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Will Sunshine Fix Pharmaceutical Payments To Doctors?

For years, the medical and pharmaceutical industries have come under fire for the gifts and money that flows from drug makers to doctors. Amid concerns that doctors will develop biases and steer patients to certain medications or medical devices, the federal government and others are turning to a time-tested solution: sunlight.

Starting in September 2014, the payments and gifts that pharmaceutical and medical device companies make to doctors will be in a searchable database that will be available to the public. The database, which has been delayed as regulations are finalized, is the result of the Physician Payment Sunshine Act, a 2010 law that required the disclosure of financial ties between manufacturers and medicine.

The Problem With Payments

Accepting payments from pharmaceutical companies is not necessarily illegal, although it can raise ethical concerns. Kickbacks – using money or other things of value to influence health care decisions – are illegal for federal health care services.

In one recent large case, a psychiatrist was accused of receiving illegal kickbacks from pharmaceutical companies and submitting false claims to Medicare and Medicaid for anti-psychotic patients. The doctor was alleged to have routinely prescribed the medication based on kickbacks and not the patients’ needs. His heavy reliance on the drug was linked to at least three deaths – a doctor malpractice issue.

One idea behind the Sunshine Act is that by making the financial relationships between the drug and medical device industry public, illegal kickbacks could be curbed. As the celebrated U.S. Supreme Court justice Louis Brandeis wrote 100 years ago, “sunlight is said to be the best of disinfectants.”

How The New Law Works

The new law requires drug and medical device companies to disclose payments made to doctors, teaching hospitals and health advocacy groups. Under the law, companies must disclose payments of more than $10 for contributions such as:

  • Food
  • Entertainment
  • Gifts
  • Consulting fees
  • Research funding or conference funding
  • Stock options

Implementation of the law has been delayed because of pharmaceutical and medical industry concerns. Now, manufacturers will not have to track buffet meals or cups of coffee, for example, but other meals must be recorded. Companies were supposed to begin data collection in 2012. The new deadline is Aug. 1, 2013. The data will become available to the public on Sept. 30, 2014.

Other Databases Available

The planned database is not the first attempt to shed light on the complex financial relationships between doctors and drug and device manufacturers.

ProPublica, the investigative journalism organization, says that 12 companies already publicize information about payments. ProPublica created a database that allows patients to see what their doctor has received. The group’s database shows $89.4 million in payments to California practitioners.

To learn more about the Sunshine Act, pharmaceutical companies and medicine, contact the northern California medical malpractice attorneys at CMA by calling (408) 289-1417.

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