Physicians Payment Sunshine Act

By Rheingold Giuffra Ruffo & Plotkin LLP

As a drug product liability litigation plaintiff firm familiar with big pharma’s underhanded hiring of “ghost writers” to peddle their dangerous drugs, we welcome the Physician Payment Sunshine Act. This act will require healthcare providers to report their sources of funding. Beginning in September 2014, data on any financial compensation that physicians receive from drug industries will be publicly available on a federal database. There are many insidious ways pharmaceutical money can be used to promote their drugs, but this new law will add transparency to the process.

The law does not create new penalties for interactions that physicians may have with drug companies. The Stark law applies in that regard. However, it does require full disclosure and authorizes penalties for those failing to comply. It also requires that any compensation or goods worth $10 or $100 aggregate in a year to be reported, ending the process of throwing many lower priced freebies at doctors and their office staff. Applicable manufactures will face monetary penalties, capped annually at $150,000 for failure to report and $1,000,000 for known failure to report.

As part of the Patient Protection and Affordable Care Act, this law presents as a step towards the need for transparency in the healthcare system. Our vast experience in pharmaceutical litigation has included the review on millions of internal corporate documents. There is always a web of marketing which includes “key opinion leaders.” These are hired gun doctors who promote products but appear to be neutral.

These key opinion leaders, known as KOLs, promote products at medical meetings by way of presentations. As we know, it is no new news that industry compensation to healthcare providers affects the quality of healthcare in many ways. For instance, it affects a physician’s choice of drugs or treatment if he/she is receiving benefits from the drug industries. The Physician Payment Sunshine Act ensures to eliminate the bias and medical conflict of interest associated with such compensation and will discourage such behavior. Making physician financial data available online and searchable will help educating public about the interactions hospitals and pharmaceutical companies tend to have and how their physician provides care.

As promising as this law attempts to be, it has some flaws which is important to expose. Critics of the Physician Payment Sunshine Act mention that the problem with this act is that it only applies to physicians. This makes the transparency problematic as drug companies could turn to other avenues such as nurses and other medical professionals to report payments. Even then, this law presents as an excellent step towards requiring physicians to reconsider their partnerships with drug companies and how such a financial relationship of accepting monetary value from companies will affect not just their practice but the their patients as well.

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