[Senate Hearing 112-664]
[From the U.S. Government Publishing Office]
S. Hrg. 112-664
LET THE SUNSHINE IN: IMPLEMENTING THE PHYSICIAN PAYMENTS SUNSHINE ACT
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ROUNDTABLE
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC
__________
SEPTEMBER 12, 2012
__________
Serial No. 112-22
Printed for the use of the Special Committee on Aging
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SPECIAL COMMITTEE ON AGING
HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon BOB CORKER, Tennessee
BILL NELSON, Florida SUSAN COLLINS, Maine
BOB CASEY, Pennsylvania ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri MARK KIRK III, Illinois
SHELDON WHITEHOUSE, Rhode Island DEAN HELLER, Nevada
MARK UDALL, Colorado JERRY MORAN, Kansas
MICHAEL BENNET, Colorado RONALD H. JOHNSON, Wisconsin
KIRSTEN GILLIBRAND, New York RICHARD SHELBY, Alabama
JOE MANCHIN III, West Virginia LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut SAXBY CHAMBLISS, Georgia
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Chad Metzler, Majority Staff Director
Michael Bassett, Ranking Member Staff Director
CONTENTS
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Page
Opening Statement of Senator Herb Kohl........................... 1
Statement of Senator Senator Chuck Grassley...................... 2
Statement of Senator Richard Blumenthal.......................... 7
PANEL OF WITNESSES
Diane Biagianti, Vice President, Chief Responsibility Officer,
Edwards Lifesciences, Irvine, CA............................... 6
Daniel Carlat, MD, Project Director, Pew Charitable Trusts,
Washington, DC................................................. 7
Jeremy Lazarus, MD, President, American Medical Association,
Washington, DC................................................. 8
Elizabeth O'Farrell, Senior Vice President, Policy and Finance,
Eli Lilly & Company, Indianapolis, IN.......................... 8
Douglas Peddicord, Ph.D., Executive Director, Association of
Clinical Research Organizations (ACRO), Washington, DC......... 9
Statement of Charles Rosen, MD, Clinical Professor of Orthopedic
Surgery, University of California, Irvine, School of Medicine,
Orange, CA..................................................... 10
James Scully, Jr., MD, Medical Director and CEO, American
Psychiatric Association, Arlington, VA......................... 11
Niall Brennan, Director, Policy and Data Analysis Group, CMS,
Washington, DC................................................. 12
APPENDIX
Witness Statements for the Record
Diane Biagianti, Vice President, Chief Responsibility Officer,
Edwards Lifesciences, Irvine, CA............................... 38
Daniel Carlat, MD, Project Director, Pew Charitable Trusts,
Washington, DC................................................. 43
Jeremy Lazarus, MD, President, American Medical Association,
Washington, DC................................................. 46
Elizabeth O'Farrell, Senior Vice President, Policy and Finance,
Eli Lilly & Co., Indianapolis, IN.............................. 99
Douglas Peddicord, Ph.D., Executive Director, Association of
Clinical Research Organizations (ACRO), Washington, DC......... 104
Additional Statements Submitted for the Record
Advanced Medical Technology Association, Washington, DC.......... 114
CME Coalition, Washington, DC.................................... 121
MMIS, Inc., Portsmouth, NH....................................... 138
National Dialogue for Healthcare Innovation, Washington, DC...... 140
U.S. Department of Health and Human Services, Office of Inspector
General, Washington, DC........................................ 143
LET THE SUNSHINE IN: IMPLEMENTING THE PHYSICIAN PAYMENTS SUNSHINE ACT
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WEDNESDAY, SEPTEMBER 12, 2012
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 2:31 p.m. in Room
SD-562, Dirksen Senate Office Building, Hon. Herb Kohl,
chairman of the committee, presiding.
Present: Senators Kohl [presiding], Blumenthal, and
Grassley.
OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN
The Chairman. Good afternoon. We thank you all for coming
here, especially Senator Grassley.
Today we will discuss the Physician Payments Sunshine Act,
a law that Senator Grassley and I worked on together.
Unfortunately, the Sunshine Act's implementation is a year
late, which is both troublesome as well as not acceptable.
In November 2010, Senator Grassley and I asked Secretary
Sebelius about implementing the Sunshine Act according to the
timeframe in the law. Almost two years later, I'm disappointed
to say, we're still asking these same questions. Industry,
doctors, and consumers deserve better. I have repeatedly
requested that CMS provide a timeline for implementation.
