The Sunshine Act: The Good, the Bad, and the Ugly

Industry Insights from Paul Meade, M. Sc, MPH

The Sunshine Act is on the horizon, and all we know for certain is that things will be different. Will the changes be good, bad, or ugly for healthcare and the biopharmaceutical industry? Well, a bit of all three. But it is a bit like the Y2K scare, or the coming of the end of the world in December 2012 predicted by the Mayans—people in healthcare and biopharma are on alert, and no one really knows for certain how this will all play out.

Let’s start with the good, since there will be greater transparency in the interactions between manufacturers and physicians. The intended outcomes will be greater standards of remuneration for services rendered by healthcare professionals to various manufacturers, some defined threshold limit of activities (type and quantity) deemed permissible by institutions for their affiliated physicians, and a greater sense of awareness of the interactions between healthcare professionals and manufacturers, presumably by a concerned public.

With regard to the first outcome, it is hoped that some kind of industry standard for Fair Market Value will be established for the activities physicians are often engaged in when dealing with manufacturers. It will likely serve to “level the playing field,” so some manufacturers will not pay excessively for a given activity, such as consultative services. As for the second outcome, a small number of highly-regarded and globally-recognized experts are heavily involved in activities with several manufacturers in their field of expertise, and their academic institutions are often unaware to the extent of this involvement. So the institutions may place limits on the total amount of remuneration or total number of certain activities permitted by their healthcare professionals (some institutions have already done these things). These overall limits are set almost arbitrarily without regard to the types of activities, or evaluating the merits of one activity over another one. Perhaps these institutions will now begin to place a bit more scrutiny in the types of activities their physicians are engaged in with manufacturers, and take into account their overall qualifications and global stature in the medical community.

The third outcome relates to a concerned public, which may be the biggest unknown facing those dealing with the Sunshine Act. Is there really public concern over the interactions between physicians and manufacturers? I believe that this concern is real only to the extent that such interactions may be perceived as compromising the objectivity and integrity of those physicians, and less real as to their degree of compensation for such services.

Now, let’s talk about the bad. Manufacturers have to report all expenditures over $10 that they pay to a physician or institution, even if it is for a sandwich for lunch. If there are any mathematicians in the house, can you attempt to calculate how many transactions will need to be reported between 800,000 physicians in the United States and over 300 manufacturers over a 12-month period? It’s a number likely to be in the hundreds of millions. So here are two questions: firs, who will read all of this data, and second, who pays for all this? I sure hope the answers are not no one and all of us, respectively!

If physicians fear too many repercussions from both the institutions they work in, as well as from the patients they serve, might they just cease to work with any manufacturer at all? No more clinical studies, no more conferences, no more research publications, and no more scientific advisory board meetings associated in any way with a manufacturer. This could be bad! There has been a long-standing working relationship between the medical profession and manufacturers that has served to bring innovation and discovery to the field of healthcare in the United States. Could legislation designed to bring greater transparency to such interactions have such grave unintended consequences that this entire symbiotic relationship could be thrown into chaos? Could the United States lose its reputation and competitive advantage across the globe for innovation in healthcare simply to meet the demands to report all financial transactions between physicians and manufacturers? And for whom and for what ultimate purpose? This could get really bad very soon!

Finally, let’s face the ugly. Sometimes the best plans have such dire unintended consequences that the end results never even come close to outweighing the benefits. If the Sunshine Act results in a sort of “witch hunt” by the media to expose a few physicians they deem interacting excessively with certain manufacturers, then this is a very ugly outcome, indeed. If great reputations become destroyed by an over-zealot press trying to bring a “story” to their readers, then this entire effort to achieve greater transparency will fall flat on its face. To quote from MacBeth, “It is a tale, full of sound and fury….signifying nothing.” And that would be ugly!

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