The healthcare reform act contains stringent rules mandating the public disclosure of gifts and payments made to doctors by medical device, pharmaceutical and biotech companies.
The so-called "Physician Payments Sunshine Provision" of the Health Care and Education Reconciliation Act of 2010 requires the companies to begin reporting gifts or payments worth more than $10 no later than March 31, 2013. The result, a searchable database containing the names and addresses of each recipient and the details of the payments, will be made publicly available by Sept. 30 of that year, and on June 30 every year following.
The act also mandates stiff penalties for companies that fail to comply. Companies found to inadvertently omit reports could ring up civil fines of between $1,000 and $10,000 "for each payment or other transfer of value or ownership or investment interest not reported," according to the act. Companies found to knowingly skirt the reporting rules could be slapped with civil fines of $10,000 to $100,000. The total amount of fines can’t exceed $1 million or 0.1 percent of total annual revenues in a single year.
The payments that will require reporting include "any compensation, gift, honorarium, speaking fee, consulting fee, travel, services, dividend, profit distribution, stock or stock option grant, or any ownership or investment interest held by a physician in a manufacturer" excluding dividends or other profit distributions, according to the act. Some payments are excluded, including:
- Loans of medical device models for no more than 90 days “to permit evaluation of the covered device by the covered recipient;”
- Replacement devices issued according to the terms of warranties;
- Gifts to doctors who are receiving treatment as patients and “not acting in the professional capacity of a covered recipient;”
- “In-kind items used for the provision of charity care;”
- A dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund (as described in section 1877(c)).
- Gifts made to doctors who work solely for the company in question;
- Discounts or cash rebates.*
According to Allan Coukell, director of the Pew Prescription Project, the act also requires companies to report all contributions, no matter how small, to doctors who receive more than $100 in a given year. Coukell believes the new provisions could lead companies to conclude that "it’s no longer worth it to give out a lot of small gifts and payments because they’ll have to track all those things," according to the Wall Street Journal.
"I think some physicians, knowing that the relationships with industry will be open to scrutiny, may re-evaluate certain kinds of relationships," Coukell said "Research will continue but with more promotional and market-oriented [relationships], there may be some individuals who will decide to cut back on that kind of work. We will be able to have a much more informed public discussion about these types of relationships."
*Correction, March 30, 2010: This article incorrectly stated that the Physician Payments Sunshine Provision contained a $5 payment threshold. Return to the corrected sentence.