Secretary Sebelius and CMS tell us that the rule will be
finalized by the end of the year, so we expect CMS to honor
that commitment, and hopefully CMS can get this done even
sooner.
The Sunshine Act ensures the openness and transparency of
the financial ties between doctors and the drug and medical
device industries. These financial relationships are valuable
and lead to new therapies and technologies, but the public has
a right to know about these financial ties.
As many stakeholders who worked with Senator Grassley and
me to develop the law know, the Act was never meant to be
burdensome. In fact, many medical device and drug companies are
already releasing information about payments to doctors
voluntarily or as required by state law.
The Federal law set reasonable timelines requiring rules on
how to operate the Sunshine Act by October 1st of last year,
and to date CMS has not finalized the rules, leaving consumers
and manufacturers in the dark. We urge CMS to finish the rules
and ensure that the definitions and guidelines are clear and
workable for industry and patients alike.
Most importantly, the information must be made available to
the public, must be easily understood and provide enough
context for patients to understand why their doctors' names
appear on the website.
All the stakeholders, consumer and industry groups
together, want a fair rule and want it issued now. That is why
we're here today, to give CMS and all the players a chance to
discuss how best to make the Sunshine law a reality and to
ensure that CMS is listening to the questions and concerns
these companies and groups bring to the table.
With that, I invite Senator Grassley to provide his opening
statement before we turn this roundtable over to Dr. McClellan.
STATEMENT OF SENATOR CHUCK GRASSLEY
Senator Grassley. Thank you, Mr. Chairman. I thank you for
your leadership, and particularly I thank you for your
bipartisanship on this effort and how you conduct the work of
your committee.
I thank everybody in the room for coming, particularly
those at the table here who have to do the hard work and
prepare for it, and particularly for Dr. McClellan leading the
discussion.
In 2007, I began conducting extensive oversight and seeking
disclosure of industry financial ties with groups, including
taxpayer-funded research, physicians, medical schools, medical
journals, continuing medical education companies, and patient
advocacy non-profit organizations. We exposed numerous cases
where there were vast disparities between drug company payments
received and reported by leading medical researchers.
Just two examples. At Stanford University, the Chairman of
Psychiatry received an NIH grant to study a drug while
partially owning as much as $6 million in stock in a company
that was seeking FDA approval of that drug. After exposure, the
NIH removed the individual from the grant. At Harvard
University, three professors failed to report almost a million
dollars each in outside income while heading up several NIH
grants. In response to my oversight, Harvard revised the
conflict of interest policies and conducted an internal
investigation of these professors.
These problems led to the Physician Payment Sunshine Act.
The Sunshine Act establishes a nationwide standard requiring
drug, device, and biologic makers to report payments to doctors
to the Department of Health and Human Services. It requires
information about those payments to be posted online in a user-
friendly way for public consumption. It also establishes a
penalty as high as $1 million for knowingly failing to report
the information.
Now, as we all know, the legislation was ultimately
included in Section 6002 of the Patient Protection and
Affordability Act. CMS was eventually tasked with carrying out
the Sunshine Act. The agency had until October 1st, 2011 to
issue regulations. When CMS failed to meet the deadline,
Senator Kohl and I wrote to CMS about why it failed to meet the
deadline. We asked for a timetable for issuing the preliminary
regulations and implementing the Act.
CMS' response was incomplete and very uninformative. There
was no explanation for the delay and no indication of the
expected completion date. At the time of the response, the U.S.
Government had just settled with a medical device maker for
$2.4 million over allegations of kickbacks to doctors to use
the company's product. The payments to doctors are the kind
that might be prevented through disclosure as soon as the
Sunshine Act is in place.
Senator Kohl and I then scheduled a hearing to force the
agency to publicly explain why the rule was taking so long. Not
surprisingly, because it happens so often around this town, not
only with CMS but with so many other bureaucracies, on the eve
of the hearing CMS finally issued the proposed rule. For the
most part, I was very pleased with CMS' proposed rule. CMS
stuck to the goals and the integrity of the Sunshine Act,
providing clarification where it was needed.
However, many questions remain on the technical aspects of
the rule and how the data will be presented. I have said from
the very beginning, if the information provided to the public
is not concise, easily readable and understandable, then we
have all failed the American taxpayer.
