Life Science Compliance Update

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May 23, 2014

DC Transparency Law: Companies Won’t Have to Report Payments Made to DC Physicians & Teaching Hospitals After August 2013

The District of Columbia's AccessRX Act of 2004 has required pharmaceutical companies to report their marketing activities in DC for almost a decade now. D.C. publishes spend data every year—a report we have followed closely. However, this year, in light of the Physician Payments Sunshine Act, the DC Department of Health will not require companies to report gifts made to physicians and teaching hospitals between August 1 and December 31, 2013. Reporting requirements for aggregate and advertising expenses remain unchanged. View the announcement here.

Payments made to physicians and teaching hospitals after July 31, 2013 must be reported to the US Department of Health and Human Services (HHS) and not D.C. According to the Sunshine Act, a physician is a doctor of medicine or osteopathy, a doctor of dental surgery or medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor. A teaching hospital is any hospital on CMS' list.

Since D.C. requires reporting on virtually anyone remotely involved in healthcare, companies will still be responsible for reporting gifts to a variety of other entities. Furthermore, in some regards their gift category is broader than the Federal Law. It should be noted that the District refers to all payments regardless of the services rendered "gifts."

D.C.'s gift law requires the following information:

With regard to all persons and entities licensed to provide health care in the District, including health care professionals and persons employed by them in the District, carriers licensed under Title 31, health plans and benefits managers, pharmacies, hospitals, nursing facilities, clinics, and other entities licensed to provide health care in the District, the following information (After August 1, DC will not require physicians and teaching hospitals):

(A) All expenses associated with educational or informational programs, materials, and seminars, and remuneration for promoting or participating in educational or informational sessions, regardless of whether the manufacturer or labeler provides the educational or informational sessions or materials;

(B) All expenses associated with food, entertainment, gifts valued at more than $ 25, and anything provided to a health care professional for less than market value;

(C) All expenses associated with trips and travel; and

(D) All expenses associated with product samples, except for samples that will be distributed free of charge to patients.

The following expenses are not subject to reporting requirements:

  1. Marketing expenses of twenty-five dollars ($25) or less per day and per health care provider or entity;
  2. Reasonable compensation and reimbursement for expenses in connection with a bona fide clinical trial of a new vaccine, therapy, or treatment;
  3. Scholarships and reimbursement of expenses for attending a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship is chosen by the association sponsoring the conference or seminar; and
  4. Expenses associated with advertising and promotional activities purchased for a regional or national market that includes advertising in the District if the portion of the costs pertaining to or directed at the District or cannot be reasonably allocated, distinguished, determined or otherwise separated out.

Companies must submit their reports by July 1, 2014, for those expenses incurred during the 2013 calendar year. Companies must also submit a $5,000 filing fee. In accordance with the District law, the published report does not disclose names of specific companies or gift recipients, but reports on aggregate expenditures. 

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