Sunshine Act Introduced In US

New Database Launched Regarding Payments From Medical Manufacturers To Professionals


The American Federal Open Payments database is now online as part of reforms implemented under the US ‘Physician Sunshine Payments Act’ (the Sunshine Act).

The database was proposed in the US in 2010 as part of the Affordable Care Act, and requires manufacturers and certain distributors of medical devices, drugs, biologicals and medical supplies to track and record certain payments provided to physicians and teaching hospitals in the US. The information should be released on the publically available database today.

The database is part of a move to increase transparency in the US pharmaceuticals market, following a number of high profile scandals over payments made by the pharmaceutical industry to medical providers as an incentive to use their drugs or surgical devices.

In 2007, the five major orthopaedics providers to the US – Zimmer inc., De Puy Orthopaedics inc, Biomet inc, Smith and Nephew inc. and Stryker inc – were investigated for paying financial inducements to surgeons to use their products, in violation of federal anti-kickback laws.
A statement released by the District Attorney at the time described the payment of such inducements as “common practice” during the time of the investigation between 2002 and 2006, adding that surgeons who had agreements with the companies were typically paid large sums for consulting contracts and lavished with trips and other ‘expensive perquisites’.

The companies, which at the time held a combined share of over 95% of the orthopaedic device market, avoided prosecution by paying fines of between $26 million and $165 million each and agreeing to enter into a strict 'corporate compliance' monitoring regime overseen by the federal government over the following 18 months.

The prevalence of the use of inducements to medical providers worldwide was recently underlined by two criminal investigations into the behaviour of UK pharmaceutical giant Glaxo-Smithkline.

The first, in Poland, concerned the promotion of the asthma drug Seretide. Former employees of the company allege that payments made to physicians in Poland under the guise of reimbursement for educational services were in fact inducements to prescribe Seretide. One Doctor has so far admitted guilt and received a suspended sentence; the investigations are ongoing.

This month, GSK received a £297 million fine from the Chinese government and four senior executives received suspended prison sentences for paying as much as £300 million in bribes to Doctors in order to increase sales.

It is hoped that the open payments database will at least reduce the incidence of financial inducements in America, returning the focus to patient safety.

Commenting on the issue, Matthew Newbould, a legal expert who specialises in defective product claims at Irwin Mitchell, said: "In spite of what might seem an obvious problem, pharmaceutical companies are not obliged by law to disclose any information on payments made to physicians in the UK. 

“An industry agreement applies to members of the Association of the British Pharmaceutical Industry to provide aggregated figures, which shows payments from British Pharmaceuticals to physicians in 2012 and 2013 of around £40 million per annum. However, as there is no obligation to specify the amount, or the reason for, individual payments, the recipients of the money and the reason for payment remain unknown.

“Although the European Federation of Pharmaceutical Industries and Associations has pledged to produce publically searchable websites setting out full details of payments made by its members to individual physicians by 2016, the ability and desire of an industry geared for profit to regulate itself is clearly open to question.

“The recent allegations against Glaxo-Smithkline suggest that the predicted revolution has yet to take hold in Europe. The issue of inducements remains a serious one, both in terms of patient risk and confidence in the medical sector as a whole.

“The Sunshine Law is likely to be a powerful safeguard against the payment of inducements in the US. In our view, the case for similar legislation in the UK and Europe is compelling.”