In February, the Centers for Medicare & Medicaid Services announced the final regulations of the Physician Payment Sunshine Act, which is part of the Patient Protection and Affordable Care Act. After announcing the proposed regulations in December 2011, CMS received approximately 400 comments on the drafted regulations.

In the release, CMS announced that pharmaceutical and device companies will be required to begin recording data regarding their relationships with physicians on August 1, 2013 and will submit their first federal reports by March 31, 2014. CMS will then publish the data on a public website by September 30, 2014. What’s included? “The Sunshine Act requires that pharmaceutical/device companies report to the federal government anything of value that they provide to doctors in excess of $10. In doing so, they must indicate what products that exchange is related to,” says David Grande, MD, MPA, assistant professor of medicine at the University of Pennsylvania, and senior fellow at the Leonard Davis Institute of Health Economics, Philadelphia.

The goal is transparency. “You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need,” says Peter Budetti, MD, CMS deputy administrator for Program Integrity. “Disclosure of these relationships allows patients to have more informed discussions with their doctors.”

This is just the latest move to clean up the relationship between pharmaceutical companies and physicians. In 2009, the Pharmaceutical Research and Manufacturers of America banned all “non-educational” gifts from pharmaceutical companies to doctors. Gifts that were no longer allowed included pens, notepads, calendars and other items. Drug samples were still allowed. This occurred after the Sunshine Act was proposed.

According to Dr. Grande, during the past decade a lot of attention has been paid to the overall role that marketing plays in terms of influencing doctors’ prescribing. There is increasing evidence that marketing does have a meaningful impact on the prescribing decisions that doctors make. 

“Certainly, there are the high-profile examples of new drugs that doctors started adopting very quickly that were later found to have safety risks, such as Vioxx,” Dr. Grande says. “The general thought behind this is that marketing leads to overutilization of certain high-cost medications and that by reining in marketing, it will hopefully reduce that to some extent. A bigger issue is that these relationships in general were starting to cast doctors in a bad light with the public and with patients, and it was leading to lots of questions about what was motivating doctors’ decisions. From the perspective of a physician, whether it moves the needle on costs or not is an unanswered question. Whether it starts to hopefully clean up some questionable relationships that I think the public found troubling is potentially more important.”

There is good research and science to show that even small gifts have influence in many ways. “For example,” Dr. Grande says, “we all receive return address labels in the mail from various nonprofit organizations trying to get us to make donations to them because we feel guilty about receiving free mailing labels and we want to give something back. We don’t necessarily acknowledge that, but it is a psychological phenomenon that works on people. There is evidence that human psychology is at play even when you are talking about small stuff.”

Allison W. Shuren, an attorney and partner at the Washington, DC, firm of Arnold and Porter, which specializes in health care, agrees. “Patients may not understand that a treatment decision may be made based on a financial relationship,” she says. “Of course, choosing a device based on a patient’s needs and choosing a device based on a financial relationship are not mutually exclusive. Doctors typically choose to associate with companies whose products they think are good.”

Because this information will be public and can be misinterpreted by patients, physicians may need to reconsider the number and types of relationships they have with industry, because patient trust can be tied to these relationships.

In 2012, Dr. Grande authored a study that found that patients perceive physician-industry gift relationships as common.¹ Additionally, the study found that patients who believe that gift relationships exist report lower levels of physician trust and higher rates of distrust of the health-care system. The study included adult patients in 40 large metropolitan areas and was a cross-sectional, random telephone survey. Of these survey respondents, 55 percent believed their physician was receiving gifts, and 34 percent believed that almost all doctors receive gifts. Interestingly, younger patients and those with higher socioeconomic status were more likely to believe their physician received gifts. In multivariate analyses, those who believed that their personal physician received gifts were more likely to report low physician trust and high health-care system distrust. Additionally, those who believed almost all doctors accept gifts were more likely to report low physician trust and high health-care system distrust.

