Life Science Compliance Update

July 28, 2015

Undercover Report on Industry Relationship With NHS Inspires Discussion For UK Sunshine Law

  Under cover


Last week, Telegraph UK published a number of articles based on undercover interviews that targeted the relationships between drug companies and employees of the National Health Service (NHS). The articles noted that that NHS formulary decision-makers may also work as paid company consultants who can recruit other influential NHS employees to advisory board meetings. One interview in particular revealed that these meetings may be held in exotic locations at fancy hotels.  

In the United Kingdom, NHS hospital trusts and Clinical Commissioning Groups (CCGs) produce a formulary of medicines deemed preferable for prescribing within a given locality—there are currently 209 CCGs operating in England. Earlier this year, undercover reporters posed as promoters for a drug company, and asked influential NHS health officials how best to get CCGs to switch drug their company’s products.

The article highlighted one board meeting in particular where a pharmaceutical company paid the head of medicines management at the Isle of Wight CCG £5,000 to help organize an event. The company brought 12 payers together in Germany to one of the “top ten hotels in the world.” Speaking to the undercover reporters, the NHS employee noted that each delegate was paid £500 a day to attend and that all of those who were invited “switched” to the drug company’s product after the trip. “We have to be careful not to choose a nice venue just because it’s a nice venue. But it does it does sway people,” he added.

In another case, the formulary development pharmacist at one NHS trust, who has since resigned, advertised that he had a network of more than 100 health service officials who make decisions about what drugs to buy. “I’m talking about the payers who will make a decision on which drug they have on the formulary,” he said in the undercover video. He said he would charge £15,000 to organize an advisory board meeting which would give the company a “competitive edge”. He “offered to set up a trip to Dubai for 10 health officials, many of whom are involved in choosing the drugs their CCG or Trust offers to patients,” states Telegraph. 

UK Sunshine Act?

Currently, member companies of the Association of the British Pharmaceutical Industry (ABPI) are required to report transfers of value made to health care professionals to remain compliant with the EFPIA Disclosure Code. However, the Telegraph article notes that NHS England and Jeremy Hunt, the Health Secretary, have noted that the investigation “raised the question of whether the Government should legislate for full disclosure of payments made to health professionals.”

The UK news outlet Independent quoted the Department of Health as stating that “[i]f these allegations are true, this is completely outrageous and amounts to an abuse of the trust that patients place in NHS staff.”

An NHS England spokesman said: “These are extremely serious allegations so we have immediately directed NHS Protect to launch a full investigation of each and every case identified by this press report.”

“These allegations also raise the question of whether this country should now legislate for a so-called Sunshine Act, requiring full disclosure of any payments made by a pharmaceutical or device company to a health professional or NHS employee.”

---

The scrutiny in these cases focused on employees of NHS, but pharmaceutical companies too must be weary of increased scrutiny into their interactions with payers abroad and potential bribery charges. While patients ultimately benefit when pharmaceutical companies can rely on the expertise of a diverse spectrum of consultants, care must be taken to keep these engagements transparent and avoid the extravagance alluded to here.  

 

July 20, 2015

Open Payments: CMS Clarifies Continuing Medical Education FAQs, Confirms CME Funding Must Meet the Definition of "Indirect Payment" To Be Reportable

  CMS

On Friday, the Centers for Medicare and Medicaid Services (CMS) announced they had updated the Law and Policy page on the Open Payments website with information about the revised reporting requirements for continuing medical education. CMS also announced three FAQs for CME reporting. This information isn't necessarily "new" as CMS revised this page several months ago to correct what many felt was a misinterpretation of the Sunshine Act Final Rule regarding CME payments. This was, however, the agency's first announcement about the revision.

Under the Physician Payments Sunshine Act, pharmaceutical and device manufacturers must report to CMS direct or indirect transfers of value made to physicians and teaching hospitals. "Indirect payments" are situations where a manufacturer "requires, instructs, directs, or otherwise causes" a third party to provide payment or transfer of value, in whole or in part, to a covered recipient. 

