Pharmaspective

CMS Sends Final Regulations That Would Implement the Sunshine Act to the Office of Management and Budget

By Danielle Burke

On November 27, 2012, the Office of Management and Budget (OMB) received final regulations from the Centers for Medicare and Medicaid Services (CMS), which would implement the “Transparency Reports and Reporting of Physician Ownership or Investment Interests” section of the Patient Protection and Affordable Care Act. CMS previously missed the October 1, 2011, deadline to establish regulations implementing this section, which is commonly referred to as the “Sunshine Act.” The text of the final regulations is not currently available for viewing.  

 

CMS released proposed regulations to implement the Sunshine Act in December 2011.  The Sunshine Act requires drug, device, biological product, and medical supply manufacturers to report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals. An additional provision requires manufacturers and group purchasing organizations (GPOs) to report all ownership or investment interests held by physicians or members of their family. Although the Sunshine Act statute requires manufacturers and GPOs to begin collecting data starting January 1, 2012, CMS has previously indicated that it will not require data collection by applicable manufacturers and applicable GPOs before January 1, 2013.

Update: Massachusetts Bureau of Health Care Safety and Quality Requests Approval of Final Regulations to Implement Changes to the Pharmaceutical and Medical Device Manufacturer Conduct Law

On September 19, 2012, the Massachusetts Department of Public Health (Department) posted emergency regulations to immediately implement recent changes to Massachusetts’ Pharmaceutical and Medical Device Manufacturer Conduct Law [Mass. Gen. Laws Ch. 111N] (Law). The Law requires the Department to “adopt a standard marketing code of conduct for all pharmaceutical or medical device manufacturing companies that employ a person to sell or market prescription drugs or medical devices in the commonwealth.” Recent changes to the law permits pharmaceutical and medical device manufacturers to provide “modest meals and refreshments in connection with non-CME educational presentations for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.” The presentation must occur “in a venue and manner conducive to informational communication.” Additionally, pharmaceutical and medical device manufacturing companies who provide these meals must file quarterly reports detailing all non-CME educational presentations in which they provide such meals or refreshments. The emergency regulations are set to expire on December 19, 2012.

 

On November 21, 2012, the Massachusetts Bureau of Health Care Safety and Quality submitted a request to the Public Health Council to approve final regulations to implement recent changes to the Law. The final regulations permit pharmaceutical or medical device manufacturing companies to provide or pay for modest meals in the health care practitioner’s office or hospital setting in connection with informational or educational meetings or presentations. Companies may also provide or pay for modest meals outside of the health care practitioner’s office or hospital setting, provided that the meal is “for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.” Please note that the regulations state that “appropriate uses” may not include the promotion of off-label uses of prescription drugs or medical devices.

 

The final regulations define “modest meals and refreshments” as “food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a health care practitioner that, as judged by local standards, are similar to what a health care practitioner might purchase when dining at his or her own expense.”

 

In addition, echoing the amended law, the final regulations also require that the quarterly reports include:

 

• The location of the non-CME presentation;
• A description of any pharmaceutical products, medical devices, or other products discussed;
• The total amount spent on the presentation;
• The estimated cost per participant, including meals, refreshments, and other items of economic value provided; and
• Any other information as determined necessary by the Commissioner.

 

Further, the final regulations clarify that companies will need to register annually and submit a $2,000 annual registration fee .

 

Although the final regulations require companies to continue submitting annual disclosure reports to the Department, companies are not required to disclose information that has been disclosed to a federal agency pursuant to federal law. 

The American Medical Association Disapproves of CMS Tasking Implementation of the Sunshine Act to the Center for Program Integrity

By Ingrid A. Pelzer

In December 2011, the Centers for Medicare and Medicaid Services (CMS) issued a notice of proposed rulemaking announcing the publication of draft regulations that would implement the “Transparency Reports and Reporting of Physician Ownership or Investment Interests” section of the Patient Protection and Affordable Care Act, commonly referred to as the Sunshine Act. Under the Sunshine Act, drug, device, biological product, and medical supply manufacturers are required to report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals. An additional provision requires manufacturers and group purchasing organizations (GPOs) to report all ownership or investment interests held by physicians or members of their family. Since releasing the draft regulations, CMS has accepted comments from interested parties and has engaged stakeholders regarding the implementation of the regulations. CMS has not yet released the final regulations.  

 

Recently, the American Medical Association (AMA) published an editorial voicing its disapproval of CMS’ intention to have the Center for Program Integrity, CMS’ anti-fraud unit, implement the Sunshine Act. According to the editorial, putting the Center for Program Integrity (CPI) in charge of the collection and distribution of public reports on physician-industry interactions “creates the impression that any physician who appears on the list, no matter how limited financially or legitimate the nature of the interaction, is somehow engaged in behavior that could be seen as ethically or legally suspect.” As a result, CPI’s implementation of the Sunshine Act “could have a chilling effect on beneficial interactions between doctors and researchers that help advance medicine.” The AMA proposes that CMS leave “data collection, reporting and appeals to another part of the agency and reserve CPI only for matters involving compliance with the law.”

 

The AMA previously voiced its objection to CPI’s implementation of the Sunshine Act in an October 2012 letter to CMS. In this letter, AMA’s Executive Vice President and CEO, James L. Madara, MD, noted that the purpose of the Sunshine Act “is not to supplant the role of the profession in regulating ethical conduct or to create new fraud and abuse laws.” Dr. Madara further noted that having CPI implement the Sunshine Act “could lead to a public perception that most, if not all, transparency reports are prima facie evidence of unethical or illegal behavior.” In sum, Dr. Madara urged CMS to “reconsider tasking [CPI] with implementation of the final Sunshine Act regulation because it will cause significant confusion about the purpose of the transparency reports and create a strong perception that anything contained in a transparency report presumptively raises ethical, fraud, abuse, and program integrity concerns.”

 

What are your thoughts on CMS' plan to task the CPI with enforcing the Sunshine Act?