The CMS (Centers for Medicare and Medicaid Services) announced the long-awaited Sunshine Act final rule which will raise public awareness of the financial relationships between medical device and pharmaceutical companies and doctors and teaching hospitals.

Peter Budetti, MD, CMS deputy administrator for program integrity said that patients have the right to know whether their doctor has a financial relationship with the makers of medical devices or medications they may need. “Disclosure of these relationships allows patients to have more informed discussions with their doctors.”

The “National Physician Payment Transparency Program: Open Payments” is one of several steps in the Affordable Care Act aimed at creating greater transparency in health care.

Peter Budetti, M.D. CMS deputy administrator for Program Integrity, said:

“You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need. Disclosure of these relationships allows patients to have more informed discussions with their doctors.”

The rule, known as the Physician Payments Sunshine Act, is the final step in making sure that manufacturers of medications, medical devices, medical supplies and biologicals which are covered by CHIP (Children’s Health Insurance Program), Medicaid, or Medicare tell CMS about payments or any other transfers of value that are sent to doctors and teaching hospitals.

All physician disclosure data received by CMS will be posted in a public website. Manufacturers and GPOs (group purchasing organizations) will have to disclose to CMS whether any doctors have investment or ownership interests.

The aim of this greater transparency is to help reduce the conflict-of-interest situations that doctors or teaching hospitals might face if there is a relationship with manufacturers.

Applicable GPOs and manufacturers will be bound by this new reporting requirement. These organizations, as well as teaching hospitals and doctors, will be able to check through the information about them before it is published online.

So that applicable GPOs and manufacturers have plenty of time to prepare, the collection of data will start on August 1st, 2013. GPOs and manufacturers will report data from August to the end of December 2013 to CMS by March 31st, 2014, at the latest. These data will be released by CMS online by September 30th, 2014. In order to facilitate the reporting process, CMS is developing an electronic system.

You can download the final rule at

Jeremy A. Lazarus, MD, President, American Medical Association, wrote in an online communiqué:

“The AMA will carefully review the new Physician Payment Sunshine Act rule. Physicians’ relationships with the pharmaceutical industry should be transparent and focused on benefits to patients.

Our feedback during this rulemaking process was aimed at ensuring the new registry will provide a meaningful picture of physician-industry interactions and give physicians an easy way to correct any inaccuracies. As the rule is implemented, we will work to make sure physicians have up-to-date information about the new reporting process.”

Laws designed at more transparency, forcing doctors to reveal their financial links with pharmaceutical companies, have “little or no effect on what medications doctors prescribe”, according to a study carried out by Genevieve Pham-Kanter, Ph.D., an assistant professor in the Department of Health Systems, Management and Policy at the Colorado School of Public Health and a research fellow at Harvard University and Massachusetts General Hospital.

If the policymakers who pass these measures expect a change in prescribing practices, they may be disappointed, Pham-Kanter explained. The study was published in Archives of Internal Medicine (May 2012 issue).

Pham-Kanter and team were specifically investigating the effect of the laws on the prescribing of HMG-CoA reductase inhibitors (statins) and selective serotonin reuptake inhibitors (SSRIs). They theorized that if disclosure laws were really effective and deterred doctors from receiving money from drug manufacturers, they in turn would be less likely to prescribe branded statins and SSRIs over similar generic medications.

They compared Maine, which introduced a disclosure law in 2004 with New Hampshire and Rhode Island, two states with no such laws but similar demographics. Then they compared West Virginia, which passed a disclosure law in 2004, with Kentucky and Delaware which also had no such laws.

They found that the laws had little to no effect in Virginia, and a small but not significantly important effect in Maine.

Pham-Kanter said “Our results show that the disclosure laws in the two states we examined had a negligible to small effect on physicians switching from branded therapies to generics and no effect on reducing prescription costs.”

Written by Christian Nordqvist