It has now been nearly nine months since the proposed rule
was issued, and CMS cannot tell us when they plan to issue the
final rule. The longer we wait, the more the taxpayers miss out
on the benefits of public disclosure.
CMS is simply dragging its feet on implementing the
Sunshine Act. But why? Because it doesn't make sense, the
dragging of the feet. Rarely do you find all stakeholders,
including consumer groups, industry, professional medical
organizations and provider organizations, MedPAC, the Institute
of Medicine, and Congress all on the same side of the issue. In
fact, industry and consumer groups sent a letter to CMS October
the 25th last year urging full implementation of the Sunshine
Act. Yet, still, there is delay.
Our efforts to engage with CMS on the implementation of the
Sunshine Act have met with resistance and silence, just like
Congress passing a law doesn't make any difference around this
town. Why is CMS so unwilling to being open and transparent
with the implementation of the process? It seems to me that the
public's business ought to be public. That's what democracy is
all about. That's what our government is all about.
I am never one to put a lot of stock into rumors. But one
that keeps popping up is that CMS has completed the final rule
and sent it over to OMB, but OMB will not issue the final
regulation until after the election.
Now, that doesn't make sense, but that is what people are
saying. CMS needs to clarify if there is any truth to this
rumor. Is the rule at OMB or not? Is it being held up until
after the election? If so, why?
We need to find out what the hold-up is, deal with it, and
get the job done. After all, how long have we been on this?
It's five or six years since the investigation started, three
years since the law was passed. The American people deserve the
full disclosure and transparency that this law promises; and
more importantly, the people we expect to comply with it,
meaning the industry, needs certainty about what the specifics
of the rule will be so that compliance can begin. The time for
delay is over.
Today's roundtable is geared towards gaining a better
understanding from CMS officials on why they have failed to
implement the Sunshine Act, their anticipated release of the
regulations, and the consequences facing industry due to the
lack of guidance from CMS. You kind of get back to something
very basic. You know, a lot of people in this country may not
like what government tells them, but they ought to tell them so
they know what the situation is.
Due to the structure of the law, companies must establish
an internal data collection system and educate all employees on
the new requirements. However, companies do not have the luxury
of going to Best Buy and purchasing the latest data collection
system off the shelf. Companies build the systems. They must
train and educate their employees on the proper use of the
system in order to properly capture the necessary data. Many
companies have already begun piloting these systems to ensure
that they are capturing all the relevant information, and I
thank them who are doing that for doing that. However, with the
lack of recognized practices from CMS on how to move forward,
companies cannot prepare to fully meet the letter of the law.
Lastly, as I did at the beginning, I want to thank our
participants in today's roundtable. Collectively, these
participants represent the government agency in charge of
carrying out the intent of the law, the industry the law is
intended to regulate, the consumer groups representing the
patients the law is intended to help and protect, and various
experts in the field, all of you folks at the table.
It is my sincere hope that CMS is prepared to be open and
honest about where it is in the process and why it has failed
to implement the law in a timely manner. Letting the sunshine
in and making information public is basic to accountability.
The sooner we can properly implement this law, the sooner we
can establish greater accountability for patients and
consumers, especially in medical research.
Thank you, Mr. Chairman. Thank you.
The Chairman. Thank you very much, Senator Grassley.
We now turn the roundtable over to Dr. Mark McClellan, and
we thank you for moderating this roundtable.
Dr. McClellan previously served as Administrator for the
Centers for Medicare and Medicaid Services, as well as the
Commissioner of the Food and Drug Administration.
I know this conversation will be productive, and we thank
the panelists, each and every one of you, for joining this
discussion.
Dr. McClellan, the roundtable is now in your hands.
Dr. McClellan. Chairman Kohl, thank you very much for that
introduction. I would like to especially thank you and Senator
Grassley for all your work over the years on the Physician
Payment Sunshine Act and working to have it implemented
effectively. It has been a real privilege for me personally to
have the opportunity to work with you not only on this issue
but on many other issues of importance to older Americans and
the financing of health care, and the quality of health care in
this country. It's a real pleasure to be part of this effort to
try to bring everyone along together on moving forward on
implementing the Sunshine Act as effectively as possible.
I think everybody here--and I had a chance to read the
statements and hear through my staff from many of you--
everybody here agrees with the goal of the Sunshine Act, bring
transparency to the health care system through accurate
disclosure of payments and other transfers of value between
different participants in it, physicians, teaching hospitals,
GPOs, manufacturers and others.
