Physician Payment Sunshine Act Final Rule: Research

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Under the Physician Payment Sunshine Act Final Rule, certain research payments or other transfers of value made to a covered recipient by an applicable manufacturer under a product research or development agreement may be delayed from publication on the website.  “This provision seeks to balance the need for confidentiality of proprietary information with the need for public transparency of payments to covered recipients that could affect prescribing habits or research outcomes.” 

Publication of a payment or other transfer of value is delayed when made in connection with the following instances: 

(1)  Research on or development of a new drug, device, biological, or medical supply, or a new application of an existing drug, device, biological, or medical supply.

(2)  Clinical investigations regarding a new drug, device, biological, or medical supply. 

CMS clarified that “All payments or other transfers of value that are related to research, as defined in §403.902, and are made pursuant to a written research agreement for research related to new products will be granted a delay.” 

However, “payments or other transfers of value related to research for new applications of products already on the market will be treated differently due to the statutory distinction between new products and new applications of existing products. Pursuant to the statute, payments related to research on new applications of existing products will be granted a delay only if the research does not meet the definition of “clinical investigation.”  CMS recognized that clinical investigations are a subset of research; however, “the statute clearly differentiates them for purposes of delayed publication from research and development, and indicates that payments or other transfers of value made in connection with clinical investigations related to new applications of existing products should not be granted a delay.” 

Given the broad scope of the statutory definition of “clinical investigation,” CMS stated that it includes Phases I through IV clinical research for drugs and biologicals, and approval trials for devices (including medical supplies).”  CMS also amended the regulatory definition to include biologicals and medical supplies, as well as drugs and devices, since all product types should be treated similarly. 

CMS also clarified that for “purposes of determining eligibility for delayed publication under section 1128G(c)(1)(E) of the Act, new generic products will be considered new products, including drugs receiving approval under an Abbreviated New Drug Application, and devices under the 510(k) process. 

However, CMS stated that payments for “business development activities” will not be granted a delay.  In addition, CMS clarified that only payments or other transfers of value that meet the definition of research and could be reported under the “research” nature of payment category will be granted a delay.  “Any related payments or other transfers of value that would not be reported as a part of the “research” nature of payment category, … will not be granted delayed publication. 

(b) Research or development agreement.  The research or development agreement must include a written agreement, a research protocol, or both between the applicable manufacturer and covered recipient.  CMS noted, however, that applicable manufacturers do not need to provide research protocols or other such agreements to CMS for verification. 

CMS, however, agreed that requiring both a written agreement or contract and a research protocol is limiting for some types research, so CMS finalized that if a payment falls within the nature of payment category for research, it only needs to be subject to a written agreement or contract or a research protocol.   

“This may include an unbroken chain of agreements (instead of a single agreement between the applicable manufacturer and the covered recipient) which link the applicable manufacturer with the covered recipient because CMS understands that many applicable manufacturers use other entities such as contract research organizations (CROs) (as defined in 21 CFR 312.3(b)), or site management organizations (SMOs) to manage their clinical research activities.”  For example, “agreements between an applicable manufacturer and a CRO, between a CRO and an SMO, and then between an SMO and a teaching hospital would be considered a continuous chain of agreements from the applicable manufacturer to a covered recipient and would be considered a research agreement.” 

(c) Date of publication.  Payments or other transfers of value eligible for delayed publication must be reported to CMS (in the manner required in §403.904(f)) on the first reporting date following the year in which they occur, but CMS does not publicly post the payment until the first annual publication date after the earlier of the following: 

(1)  The date of the approval, licensure or clearance of the covered drug, device, biological, or medical supply by FDA.

(2)  Four calendar years after the date the payment or other transfer of value was made. 

CMS clarified that “Congress clearly intended that all payments should be included on the public website, even if a product never received FDA approval, licensure or clearance.” 

(d) Notification of delayed publication.  

(1)  An applicable manufacturer must indicate on its research report to CMS whether a payment or other transfer of value is eligible for a delay in publication.  The absence of this indication in the report will result in CMS posting all payments publicly in the first year of public reporting.

