Life Science Compliance Update

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September 13, 2013

Physician Payment Sunshine Act: ISMPP Recommendations and the Trap of Indirect Payments

Indirect payments represent Alice's rabbit hole for the Physician Payments Sunshine Act. If you start to think about things like "knowledge" or "co-participation" in a project, one could think that perhaps the whole value of a project may be assigned against a doctor. This could lead down a dangerous path into a wonderland of transfers of value.

One example of this: the International Society for Medical Publication Professionals (ISMPP) established the Sunshine Act Task Force to "follow the issues, understand the details and implications, and, most importantly, provide information and tools to our membership with respect to medical publications and the Sunshine Act, Section 6002, Transparency Reports and Reporting of Physician Ownership or Investment Interests of the Patient Protection and Affordable Care Act, referred to as the National Physician Payment Transparency Program: Open Payments."

The Task Force released the following recommendations: "ISMPP Suggested Approaches for Sunshine Act Interpretation and Implementation for Publication Support Requirements." The guidelines call for assigning transfers of value to a litany of activities associated with journal publications towards the authors. The items include:

  • Medical writing and editing under the direction of the author(s)
  • Statistical support performed specifically for the publication
  • Literature searches and provision of references
  • Graphic support
  • Securing permissions/permission fees
  • Journal submission
  • Submission and publication fees (includes fees associated with open-access
  • journals)
  • Direct costs for travel, meals, and other expenses associated with performance of work associated with publications (eg, congress attendance; publication steering committee meeting)

In the document, the Task Force suggests:

"According to the current Research Template (released on August 1, 2013), costs and TOV associated with research activities are reported as the total amount of the research payment for activities outlined in the research protocol or agreement."

However, the Task Force suggests that Applicable Manufacturers (AM) track all individual costs and Transfers of Value (TOV), including those associated with publication support, to ensure they are available should they be requested by CMS or requested by a Covered Recipient (CR) in the dispute resolution process.

If the Task Force is going to recommend reporting the full amount of a research payment and to whom it is directed, why would you attempt to subdivide an item that is not necessary as stated in the law? This will only add more confusion to an already confusing situation.

These recommendations create a large administrative burden on publishers and communications agencies. They would be tracking all of their time and materials against an author who received none of the funds.

Academic clinicians and researchers who are covered recipients under the Sunshine Act will be disincentivized to work with publishers and medical communications agencies if more than their actual fee is attributed to them as a transfer of value. The true transfer is not to the author, but to the journal, the readers, and perhaps the supporting company. This type of logic creates an "Alice in Wonderland" type rabbit hole where everything done on any project is considered a transfer of value to one aspect of the job.

If the recommendations are accepted, many academic authors may discontinue work with publishers and medical writing firms. Authors are not likely to agree that the research or analysis of others is somehow a transfer of value to the author themselves.

Other recommendations, including how to apportion and calculate transfers of value, represent a case study in the unexpected consequences of government regulations. They include:

"The Task Force suggests that, in many instances, only a portion of the costs associated with the development of a publication should be regarded as a TOV to authors; some AM mandated internal/operational activities may not be of value to authors. After considerable discussion among the Task Force and with the stakeholders who reviewed our draft suggestions, and in light of lack of specific guidance from CMS, we suggest that AMs individually determine the method for allocating specific TOV to each CR who was provided with publication support."


"Once the TOV (value of the support) is calculated, each AM will have to determine how to assign value to individual authors. The Task Force suggests 2 approaches for consideration. […] Regardless of the approach used to determine the value reported, the Task Force suggests preparing and submitting an assumptions document to CMS that provides transparency into the method used to calculate the attributed value of publication support provided to a CR."

"With respect to publications, the Task Force suggests that, generally, the date of initial submission to the journal or congress be used as the date of provision of the TOV. There may be situations, however, where this approach is not feasible (ie, the journal/abstract is not ultimately submitted) and, in such cases, the AM must determine if and when a CR has received a TOV."

"The Task Force suggests that consideration be given to informing CRs that data collection began on August 1, 2013, and that any TOV they receive after this date will be reported as required by the law. AMs may wish to do this as part of the author communication process."

The Task Force helps make the point on their own that the interpretation of this rule can be very confusing and requires significant legal help.

Much of the recommendations came from impressions that ISMPP taskforce members left with from a brief meeting with a few staff members at CMS.

Some of those "impressions" were that:

Publication assistance of any type provided to Covered Recipients (physicians and teaching hospitals) would seem to be a reportable transfer of value under the law

Whether the publication(s) support was part of the initial research agreement or provided subsequently, both are reportable transfers of value. They could not answer in which category subsequent publication support should be reported.