As CMS said in its proposed rule on the Act,
``collaboration among physicians, teaching hospitals and
industry manufacturers may contribute to the design and
delivery of life-saving drugs and devices. However, while some
collaboration has been official, payments from manufacturers to
physicians and teaching hospitals can also introduce conflicts
of interest that may influence research, education and clinical
decision-making in ways that compromise clinical integrity and
patient care, and may lead to increased health care costs.
Financial ties alone do not signify inappropriate
relationships. However, transparency can shed light on the
nature and extent of relationships and may dissuade
inappropriate conflicts of interest from developing.''
So that's the purpose behind the rule, and this development
of the rule has been, and I think will be a challenging task
for CMS, and striking the right balance and involving all
stakeholders in what has been an iterative process, and I
expect from the engagement of everyone here will continue to be
an iterative and constructive process, and hopefully the
dialogue that we have today can contribute in a constructive
way to helping all of this effort move forward.
I'm here to moderate. There are a lot of people around the
table. I know many of you in this room who have been deeply
involved in the issues related to the Sunshine Act for some
time. So we're going to try to make this as informative and
fast-moving a process as possible.
I want to start out by discussing some of the key issues
involved in the Sunshine Act and respond to some of the
questions and key points that the senators raised at the
outset. All of this, again, is to highlight why it's so
important for CMS to get it right. And then we'll hopefully
have some time to discuss ways to present the information
involved, ways to address the effort and the burden involved in
reporting, ways to make as much of an impact at as low of a
cost as possible from the implementation of the Sunshine Act.
So to do that, I'm going to need the help of everyone
around this table, and I'd like to start by asking each of you
to introduce yourself.
Elizabeth, maybe we can start down at your end, just a
brief introduction, and then we'll come back to the statements.
Please do press the button, right.
Ms. O'Farrell. Hi. I'm Liz O'Farrell, and I'm with Eli
Lilly and Company, where I'm Senior Vice President of Finance
and Policy.
Dr. Lazarus. Dr. Jeremy Lazarus. I'm President of the
American Medical Association.
Dr. Carlat. Dr. Daniel Carlat. I am the Director of the Pew
Prescription Project with the Pew Charitable Trusts.
Ms. Biagianti. Diane Biagianti, Vice President of Edwards
Lifesciences, Chief Responsibility Officer.
Mr. Brennan. Niall Brennan, CMS.
Mr. Peddicord. Doug Peddicord. I serve as Executive
Director of ACRO, the Association of Clinical Research
Organizations.
Dr. Rosen. I'm Charles Rosen. I'm a clinical professor of
orthopedic surgery at UC-Irvine and President and Co-Founder of
the Association for Medical Ethics.
Dr. Scully. Good afternoon. I'm Jay Scully. I'm the Medical
Director and Chief Executive Officer of the American
Psychiatric Association.
Dr. McClellan. Again, thanks to all of you for being here.
Now I would like to get to those 1-minute opening statements,
and I'd like to thank everyone for preparing the statements
they did for the record and encourage everybody here, if you
haven't had a chance to look at them already, very informative
on the topics involved today.
So I'd like to go alphabetically on these, starting, Diane,
with you.
DIANE BIAGIANTI, VICE PRESIDENT, CHIEF RESPONSIBILITY OFFICER,
EDWARDS LIFESCIENCES, IRVINE, CA
Ms. Biagianti. Chairman Kohl, Senator Grassley, and Dr.
McClellan, thank you very much for the opportunity to
participate in this roundtable. We commend you for your
continued efforts to ensure that the Physician Payment Sunshine
Act is promptly and effectively implemented as part of the
Affordable Care Act.
Edwards Lifesciences is a California-based medical
technology company that has maintained global leadership in the
science of heart valves and hemodynamic monitoring for several
decades. We support transparency because strong collaboration
between scientists, engineers, entrepreneurs, and the clinical
community is key to innovation. It was the close collaboration
between a cardiothoracic surgeon and an engineer that created
the first commercially available artificial heart valve more
than 50 years ago. That was the beginning of our company and
almost all the products we have made since then were created as
a result of this kind of collaboration.
Based on our belief that the greater transparency will help
the public better appreciate what we do with clinicians,
Edwards Lifesciences decided four years ago to become the first
medical device company to initiate a voluntary payment
disclosure program. We appreciate the opportunity to
participate here today and hope our experience with
transparency will help answer your questions and inform the
dialogue.
