Life Science Compliance Update

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August 13, 2013

Physician Payment Sunshine: Pan European Physician Payment Rules Begin January 1, 2015

Pharmaceutical manufacturers operating in Europe must disclose payments made to physicians starting in 2016 in an effort to boost transparency and make patients aware of possible conflicts of interest.

The new ethical code requires all members of the European Federation of Pharmaceutical Industries and Associations to disclose payments made in 2015 by 2016, the trade group said in a statement on July 2, 2013. Each company must reveal names of health-care professionals and associations that have received payments, the amounts, and the types of relationships on their websites or on a common website.

EFPIA said that: "we understand the need to provide a well-managed framework for collaboration for these relations to be as transparent as possible", adding that this "requires a well-regulated, ongoing scientific dialogue in both directions." It notes that partnerships between doctors and industry: "are subject to stringent legislation and require that all parties respect high ethical standards" and the new code, "will enhance transparency around these relationships."

Richard Bergstrom, EFPIA director-general, claimed that: "this is an important step for our industry, as we demonstrate our commitment to transparency and secure the trust of the patients our industry serves." He added that the code is: "EFPIA's delivery on the guiding principles set forth last autumn, in which we committed to working together with relevant stakeholders to establish a clear approach to transparency of financial transactions and other declarations of interest."

Analysts note this is similar to the American Sunshine Act provisions in the Affordable Care Act.

However, as we have previously written, the effects of these rules can be questionable. According to a study in the New England Journal of Medicine: "[c]onsumers are typically unaware of these data and, even when they know about them, tend to choose their providers on the basis of other factors." And: "patients may have difficulty evaluating the undesirable and beneficial aspects of various types of payments." In addition, the authors conclude: "it seems unlikely that the mere existence of a payment-information repository will lead many patients or physicians to alter their behavior."

Furthermore, restricting access and interactions with physicians may actually increase costs due to uniformed physicians who are not up-to-date on the latest food and drug safety-information, label changes, or black box warnings—as research has shown.

Another study, also written about on this website, suggests that the Physician Payments Sunshine Provision in the federal health care law may have a limited effect on prescribing and on expenditures, as there were negligible to small effects of the disclosure laws in Maine and West Virginia. They demonstrated that Congress and the Centers for Medicare and Medicaid Services (CMS) along with hundreds of companies, will be paying hundreds of millions of dollars each year to implement a law that may not actually have its intended effect.

Europe does not have the tort culture that we find so prevalent in America. The reporting of payments on manufacturers own websites is a smart idea, that in the end should save the industry hundreds of millions of dollars in implementation costs if country by country regulations were adopted.

While transparency is an important goal and should be implemented, the administrative burden and unintended consequences on research, education, and other scientific activities, call into question the prudence for national sunshine rules.

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