(2)  An applicable manufacturer must continue to indicate annually in its report that FDA approval, licensure, or clearance of the new drug, device, biological or medical supply to which the payment or other transfer of value is related, is pending.

(3)  An applicable manufacturer must notify CMS during subsequent annual submissions, if the new drug, device, biological or medical supply, to which the payment is related (or the new application of the existing drug, device, biological, or medical supply), is approved by the FDA.

(4)  Failure to notify CMS when FDA approval occurs may be considered failure to report, and the applicable manufacturer may be subject to civil monetary penalties.

(5)  If, after 4 years from the date of a payment first appearing in a report to CMS, there is an indication in a report that the payment is subject to delayed reporting, it is reported regardless of the indication. 

CMS agreed that that applicable manufacturers are not required to indicate that payments or other transfers of value are eligible for delayed publication and may instead choose not to indicate eligibility for the delay.  However, if a manufacturer does not indicate that a payment or other transfer of value is eligible for delayed publication, it will be published immediately on the next publication date.  Accordingly, CMS adopted its proposed process.   

e) Confidentiality.  Information submitted and eligible for delayed publication is considered confidential and will not be subject to disclosure under 5 U.S.C. 552, or any similar Federal, State, or local law, until on or after the date on which the information made available to the public as required in this section. 

CMS acknowledged that “reporting payments or other transfers of value for research activities is extremely complicated, since many research activities include large payment amounts which are spread across numerous activities and parties, and acknowledge that our proposed method did not fully address this complexity.” 

Scope of Research:  Based on comments, CMS defined research based on the Public Health Service Act definition of research in 42 CFR 50.603; which defines research as: “a systematic investigation designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social-sciences research.  This term encompasses basic and applied research and product development.”  CMS concluded that “this definition includes pre-clinical research and FDA Phases I-IV research, as well as investigator-initiated investigations.” 

Regarding reporting of research-related payments which do not meet the definition of research, CMS stated that applicable manufacturers should report using the other categories available.  For example, CMS noted that the “grant category could be used to sufficiently describe some of the transactions.”  CMS further explained that “any payments related to the definition of research discussed previously should be reportable.”

CMS noted that the statute does not limit the reporting requirements to licensed physicians who regularly treat patients; thus, CMS plans “to require reporting of research payments to PIs who meet the definition of “physician,” even if they do not regularly treat patients.” 

Finally, “material transfers (such as provision of a protein) to a researcher for discovery collaboration does not need to be reported when not part of a commercial or marketing plan and precedes the development of a new product.”  CMS said that for the purposes of this regulation that due to the early stage of the research process, “the transferred material does not have independent value.” 

Reporting Research Payments:  Applicable manufacturers must report research-related payments that ultimately are paid, in whole or in part, to a covered recipient (physician or teaching hospital). 

CMS finalized that applicable manufacturers must report research payments separately in a different template, since CMS will be requiring the reporting of modified information. Applicable manufacturers will not be responsible for indicating whether a payment was direct or indirect.  Instead, a single research payment is reported once and includes the entity paid, as well as the name of the principal investigator(s).  Applicable manufacturers must report each research payment once as a single interaction. 

They must report the name of the individual or entity (regardless of whether it is acovered recipient) that received the payment for the research services, as well as the principal investigator(s).  When reporting the entity or individual that received the payment, CMS intends for the applicable manufacturer to report the entity or individual that received the payment, either directly from the applicable manufacturer or indirectly through a CRO or SMO.  CMS said that the recipient of the payment could include individual principal investigators, teaching hospitals, nonteaching hospitals or clinics. CMS intends for the principal investigator(s) to include the individual(s) conducting the research or providing the services on behalf of the research institution. 

Applicable manufacturers are required to report the following for each research-related payment that ultimately is paid, in whole or in part, to a covered recipient (physician or teaching hospital): 

(i)    Name of the research institution, individual or entity receiving the payment or other transfer of value.

A.  If paid directly to a physician covered recipient, all of the following must be provided:

(1)  The physician’s name as listed in the NPPES (if applicable).

(2)  National Provider Identifier.