Most importantly, we hope our answers underscore three key
points: first, that the process of medical device innovation is
unique. Device companies are extremely dependent on the input
and guidance from clinicians as we invent and improve upon the
products we make.
Number two, we support transparency and the need for a
final rule to issue as soon as possible. We are confident that
CMS will take into consideration the extensive comments
provided by the various stakeholders and will provide clear
guidance for companies to comply with the law.
And third, patients and the public need to be provided with
the opportunity to understand what these payments are for, an
opportunity to provide meaningful context surrounding a
transfer of value that's critical to avoid further confusion
and possible misrepresentation of what can be very important
collaboration.
Thank you.
Dr. McClellan. Great. Thanks very much, Diane.
I thought I was going to go in alphabetical order. But now,
if you don't mind, I'll let CMS be saved for last. So that
means next up is Dan.
DANIEL CARLAT, MD, PROJECT DIRECTOR, PEW CHARITABLE TRUSTS,
WASHINGTON, DC
Dr. Carlat. Thank you. Thank you, Dr. McClellan, Senator
Kohl and Senator Grassley.
The prescription project has focused on issues related to
physician-industry relationships and transparency for quite a
while now. Before I became the director of the prescription
project, I was a practicing psychiatrist and a publisher of CME
material and journals, and before that I worked with the
pharmaceutical industry in different contexts, both speaking
and research.
The Pew Health Group has been a strong proponent of the
Physician Payment Sunshine Act since 2007, and has worked in a
bipartisan fashion with pharmaceutical and device companies,
medical associations, and consumer groups to support its
passage and its implementation.
We support the Sunshine Act so strongly because of an
essential principle really of medical ethics, which is that we
must treat our patients based on the best medical evidence, and
that our treatment decisions should not be inappropriately
influenced by financial considerations.
So I look forward to today's discussion, and I'm quite
optimistic that we can move forward with the final regulations
quite rapidly, as Senator Kohl and Senator Grassley had hoped.
Thank you.
Dr. McClellan. Dan, thanks very much, and thanks for all
the work that Pew is doing on this important set of issues.
I'm going to go a little bit out of order again and turn
now to Senator Blumenthal. Thank you for joining us for this
roundtable today and, please, if you'd like to make a statement
to help us start out, that would be great.
STATEMENT OF SENATOR RICHARD BLUMENTHAL
Senator Blumenthal. Well, I actually relish those occasions
when I don't have to say anything and I can just listen, and I
want to listen. Rachel Pryor is my staff person with me today.
I want to thank Senators Kohl and Grassley for their
leadership on this issue. For all of us who have been involved
in consumer protection and advocating consumer causes, as well
as anyone who is interested in lowering the cost of health
care, this issue is so critical, and I think this kind of
conversation is very important to achieving the important ends
of the legislation.
I will be very interested in knowing more about what can be
done not only to improve the law but, most important, improve
its enforcement. I'm very interested in enforcement, in
implementation, administration, which often makes the law real
in people's lives. And I think that disclosure, sunshine, full
transparency, the more the better, and really just want to
thank all the participants today for your contributions, and
everyone else who is here today, for the work that you're doing
on this common cause. I very much hope it is a common cause,
and I believe it is. Thank you.
Dr. McClellan. Senator, thanks very much for your comments,
and especially for your leadership on this important set of
issues.
I'd now like to turn to Jeremy.
JEREMY LAZARUS, MD, PRESIDENT, AMERICAN MEDICAL ASSOCIATION,
WASHINGTON, DC
Dr. Lazarus. Thank you. I'm Dr. Jeremy Lazarus, a board-
certified psychiatrist in private practice in Denver, Colorado,
and President of the AMA.
We appreciate the opportunity to provide our views and to
discuss with other stakeholders the AMA's concerns and
recommendations concerning implementation of the Sunshine Act.
We support efforts to increase transparency. We provided
ongoing input and supported the final version of the Sunshine
Act after important modifications were made to the legislation
designed to ensure that the reporting did not impose a
regulatory and paperwork burden on physicians, protected
physician due process rights, and provided a meaningful picture
of physician-industry interactions.
Our goal is to work with all of you to streamline the
regulatory burden, ensure accurate and fair reporting, and
ensure adequate time to conduct outreach and education on the
final rule to physicians. We're very hopeful that today's
discussion will advance resolution of key questions and areas
of concern that we have with the proposed rule. Thank you.
