Life Science Compliance Update

August 25, 2015

UK Health Secretary Announces Mandatory "Sunshine Rule" After Investigation Into Industry Relationships With NHS Employees


Yesterday, British Health Secretary Jeremy Hunt announced that all National Health Service hospitals and General Practitioner groups will be required to keep a list of every gift and payment from pharmaceutical companies to health service staff. Under the new “Sunshine Rule,” NHS personnel who receive such benefits from drug companies will have to declare them or face dismissal and potentially jail time.

The British Health Secretary’s decision was spurred by a recent Telegraph investigation which found evidence of senior NHS directors soliciting thousands of pounds for consulting work, and other officials speaking about company-sponsored advisory board meetings held in luxurious hotels. Read our article highlighting the undercover investigation here.

In response to the Telegraph article, Hunt released the following statements (DailyMail):

Disturbing evidence has come to my attention that small numbers of NHS staff have tried to influence NHS purchasing decisions in return for payment, gifts or hospitality from pharmaceutical firms and medical device manufacturers.

This is a complete abuse of their position and will be shocking to the vast majority of staff who want the best for patients.

Part of the problem is just how many sales reps are targeting our hospitals, with 65 reps on site at any one time according to a recent report. The NHS is indirectly paying for every one of those reps, through staff time and the amount paid for drugs and products.

As with so many issues in the NHS, the answer is greater transparency. These tough new rules will for the first time expose improper relationships between staff and pharmaceutical companies. Only those serving their own self-interest should have anything to fear, with patients and taxpayers set to benefit.

It is unclear at this time whether the penalties would be under the already existing UK Bribery Act or new legislation specifically aimed at disclosure requirements.

Hunt's announcement comes during the first year of reporting under the European Federation of Pharmaceutical Industries and Associations (EFPIA) Disclosure Code. While the EFPIA Disclosure Code is a self-regulatory, rather than legislative, measure, it requires requires all 40 EFPIA member companies and all members of the 33 EFPIA associations to disclose transfers of value to healthcare professionals (HCPs) and healthcare organisations (HCOs). 

The Association of the British Pharmaceutical Industry (ABPI) responded to Secretary Hunt's announcement, saying it welcomes the "Sunshine rule" as a positive addition to the industry’s current disclosure initiative. While the ABPI Code “already has strict requirements on the interaction between sales representatives and healthcare professionals”, the Association said it would “welcome the opportunity to work with the Department of Health and NHS England as plans for the ‘Sunshine Rule’ develop." 

The ABPI also touted its stringent self-regulatory measures:

We have led the way with the disclosure of payments to healthcare professionals in the UK since 2012 when we began publishing aggregate payments made by industry to doctors, nurses and other healthcare professionals. Our latest initiative will see the publication of payments and transfers of value made by industry to individual healthcare professionals and healthcare organisations during 2015 made public in June 2016 on a single, searchable database hosted by the ABPI.


It appears that whilst declarations of gifts and hospitality made under the proposed Sunshine Rule signal a common ambition for greater transparency in our relationships, it will cover just a small proportion of the important interaction between industry and HCPs in comparison to our own disclosure requirements. For that common ambition for greater transparency to really improve relationships between healthcare professionals and industry, we also need to align on the great value of those relationships to deliver advances in science and treatment for patients, including research.  We have always maintained these interactions are a critical part of advancing improved healthcare outcomes for patients within appropriate and transparent governance frameworks.

For more information on ABPI's disclosure measures click here. We will continue to follow any "Sunshine Act" type legislative developments in the UK. View their recent press release entitled "ABPI welcomes Jeremy Hunt’s ‘Sunshine Rule’ as a positive addition to industry’s disclosure initiative." 

See the Telegraph article on the Hunt's latest announcement here

August 19, 2015

CMS Provides an "Update on Open Payments Reporting" at CBI Transparency and Aggregate Spend Conference

Doug Brown

Hundreds of people flocked to Washington, DC this week for a three-day conference on Open Payments reporting and associated state and international transparency initiatives. CBI’s Ninth Annual Transparency and Aggregate Spend Conference featured keynote speaker Doug Brown, the Group Director of the Data Sharing & Partnership Group in the Center for Program Integrity at the Centers for Medicare and Medicaid Services (CMS). Brown has been a familiar face to those working in the aggregate spend space, and this year provided a recap of some improvements his agency has made to the Open Payments system, a summary of the physician payment data CMS recently published, and a forecast about what’s coming next for manufacturers.   

Updates and Improvements

Brown first walked through improvements that CMS has made to the Open Payments reporting process. “The biggest highlight,” he noted, was that 98 percent of reported records were accepted. This is a dramatic improvement over the 2013 reporting period, where a large percentage of payments were rejected and “de-identified” in the initial public database. The improved acceptance rate was due to a number of improvements CMS put into place, including making updates to its matching logic to combine the NPPES and PECOS database, and creating a validated physician list for companies to reference when submitting physician information. Brown noted that validation issues may still remain regarding students and specialists, but that the improvements “went a long way to making the process simpler” for both industry and CMS.

CMS is making additional enhancements to the system based on industry questions and interactions with the Open Payments Help Desk. CMS will also make improvements to the system as CMS deems appropriate based on their review of rejected physician data. Brown noted, however, that CMS’s data matching job is not always easy: “I not only need to make sure that the individual’s first and last name match up with the NPI [National Provider Identifier] and state license number, I also have to validate that the individual you are referring to is also a covered recipient physician,” stated Brown. CMS does not accept records for nurse practitioners, physician assistants, or physical therapists, for example. Brown also expounded upon the future validated physician lists, noting that the next iteration of the list will be added to and released in early 2016. Brown expects to conduct a number of calls between now and then as well. 

