Analysis

Transparency and the Physician Payments Sunshine Act

The pharmaceutical industry spent approximately $27 billion in 2012 promoting and marketing its products to physicians. These payments, and those made by the medical device industry, create medical conflicts of interest, which, according to the Institute of Medicine, “threaten the integrity of scientific investigations, the objectivity of professional education, the quality of patient care, and the public’s trust in medicine.”

The Sunshine Act, signed into law in 2010, mandates that financial relationships between physicians and pharmaceutical manufacturers and medical device companies be disclosed to the public. Specifically, industry must report annually most of the payments and other "transfers of value" made to doctors and teaching hospitals.

What is a “transfer of value”?

Companies must report any payment worth at least $10, such as

  • Funding for speaking, consulting, travel, educational conferences, or research.
  • Gifts such as meals and textbooks.
  • Charitable contributions.

How specific are the disclosures?

Companies must report the receiving physician’s name and address, as well as the value, date, and nature of the payment. When a payment for marketing, education, or research is specific to a drug or device, the name of that product must be reported.

Does the law limit gifts and payments?

The law requires the public disclosure of financial relationships between physicians and industry but places no limits or restrictions on them.

Will the law stifle medical innovation and research?

The law is not meant to stifle collaboration between industry and physician—a critical factor in the discovery of new medications and devices—but to ensure transparency in these relationships. Similar transparency provisions in individual states have not been shown to reduce research and development investment or academic-industry collaboration.

How will payment information be made available?

The law requires payments to be published annually on a searchable and sortable website. In addition, annual summary reports will be produced by the Centers for Medicare & Medicaid Services.

Has the law been implemented?

Reporting of payment information was required by law for calendar 2012, with the first public release of data in March 2013. Because of delays in the rule-making process at CMS, however, the first release of data (for part of 2013) is scheduled for September 2014.