What impact has the Sunshine Act had?

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Last August the Open Payments system turned one, and the first batch of data was released by the US Centers for Medicare and Medicaid Services (CMS) shortly thereafter. What has the impact been, and were there any surprises?

The Physician Payment Sunshine Act was a key plank of Barack Obama’s healthcare reform program, mandating that for all payments to physicians and teaching hospitals, manufacturers supply the name and address of payees, the amount of money and the reason for payment.

The first tranche of data to be released by the CMS covered just the first five months’ of reporting from pharma and medical device companies - from August 2013 to the end of that year.

The data is certainly imperfect. Questions were raised about reliability and transparency from the beginning, with the names of about 40% of recipients being withheld by the CMS. Some of the concerns were illustrated by AMA President Robert Wah recently:

“…one Baltimore surgeon was surprised to learn that, according to the database, healthcare companies had lavished him $78,000 in food and beverages. It was actually for consulting work but was misclassified. Of the 550,000 physicians affected by the Sunshine Act only 26,000 had a chance to review their data and correct any inaccuracies”.

Reaction to the Sunshine Act

As the above app indicates, the numbers involved are huge, but the results are in line with analysts’ expectations.

It’s worth noting that while the Sunshine Act was finally implemented by CMS in February 2013, it was actually adopted in March 2010, meaning that the industry had plenty of time to adjust. Some of the data was also already in the public domain, under existing regulations.

Manufacturers have been sanguine about the legislation, arguing that enhancing transparency can only help industry’s reputation. According to Tim McGuire of Eli Lilly:

“Disclosure of individual financial relationships between industry and HCPs and HCOs will be a positive force, and will further highlight the need and importance of cooperation between industry, academia, clinicians, healthcare organizations and patients’ groups”.

Examples of cooperation between pharmaceutical companies and doctors include research, editorial services and medical writing, and it’s not always agreed what ought to be reported.

Some take the view that medical writing, for example, can’t constitute a transfer of value. As Shire’s Antonia Panayi explained: “We do recognize there may be kudos for the authorship, but how do you quantify this? We didn’t see it as tangible benefit”.

This highlights a worry for doctors about disgruntled patients bearing printouts from the CMS website. Physicians often see industry support for research and continuing medical education as a necessary and legitimate part of their work, and may be concerned that the website gives a misleading impression of wrongdoing.

In line with trends predating the legislation, the scale of physician payments will decrease. The numbers will nonetheless remain large, given the size of the market. So far, the public reaction has been muted, with the majority of Americans seemingly unaware of the act’s provisions; although this may change, as the story enters the radar of mainstream media outlets.

Wondering why we haven’t posted in a while?

Our blog has moved to a different location.
Visit http://blog.basecase.net to check out our latest blog posts.