Pending Sunshine Act to Focus on Allegedly Fraudulent Financial Ties Between Physicians and Industry

sunshine_act_physiciansOn August 1, the Physician Payment Sunshine Act provision of the Affordable Care Act will go into effect. The Act is meant to highlight allegedly bogus relationships between physicians and pharmaceutical firms and medical device manufacturers.

As we’ve long stressed, financial relationships between device and drug makers and the health care industry have provoked enormous controversy. Critics argue that these relationships create conflicts of interest that could unduly impact research findings and prescribing practices, creating a situation in which patients are no longer the primary focus in health care decisions. Meanwhile, device and drug makers continue to market their products using promotional strategies that encourage so-called “consultative” relationships with physicians. In these relationships, doctors are brought back and paid to use industry’s products and promote them to their colleagues.

Under the Sunshine Act, all manufacturers of pharmaceuticals, medical devices, and biologicals must report to the National Physician Payment Transparency Program at the Centers for Medicare & Medicaid Services (CMS). The firms must report how much money they pay doctors and hospitals, as well as other information concerning ownership or investment interests in these companies that are held by physicians or their immediate family members.

Senate Finance Committee Chairman Max Baucus (Democrat-Montana) prominently linked the Sunshine Act with a 16-month U.S. Senate investigation that revealed prior, undisclosed ties between device maker, Medtronic Inc., and some doctors who were paid about $210 million to help promote and launch its InFuse bone graft product. That investigation also revealed that Medtronic employees collaborated with physician authors to edit, and sometimes write, clinical studies touting InFuse for publication in medical journals. “These findings emphasize the value of the … Physician Payments Sunshine Act, which will result in public disclosure of industry payments to physicians starting next year,” said Senator Baucus, according to a prior U.S. Senate Finance Committee release.

The Finance Committee also discovered problems with most of the initial Medtronic-supported InFuse research, according to a previous Bloomberg News report. Physicians and researchers wrote at least 11 medical journal reports about InFuse for their multimillion-dollar payment, which was received via royalties and consulting fees. Senate investigators also charged that Medtronic intentionally manipulated studies to mitigate information on adverse InFuse reactions while also promoting off-label use of InFuse.

“Ultimately, the public deserves accurate information regarding the benefits and risks associated with any medication or medical device they are considering putting inside their bodies,” said Gary Falkowitz, Managing Attorney from Parker Waichman LLP. “Examples like the Senate’s investigation into the Infuse product show the potential value of the Sunshine Act.”

These relationships are meant to move innovation and education forward but, are, in fact, part of broader promotional strategies meant to drive sales, according to a prior report by The Wall Street Journal. While physicians may believe their clinical judgments are not being influenced by these partnerships, data reveal a trend in which not only health care costs rise, but in which patients are being endangered. A prior The New York Times review revealed that about 25 percent of all physicians have accepted cash from drug and device makers; some 2/3rds accepted meals in exchange for advice and speaking engagements. The Times report also revealed that physicians who receive money from industry also appear to practice medicine in different ways than physicians who do not accept industry gifts, and physicians working with industry tend to prescribe drugs and use devices and other medical products in riskier and unapproved ways.

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