What can make the sun shine? New Federal Rule, “Physician Payment Sunshine Act—Section 6002” requiring payments to doctors by medical device, pharmaceutical and biologics companies to be made public.

The Federal Government, with the help of the Centers for Medicare & Medicaid Services (“CMS”), has enacted a law intended to help protect and inform patients. The Physician Payment Sunshine Act is a part of the new federal Affordable Care Act. Pharmaceutical, medical device and biologics companies must now reveal certain compensation they pay to doctors

Beginning August 1, 2013, the Sunshine Act will require manufacturers who participate in federal health programs to gather data on compensation paid to physicians who use, promote and help develop new medical products. With certain exceptions, the Act only applies to companies who are under a written agreement to manufacture the covered drug, device, biological, or medical supply for another entity. The law is far reaching, and there are few exclusions to its reporting requirement.  For example, payments valued at $10 or less (i.e., the value of notepads and pens) are exempt.

In March of 2014, manufacturers must disclose the amount of payments and to whom.  The information will become public in September 2014.

This new requirement may be a potent tool in preventing the misuse of medical expertise in developing, researching and promoting new medical products.  Through financial rewards, some manufacturers have unduly influenced doctors to skew study results and/or clinical trial results by providing undeserved positive reviews of products or drugs, downplaying negative effects.

Glenn Phillips, a partner with Phillips Grossman, says the overdue law has long been in the works, and will be a welcome change from formerly private payments from manufacturers to doctors.  “How can you trust the ‘positive’ results of a study when it is the manufacturer hiring and paying the doctors to carry the study out?  This is great news for those of us who have been advocating for transparency.”

As a case on point, in October 2012, the U.S. Senate Committee on Finance found that Medtronic, manufacturer of the bone-growth Infuse product, was “heavily involved in drafting, editing, and shaping the content of medical journal articles authored by its physician consultants who received significant amounts of money through royalties and consulting fees from Medtronic… Medtronic paid a total of approximately $210 million to physician authors of Medtronic-sponsored studies from November 1996 through December 2010 for consulting, royalty, and other miscellaneous arrangements.”  (“Staff Report of Medtronic’s Influence on Infuse Clinical Studies” U.S. Senate Committee on Finance report dated October, 2012  http://www.finance.senate.gov/imo/media/doc/Medtronic_Report1.pdf)

According to the federal government, the Sunshine Act is not meant to prohibit legitimate collaboration between physicians and manufacturers; the Act is merely intended to bring transparency to the process, with the goal of shedding some light on the medical industry.

For further information, visit http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/index.html

Phillips Grossman, PLLC, is a joint venture of Sanders Viener Grossman, LLP, and Phillips Law Firm, PLLC, with offices in Washington, New York, New Jersey, and California, and representing people from all 50 states and Puerto Rico. Phillips Grossman provides national representation for those injured by pharmaceutical drugs and devices. If you or a loved one have been injured by a defective drug or device, please contact the attorneys at Phillips Grossman at 1-800-530-9800 or contact@phillipsgrossman.com for a free consultation.