Similarly, a study conducted at Penn State found that accepting gifts from the pharmaceutical industry has implications for the doctor-patient relationship.² This study found that accepting gifts can undermine trust and affect patients’ intent to adhere to medical recommendations. In this study, a cross-sectional, self-administered 61-item survey was administered in five outpatient clinic waiting rooms at a U.S. medical center in 2008. Two-hundred twenty consecutive English-speaking adults were invited to participate, and 192 did so. While most were unaware of particular interactions between physicians and the pharmaceutical industry, approximately half would want to know if their physician accepted gifts valued at more than $100. A majority indicated they would have less trust in their physicians if they learned that he was accepting gifts valued at more than $100 or went on industry-sponsored trips or sporting events. It is important to note that 25 percent said they would be less likely to take a prescribed medication if their physician had recently accepted a gift in return for listening to a pharmaceutical representative’s presentation about that drug.

Restricting industry gifts has also been found to influence physicians’ behavior. A recent study conducted at Yale found that exposure to a gift restriction policy during medical school was associated with reduced prescribing of two out of three newly introduced psychotropic medications.³ This study included 14 U.S. medical schools with an active gift restriction policy in place by 2004. The study examined the prescribing patterns in 2008 and 2009 of physicians attending one of the schools, compared with physicians graduating from the same schools before the implementation of the policy, and a set of matched controls. For two of the three medications examined, attending a medical school with a gift restriction policy was associated with reduced prescribing of the newly marketed drug. Among the students who had a longer exposure to the policy or who were exposed to more stringent policies, prescribing rates were further reduced.

Companies will start reporting on August 1, 2013. There will then be a review period, during which doctors will get to see what has been reported about them. If there is a discrepancy, then the doctor will have an opportunity to reconcile with the drug company or device manufacturer. Then, the first publicly available information will be on the website in September 2014.

“The onus really falls on the pharmaceutical companies. They are the ones who have to do all the recording,” Dr. Grande says.

However, Ms. Shuren notes that doctors should be keeping their own records in terms of what arrangements they have with manufacturers to make sure that the reported data are accurate. “It’s not a requirement,” she says, “but it’s something that I will suggest to my clients. Each year, you should go into the database during the 45-day review period and look at what any manufacturer has reported to make sure that you agree with it.”

What is reportable? According to Ms. Shuren, the terms are “payment or transfer of value” or an “ownership interest,” so there are two categories of financial relationships that need to be reported. “Then, there are very specific categories within those such as travel, consulting, etc., under ‘payment or transfer of value,’ ” she says.

There have already been instances of confusion on the part of doctors and misinterpretation on the part of patients. For example, Ms. Shuren notes that there has been concern from doctors in group practices where one of the doctors in the group does a lot of consulting. “They wanted to make sure that all the other doctors in the group weren’t considered part of that relationship because some physicians just don’t want to be associated with that,” she says. 

Shareef Mahdavi, president of SM2 Strategic, a health-care consulting firm, says that the Sunshine Act will have a profound impact on the relationship between manufacturers and doctors. “In a third-party payer system, you’ve got to have transparency, so this is a good thing,” he says. “It is going to come as a shock or a surprise to a lot of physicians. But, I’ve already seen articles in local newspapers that demonize the doctor. A doctor may have been paid a few hundred dollars, and now all of a sudden he is considered a big-time consultant for a manufacturer, which creates a risk of misinterpretation by patients. Doctors need to understand that this could have a profound impact on how patients view them.”

Additionally, he notes that companies that do not market any products that are reimbursed by the government are not included in the Sunshine Act. “In elective medicine, with a first-party payer, the manufacturer does not take any money from the government, and the Sunshine Act doesn’t apply,” says Mr. Mahdavi. “In other words, if a company only makes non-reimbursed items, this doesn’t apply. But if a company makes both non-reimbursed and reimbursed products, then all relationships are reported.”

While the regulations just released have been called the final regulations, Ms. Shuren notes that revisions are still a possibility. “Of course, [CMS] could determine a year from now that it’s horrendous and doesn’t work, and they could then go through the process again and then finalize again,” she says.

She notes that some of these relationships between physicians and pharmaceutical companies/device manufacturers are really important and do produce better technology and better care, while some of the relationships are not so pure.

“There are going to be lots of educational opportunities out there for doctors to learn how to navigate this,” says Ms. Shuren. “When CMS sets up the website, there will be information posted there, as well. Just like anything new, doctors should make sure they are educated about it and that they understand what information is going to be recorded. This should not be particularly onerous on physicians in terms of administrative cost or need.”