Review and Dispute

Brown next went into the "Review and Dispute" experience from 2014. His analysis found that covered recipients with higher payments or reports of ownership are more likely to register with Open Payments in the first place, which is a necessary step to get in and review and dispute reported data. In fact, the median value of payments associated with registered physicians is about 4.5 times greater than the median value associated with non-registered physicians.

A common industry concern with the dispute process was the potential for physicians or teaching hospitals to dispute every payment—be it on the belief that payments were incorrect or perhaps simply on principle to show their displeasure with Open Payments. Brown alleviated some of these concerns by noting that only a handful of physicians actually disputed 100 percent of their payments. He looked at physicians with at least five transactions and found that only 28 covered recipients disputed all of their transactions. 

CMS received just over 30,000 disputes total, covering 25,000 unique payments. As a reference, manufacturers reported approximately 11.4 million financial transactions attributed to over 600,000 physicians and more than 1,100 teaching hospitals in 2014. Around 2.7 percent of payments made to registered physicians were disputed, while 3 percent of the payments associated with registered physicians were affirmed. Brown also found that disputes were split somewhat evenly by covered recipient: teaching hospitals disputed 38 percent; physicians disputed 35 percent; principal investigators were somewhat lower at 27 percent. Disputes between research payments and general payments were pretty evenly split, noted Brown. 

Future Enhancements

Brown walked through a number of expected enhancements to Open Payments, first stating that CMS is working to facilitate the relationship between the reporting entity and the covered recipient. This concern stemmed from manufacturers articulating that many of the disputes they saw were initiated not because physicians had a problem with reported payments, but because the physicians simply had questions for the manufacturer. Thus, CMS wants to work on a process to facilitate a less adversarial discussion.

On the data reporting side, Brown also expects that limitations on entering special characters in text fields will be removed. Open Payments issues related to how the system accepts or rejects special characters have been a common problem; Brown notes that special characters should be allowed in every field possible

Brown also stated that manufacturers will be able to download their payment transaction information, regardless of how big the file size is. Currently companies have to get the Help Desk involved if their file is too big. Brown noted that manufacturers will also be able to download dispute information and virtually any interface on the system. Brown wants the download-capability to extend to physicians and teaching hospitals as well.

Finally, Brown addressed manufacturers’ concerns about physicians levying multiple disputes on the same payment—for example, covered recipients may dispute the date of payment, amount of payment, etc. Brown hopes that improving the discussion between manufacturers and physicians, as noted above, will drive down multiple disputes.

Data Publication and Media Coverage

Brown next walked through a high level overview of Open Payments data, which included 11.4 million financial transactions attributed to over 600,000 physicians and more than 1,100 teaching hospitals, totaling $6.49 billion. He also outlined that many media outlets have been covering this data, and articulated CMS’s desire that Open Payments is understood in the appropriate context. Brown invited stakeholder comments on how CMS is presenting the data, and how to best portray the information to the public.

CMS’s Open Payments website has had a total of 6.5 million hits, including clicks to information on reporting, downloading the data, and the covered recipient search tool. Brown stated that the agency is working on another set of analytical tools to help users visualize the data and expected to have these new capabilities available by the end of the year. However, he also noted that the full data set itself has been downloaded 50,000 times, indicating great interest in analysis.

What’s next?

Brown went over a number of the new reporting rules going forward for manufacturers. First, he indicated that 17 percent of submissions failed to report the marketed name of the drug associated with the payment in addition to the National Drug Code (NDC). Going forward, CMS is updating its reporting system to reject records that don’t have data in this category. Brown wanted to make sure companies got a head start on setting up the proper system to capture this marketed name data. He also reiterated the recent change requiring that device manufacturers must report the marketed name of their device as well.

Brown also provided a concise summary of the reportability of continuing medical education payments after CMS removed the explicit safe harbor for certain accredited events. Starting in 2016, all payments follow the same reporting “pathway”: Anytime manufacturers make a direct or indirect payment to a covered recipient, this is a reportable event, including continuing medical education payments. Brown stated, however, that most of the CME industry has regulations and firewalls in place that prevent industry from making direct or indirect payments to physicians due to these protections in place. “Only direct or indirect payments are reportable to CMS,” stated Brown.”Payments you are making to support CME that don’t meet the definition of indirect payments are not reportable events.” 

Notes Gleaned From the Questions and Answer Session

*CMS plans to open the Open Payments system for submission in early February, around the same time period as the last reporting year.

*CMS will release its updated Teaching Hospital list in October.

*40,000 physicians and teaching hospitals registered to go through the review and dispute process. However, Brown noted that this relatively small percentage represented 30% of the total payment value that was reported in 2014.

*CMS is working to better present the information reported against principal investigators to distinguish payments that didn’t go directly to a physician.

*Brown is debating adding a moderator to the telephone Q&A sessions, though noted the conversational style helps facilitate continuity and follow-up questions.

*CMS has stated that their teaching hospital list is a “complete list” of teaching hospital covered recipients. However, Brown noted they are working to articulate how manufacturers should report indirect payments made to teaching hospitals, such as where manufacturers make payments to a foundation or an office that doesn’t share the exact name or Taxpayer Identification Number (TIN) as the hospital on CMS’s list. CMS is planning to hold a Q&A in the future to “start the conversation” from their perspective of how they would like manufacturers to go about reporting these indirect payments. 

*CMS does not have current plans to add additional filters to the Open Payments data review page.



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