Community Catalyst and 18 other consumer, patient safety and labor groups weighed in last week in support of (with important “friendly amendments”) draft regulations issued by the Centers for Medicare and Medicaid Services (CMS) requiring that the drug, biologics and medical device industries publicly report all payments to physicians and teaching hospitals. See here and here. As a result, all of these industry payments will be displayed on a publicly available website, where the information can be viewed by patients, or downloaded and studied.

Over 300 organizations submitted comments on these “sunshine” provisions of the health reform law. That’s a surprising number of comments, given that the provision doesn’t affect a patient’s right to benefits, or set up a new program or regulate insurance. The provision simply requires transparency in virtually all drug and device industry payments to physicians and to the teaching hospitals that train doctors or host biomedical research. Such transparency is critical for patients and the health care system, because it can expose industry marketing that undermines good prescribing, trust in doctors and affordable care. As Senator Chuck Grassley, who long championed the bill with Senator Herb Kohl, said in 2009, “Transparency fosters accountability, and the public has a right to know about financial relationships. Patients rely on their doctors’ advice. Taxpayers spend billions every year on prescription drugs and medical devices through Medicare and Medicaid. They also fund tens of billions of dollars of medical research each year, and the doctors conducting that research have a big influence on the practice of medicine.”

This transparency program was slated to go into effect on January 1 of this year, but the Department of Health and Human Services and CMS have been behind on issuing the rules. All 18 consumer and labor groups urged that this transparency be started as soon as possible after the final rule is issued. There’s no legitimate reason to delay further, because the nation’s biggest drug makers have already been reporting their payments as a result of federal investigations or settlements of possible illegal kick-backs paid to doctors. And nearly all of these manufacturers have been reporting these payments to the States of Vermont, Minnesota and Massachusetts, under state transparency laws.

The proposed rules address many complicated issues. For instance, how any payment to a doctor is labeled, as a ‘gift’ or ‘consulting fee’ or a payment for ‘research,’ etc. We urged CMS to adopt clear-cut, non-overlapping definitions to ensure that all the information is accurate, understandable to the public, and not open to manipulation. We also applauded a number of CMS proposals to improve the public’s ability to understand what payments are for, such as separating ‘lump sum’ payments into smaller units. This will help prevent industry from trying to bury inappropriate payments for lavish meals or travel to fancy resorts within a larger payment for ‘education’ or ‘research.’

We also applauded CMS efforts to prevent loopholes, by including all drug and device manufacturers, regardless of whether their products are manufactured overseas, and by including payments made to doctors through third parties, where appropriate. Plugging these potential large loopholes is essential to real transparency.

Under the statute, research payments must be reported but can be delayed for four years to protect industry from competition during product development. However, we urged CMS to narrow the definitions so that payments related to research on new uses (such as ‘off-label’ uses) of drugs, biologicals and invasive implanted devises are not delayed. Numerous federal investigations and prosecutions have exposed the illegal promotion of unapproved, or ‘off-label,’ uses of drugs and devices, fostered in part by inappropriate industry ties to physicians. This has resulted in widespread harm to consumers. For instance, the illegal ‘off-label’ promotion of the epilepsy drug Neurontin resulted in 90 percent of its prescriptions being for unapproved uses. Promotion of unproven medical devices is also increasingly a problem. As a result, we asked CMS to require that payments related to ‘research’ on products that are actively being prescribed not be subject to any delay.

Finally, CMS proposed to require CEOs to personally attest to the accuracy of their company reports. We heartily agree with this requirement—accountability should be the bottom line for any company that produces the drugs that patients ingest or the devices implanted in a patient’s body.

— Marcia Hams, Director of Prescription Access and Quality, Community Catalyst — Wells Wilkinson, Staff Attorney, Community Catalyst

For more see this post.