Consistent with the regulations, in October 2014 CMS explained in the preamble to its final amended regulations to Open Payments that if a pharmaceutical or device manufacturer “provides funding to support a continuing education event but does not require, instruct, direct, or otherwise cause the continuing education event provider to provide the payment or other transfer of value in whole or in part to a covered recipient,” manufacturers are not responsible for reporting that transfer of value. ACCME-accredited CME, for instance, requires a complete firewall between commercial support and an education program. Manufacturers who provide CME funding must have absolutely no control over: (a) Identification of CME needs; (b) Determination of educational objectives; (c) Selection and presentation of content; (d) Selection of all persons and organizations that will be in a position to control the content of the CME; (e) Selection of educational methods; (f) Evaluation of the activity. (See ACCME Standards for Commercial Support 1.1)

CMS also states: “[n]ot all indirect payments are required to be reported, regardless if it is a payment to a continuing education organization.” For instance, if a manufacturer does “require, instruct, direct, or otherwise cause” the CME provider to provide the payment to a covered recipient, but does not know the identity of the covered recipient during the reporting year or by the end of the quarter of the following reporting year, such payment would not be reportable. CMS’s latest FAQs, outlined below, correctly re-iterate these points. 

In summary, starting in 2016 (with reporting due by March 31, 2017), CME related payments are only reportable if a manufacturer determines that the payment or transfer of value meets the definition of an “indirect payment” and the manufacturer is aware of the covered recipient’s identity within the reporting year or second quarter of the following year.

View screenshots from CMS's previous language here (zoom as necessary with the PDF). 

Frequently Asked Questions

If an applicable manufacturer gave a contribution to support a medical conference, but did not have any say in the content, speakers, or attendees, would this be considered an unrestricted donation? Or, is the fact that the money was specifically for an educational conference mean that it is, by definition, restricted?

Unrestricted donations to a medical conference as described in this FAQ would not be subject to reporting under Open Payments. Although there is no formal definition of an unrestricted donation, in this case we can take that term to mean a grant given by a reporting entity to a professional association for use without any restrictions, preconditions, or post-conditions in order to assist the professional or educational association with its administrative or educational needs. In accordance with the definition of an indirect payment at 42 C.F.R. §403.902, an applicable manufacturer that contributes funding to a medical/educational conference would be required to report the payment if the reporting entity determines that it meets the definition of an indirect payment at 42 C.F.R. §403.902. An indirect payment is defined at 42 C.F.R. §403.902 as a payment or other transfer of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient.

Starting with 2016 Open Payments data collection and reporting to CMS in 2017, are payments provided by an applicable manufacturer to a continuing education organization for continuing education events reportable?

Yes, the payment is reportable if the applicable manufacturer determines that the payment meets the definition of an indirect payment, and the applicable manufacturer knows or can determine the identity of the covered recipient by the end of the second quarter of the following reporting year. An indirect payment is defined at 42 C.F.R. §403.902 as a payment or other transfer of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient. In accordance with 42 C.F.R. §403.904(i)(1), indirect payments or other transfers of value do not have to be reported if the applicable manufacturer is unaware of the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.

If several applicable manufacturers contribute funding to a continuing medical education (CME) program and there are several speakers, how is this reported?

In accordance with the definition of an indirect payment at 42 C.F.R. §403.902, applicable manufacturers that contribute funding to a CME program with several speakers are required to report the payments provided to physician speakers if they determine that the payments meet the definition of an indirect payment. An indirect payment is defined at 42 C.F.R. §403.902 as a payment or other transfer of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient.

Consistent with the CMS Final Rule (CMS-5060-F), there are instances where indirect payments provided by an applicable manufacturer to a CME program are not reportable. In accordance with 42 C.F.R. §403.904(i)(1), indirect payments or other transfers of value are excluded from reporting where the applicable manufacturer is unaware of the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.

If the payment is a reportable payment, then the amount should be equally divided among the known covered recipient speakers.

 

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