(3)  State professional license number(s) (for at least one State where the physician maintains a license) and State(s) in which the license is held.

(4)  Specialty.

(5)  Primary business address of the physician(s).

B.  If paid directly to a teaching hospital covered recipient, list the name and primary business address of teaching hospital.

C. If paid to a non-covered recipient (such as a non-teaching hospital or clinic), list the name and primary business address of the entity.

(ii)  Total amount of the research payment, including all research-related costs for activities outlined in a written agreement, research protocol, or both.

(iii) Name of the research study.

(iv) Name(s) of any related covered drugs, devices, biologicals, or medical supplies (subject to the requirements specified in paragraph (c)(8) of this section) and for drugs and biologicals, the relevant National Drug Code(s), if any.

(v)  Information about each physician covered recipient principal investigator (if applicable) set forth in paragraph (f)(1)(i)(A) of this section.

(vi) Contextual information for research (optional).

(vii) identifier (optional). 

CMS said that providing the “study name will provide information on the research topics,” but CMS has also included an optional field allowing applicable manufacturers to provide additional contextual information on or the objectives of the research—this is intended to be used similarly to the additional context allowed for reporting all payments or other transfers of value.  Additionally, CMS will allow applicable manufacturers to provide the Identifier to allow consumers the ability to obtain more information on the study from, however, this category will be optional.  CMS acknowledged that it “may identify other optional fields, such as information on publications related to the research, in order to provide additional information and background on the public website.” 

Pre-clinical Research 

CMS slightly modified reporting requirements for pre-clinical research “since such early stage research is often not connected to a specific product.”  CMS stated that pre-clinical research includes “laboratory and animal research that is carried out prior to beginning any studies in humans, including FDA’s defined phases of investigation.” 

(2)  For pre-clinical studies (before any human studies have begun), applicable manufacturers only have to report the following information:

(i)    Research entity name (as required in paragraph (f)(1)(i) of this section).

(ii)  Total amount of payment (as required in paragraph (f)(1)(ii) of this section).

(iii) Principal investigator(s) (as required in paragraph (f)(1)(v) of this section), including



State professional license number(s)


Business address

 There is no requirement to report an “associated product, or study name.” 

CMS also finalized what should be included in the total research payment amount.  “The amount should include the aggregated amount of any payments for services included in the written agreement/research protocol.”  CMS envisioned that this would include the “costs associated with patient care, including diagnostics, exams, laboratory expenses, time spent by health care professionals treating the patient and managing the study, and the provision of study drugs, devices, biologicals, and medical supplies or other in-kind items.   

The payment amount “should not include any payments for activities which are separate or segregable from the written agreement or research protocol or are paid through a method different than that of the research.”  For example, payments made directly to a physician “for serving on a study steering committee or data monitoring committee that are not a part of the larger research payment should be reported separately.”   

Payments for medical research writing and/or publication would be included in the research payment, if the activity was included in the written agreement or research protocol and paid as a part of the research payment.  In addition to research payments, CMS also stated “that meals and travel should be reported separately (under the food and travel nature of payment categories) unless included in written agreement or research protocol and paid for through the large research contract.” 

CMS said it does not intend for applicable manufacturers to be “required to itemize each research payment, since they are usually large payments obligated to general administration of the study and the applicable manufacturer may not be aware of the daily activities.”   

Additionally, CMS said it will “not require the reporting of payments to non-covered recipients that are not passed on to covered recipients.”  For example, if an applicable manufacturer paid separately for a non-covered recipient to travel to a meeting, then it would not need to be reported.  However, if an applicable manufacturers paid separately for a covered recipient (regardless of whether the individual was a PI or not) to travel to a meeting, then the travel would have to be reported in the name of the covered recipient traveling. 

When reporting research payments, CMS also acknowledged that research payments are generally different than other payments and may not represent a payment to thecovered recipient.  For physician covered recipients whom are paid by a third party and not directly by the manufacturer, CMS will list research studies separately from all other payments provided to the covered recipient.  For teaching hospitals, CMS will publish all research payments which went to the hospital as a research institution.  These will be listed separately from other payments to the hospital, but will include both the study amount and study name.

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