The specifics of how to apportion specific values among multiple authors, different Covered Recipients, across multiple countries, varying degrees of participation, or any other specific circumstances we work in was not the purview of the guidelines and would be left up to each Applicable Manufacturer to determine. The reasons for the allocation of dollar values should listed as assumptions and should be "reasonable

CMS was supportive of ISMPP developing common industry standards that could be used by all Applicable Manufacturers. No commitment was made by ISMPP.

We left the meeting with the impression that publication assistance of any type provided by Applicable Manufacturers (pharmaceutical, biotech, and medical device companies) to Covered Recipients (physicians and teaching hospitals) would be a reportable transfer of value under the law

We also gained the impression that the details of reporting—the amount reported and the methods to determine the reportable amount—would be left to individual companies to determine, and their rationale should be accompanied by documented assumptions

It is important not to overestimate information shared back and forth at a meeting with a government agency. ISMPP should have engaged professional help and arrived at CMS with an agenda to protect authors from the wrongful impression that somehow article assistance is a transfer of value to only a single author and not a value to the scientific community at large. The outcome of the taskforce would have been decidedly different.

Impressions do not have the force of law and probably should be avoided in promoting policy and public proclamations.

The Sunshine final rule addresses when a covered recipient participates in an advisory board or similar activity and does not charge the company or receive a transfer of value such as meals, or travel re-imbursement.

42 CFR §403.904(c)(10) Payments to third parties. (i) If the payment or other transfer of value was provided to a third party at the request of or designated on behalf of a covered recipient, the payment or transfer of value must be reported in the name of that covered recipient.

(ii) If the payment or other transfer of value was provided to a third party at the request of or designated on behalf of a covered recipient, the name of the entity that received the payment or other transfer of value (if made to an entity) or indicate "individual" (if made to an individual).If a covered recipient performed a service, but neither accepted the offered payment or other transfer of value nor requested that it be made to a third party, the applicable manufacturer is not required to report the offered payment or other transfer of value unless the applicable manufacturer nonetheless provided it to a third party and designated such payment or other transfer of value as having been provided on behalf of the covered recipient.


The release of this document has caused a huge backlash amongst researchers and clinical trialists. In the future they may take a pass on donating their time to work on articles if the value of all the publication support related to a full article is attributed to them as a transfer of value. These amounts can accumulate to thousands of dollars of attribution, which the actual researchers don't personally receive one dime of.

However, of note, ISMPP may be backtracking on their initial recommendations. Lorna Fay, Chair; Alice Choi, Chair-Elect; and Russell Traynor, Immediate Past Chair; issued a statement on September 11, 2013 about their Sunshine-related publications. The text is as follows:

"On August 14, ISMPP presented an ISMPP U on "The Sunshine Act and Medical Publications". There was a tremendous response to this ISMPP U, indicating considerable interest among our members in this important new development.

Initially, the intention was to rerun this ISMPP U for those members who were unable to participate in the August event. However, given that there are questions and issues within the industry regarding how best to interpret and implement the Sunshine Act, ISMPP will not be rebroadcasting the ISMPP U at this time. For members who were unable to participate in the original ISMPP U, the slides and audio from that event are available in the ISMPP U Archives.

Much of the current uncertainty is based on the fact that the requirements of the Sunshine Act have been in place for only a few weeks, and the complexities associated with legal interpretations of the Act and various company models of determining transfers of value will require time to finalize.

Consequently, over the next few weeks the ISMPP Board of Trustees and the Sunshine Act Task Force will be gathering more feedback from a wider group of companies to ensure we present to our members a thorough representation of how the Sunshine Act is being interpreted.

If you have any comments or feedback about what you and/or your organization has done or is in the process of implementing regarding the Sunshine Act, please email us at:"

We are hopeful that reason prevails. As a rule, if you are not included in a government regulation, it is never a good idea to advocate more restrictions for your own industry. Otherwise, you may meet unique and potentially unsavory characters as you enter the rabbit hole.

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This is absolutely marvelous!!!!! Maybe physicians should also determine allocations to a publication for the part that we developed on our computers at work and those at home. And, of course, there are costs involved in driving between the two! On the other hand, if we are thinking about the project while doing daily duties (as young lawyers are advised to consider time thinking on the commode!!!), these allocations need to be brought into the equation. So, as an example, we would let the publisher know that the funds received by them have different allocations for the differing costs of preparing the manuscript. Clearly, the work office space is more expensive than the home, etc.

Maybe this came become so ridiculous that the whole process will be scraped!

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