of payments nationwide, some states had laws requiring disclosure of payments by drug and medical device companies. The new law will require drug, device and medical supply companies to file annual reports with the U.S. Department of Health and Human Services delineating all payments over $10. The Secretary of Health and Human Services will be required to post the information online in a searchable manner beginning September 30, 2013, and then on March 31 each subsequent year. The physician name, office address and specialty will be posted along with the payment amount and form. Compared to the voluntary effort that's underway, the law will make reporting uniform, and it will indicate why the payment was made. Until the law takes effect, I've urged the Secretary of Health and Human Services to be very proactive administratively in preparing for the full disclosure environment that will exist, beginning in 2013.
Q. Is there any type of payment that physicians won't have to disclose?
A. Yes, physicians will not have to disclose loans of medical devices for less than 91 days. This applies to the trial use of a new medical device, for example, or any payments under $10 as long as the physician doesn't receive more than $100 in a year.
Q. What was behind this legislative reform effort?
I'm interested in transparency because letting the sun shine in and making information public is basic to accountability. With prescription drugs and medical devices, public dollars and public confidence are at stake. For the last several years, I've conducted extensive oversight and sought disclosure of industry financial ties with groups including taxpayer funded research physicians, medical schools, medical journals, continuing medical education companies, and patient advocacy non-profit organizations. I've identified numerous cases where there was vast disparity between drug-company payments received and reported by leading medical researchers. For example: At Emory University, the chairman of psychiatry failed to report hundreds of thousands of dollars in payments from a pharmaceutical company while researching that same company's drugs with a federal grant from the National Institutes of Health. He earned $2.8 million in drug industry fees from 2000 to 2007 and had at one point consulted for 21 drug and device companies simultaneously. The professor resigned his chairmanship after this became public information.
At Stanford University, the chairman of psychiatry received a National Institutes of Health grant to study a drug, while partially owning as much as $6 million in stock in a company that was seeking approval of that drug from the U.S. Food and Drug Administration. After exposure, the National Institutes of Health removed the individual from the grant. At Harvard University, three professors failed to report almost a million dollars each in outside income while heading up several National Institutes of Health grants. In response to my oversight, Harvard revised its conflict of interest policies and is conducting an internal investigation. At the University of Wisconsin, the chairman of orthopedic surgery reported taking more than $20,000 from a company every year for five years. My oversight helped to reveal that the actual amount was closer to $19 million. The University of Wisconsin is revising its conflict of interest rules. My oversight found that the National Alliance on Mental Illness received $29 million from the pharmaceutical industry over a four-year period. In response, the Alliance is posting all major foundation and corporate support on its website in quarterly financial statements.
Senator Kohl and I found that the Cardiovascular Research Foundation in New York City, which is affiliated with Columbia University, received nearly $87 million from medical device companies over a five-year period. Columbia University has since revamped its conflict of interest policies.
In direct response to my oversight and findings, the National Institutes of Health, which distributes $24 billion in federal research dollars every year, this year proposed new disclosure guidelines for federal grant recipients. A number of drug companies began disclosing financial relationships voluntarily. And, over 40 universities nationwide are revising their disclosure policies. Last year, the prestigious Institute of Medicine issued a report endorsing transparency and stating that protections against conflicts can be established without inhibiting productive relationships between the medicine and industry to improve medical knowledge and care.