Life Science Compliance Update

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July 29, 2014

Medicines Australia Code of Conduct: Payment Reporting Starts October 1, 2015

Australia

Transparency is increasingly a global phenomenon. Australia is no exception. Medicines Australia, Australia's industry body, recently revamped the disclosure provisions of its Code of Conduct, and sent the reforms to the Australian Competition and Consumer Commission (ACCC) for approval. The new Code will require Medicines Australia's member companies to report on an individual basis a wide range of payments and transfers of value to healthcare professionals, as well as sponsorships of third party educational meetings and symposia. The Australian requirements are similar to the United States' Physician Payments Sunshine Act, but there are notable differences in the policies.

The new version of the Code—Edition 18—was unanimously adopted by Medicines Australia's members at a general meeting on June 17, 2014. The ACCC authorization process is expected to take around six months and, if authorized, the new Code will come into effect in January 2015, with the new transparency reporting starting October 1, 2015. The new Edition preserves the reporting requirements of Edition 17 of the Code until September 30, 2014, which require aggregate rather than individualized reporting at the healthcare professional level.

Under the new Code, the following activities would be reported by pharmaceutical companies for individual healthcare professionals, by name, with the amount of the payment or transfer of value:

  • Consulting fees and/or speaking fees at educational event.
  • Sponsorship of a healthcare professional to attend an educational event: airfares, accommodation and/or registration fees (whether held within or outside Australia).
  • Fees paid to healthcare professional consultants in Australia, or to their employers on their behalf, for specific services rendered by them: consulting fees, accommodation and airfares (whether within or outside Australia).
  • Fees paid to healthcare professionals in their role as Advisory Board members: sitting fees, accommodation and airfares (whether within or outside Australia).
  • Fees paid to healthcare professionals for the purpose of market research ONLY where the identity of the healthcare professional is known to the company.
  • Payment of an educational grant or sponsorship to a specific healthcare professional

The following would NOT be required to be reported:

  • Payments to consultants in relation to research and development work, including the conduct of clinical trials.
  • Hospitality (food and beverages): The cost of any meal (including drinks) provided by a company must be below the defined limit set in the Code ($120 for food and beverages)
  • Airport ground transfers, taxis, parking fees
  • Venue costs (e.g. room and/or audio-visual equipment hire)

Analysis

As you can see, while the Code requires broader reporting than the United States for speaking events, the Australian Code exempts clinical trials from reporting as well as providing for a much larger food limit ($120 compared to $10). After the recent revision to the Sunshine Act, the CME speaking events policy may not even give us the edge there.

We also noticed that Australia's definition of "Transfer of Value" includes both direct and indirect transfers, like the United States. However, the Australian Code defines indirect transfer of value as "one made by a third party on behalf of a company for the benefit of a recipient where the identity of the company is known to, or can be identified by, the recipient." (p. 94 of the revised code). This is an interesting standard, considering the onus is on the manufacturers to report the transfer of value. In the US, if a payment meets the definition of an indirect payment in § 403.902, then the payment can be excluded from the reporting requirements if the applicable manufacturer does not ''know'' the identity of the covered recipient.

Another interesting aspect of the Australian Code is the concept of informed consent from physicians. "Each company must establish a means to ensure informed consent and maintenance of records which comply with Australian Privacy legislation," the Code states. "Where recipients of transfers of value cannot be identified for legal reasons, the amount attributable to such transfers must be reported on an aggregate basis by each company. The number of recipients involved must be stated and the aggregate amount attributable to transfers of value to such recipients."

Medicines Australia will make publicly available on its website the completed reports provided by each Member Company within two months of the date on which the reports must be submitted to Medicines Australia. The first report is scheduled to be published on August 31, 2016. Like in the United States, companies must provide Australian healthcare professionals for whom they have collected information about payments the opportunity to review and submit corrections to the information during a 6-week period before the public disclosure.

Now that the US system is in its Dispute Resolution phase, perhaps the most striking difference between Codes is that in Australia, "[i]f a healthcare professional does not agree to the information being disclosed with their name, the expenditure will be reported in aggregate with the number of healthcare professionals it relates to." This is a completely different approach than the US Sunshine Act, which allows manufacturers to unilaterally dismiss complaints by healthcare professionals.

Resources:

The Code of Conduct, June 2014: http://medicinesaustralia.com.au/files/2010/01/20140701-Draft-Edition-18-Code-version-30-June-2014-final-no-mark-up.pdf

Medicines Australia's press release, July 2, 2014 http://medicinesaustralia.com.au/2014/07/02/ma-submits-new-transparency-reforms-to-accc/

Thanks to Health Market Science for the information leading to this article on Australia's new code.

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