Dr. McClellan. Thanks very much, Jeremy.
And next up, Liz.
ELIZABETH O'FARRELL, SENIOR VICE PRESIDENT, POLICY AND FINANCE,
ELI LILLY & COMPANY, INDIANAPOLIS, IN
Ms. O'Farrell. Good afternoon. At Lilly, we believe that
physician payment transparency, when done accurately and with
relevant context, is good for all stakeholders. Through
developing our current payment registry, where we disclose all
financial relationships, payments and transfers of value to
physicians, we learned how operationally complex this is. I'm
concerned that the draft regulations, along with an overly-
aggressive implementation timeline, will result in confusing,
inconsistent and inaccurate interpretations of the data.
This is why we're recommending a phased approach which we
believe will enable a high percentage of payments to be
accurately captured in the proposed timeline.
In addition to timing, there are four areas where the
current draft regulations are both operationally unmanageable
for manufacturers and will create confusion for the public.
First, indirect payments should be reportable only when the
manufacturer controls or implements the selection of the
physicians engaged by the third party.
Second, meal allocations must be factual and workable. We
should not attribute value to someone who does not actually
receive a meal.
Third, the exclusion for patient materials should
explicitly encompass all educational items and services
provided to covered recipients for the direct benefit of the
patient.
Lastly, we ask for the definition of ``applicable
manufacturer'' to align with the statutory definition and only
include our subsidiaries who are operating in the United
States.
In 2011, we disclosed $216.5 million on our registry. This
encompassed 1.1 million transactions with 102,000 physicians.
It took us 23 months to design, implement and validate our
registry. To broaden our registry to meet the requirements of
the draft regulations, we estimate it would take a minimum of
180 days, and we're starting from a position of strength and
experience. Many companies are starting disclosure for the
first time.
I really appreciate the opportunity to be here this
afternoon and look forward to the discussion. At Lilly, we
firmly believe that transparency, when done in the right way,
is good for all of us.
Dr. McClellan. Liz, thanks, and I appreciate you summing up
some of your experience as well. We are going to, obviously,
come back to a lot of the issues that you and the other
presenters have brought up in these opening comments.
Right now, though, let me go on to Doug.
DOUGLAS PEDDICORD, PH.D., EXECUTIVE DIRECTOR, ASSOCIATION OF
CLINICAL RESEARCH ORGANIZATIONS (ACRO), WASHINGTON, DC
Mr. Peddicord. Dr. McClellan, thanks very much.
Again, my name is Doug Peddicord, and I serve as Executive
Director of the Association of Clinical Research Organizations,
or ACRO, which represents the world's leading clinical research
organizations, CROs. Our member companies provide a range of
services across the entire spectrum of development for new
drugs, biologics and medical devices, from pre-clinical, proof-
of-concept and first-demand studies, through post-approval and
pharmaco-vigilance research.
With more than 75,000 employees engaged in research
activities around the world, ACRO member companies conduct more
than 11,000 clinical trials involving nearly 2 million research
participants every year. We are involved in half of all
clinical trials that take place worldwide.
Since passage of the Affordable Care Act, we have worked
with industry, CMS and other stakeholders to try to ensure a
regulation that will be fair to doctors and hospitals, useful
to patients and consumers, and not discourage research
participation.
Let me begin by saying that ACRO argued, and we continue to
believe, that fair market payments made for legitimate research
activities should have been excluded from the provisions of
6002. It's worth noting that several states Sunshine statutes
exclude from reporting payments made for such bona fide
research activities.
Our concern is that failing to exempt those payments for
research activities from the requirements will have deleterious
effects on the research enterprise in the United States. A 2010
survey of U.S. physicians who conduct clinical trials,
investigators, showed that 24 percent would be less likely to
participate in research or would not participate at all if the
revenues, the gross revenues, not revenues in excess of
expenses or profits but gross revenues, which is what the
proposed rule will require, were disclosed by HHS.
A major reason for this, we believe, is physician concern
that the data will be highly susceptible to misinterpretation.
Stated differently, the survey finding suggests that the U.S.
is in danger of losing one-quarter of its clinical
investigators, which will slow innovation and delay the
delivery of needed treatments for patients.
I very much look forward to the conversation today.
Dr. McClellan. All right. Thanks very much, Doug.
Chuck.
CHARLES ROSEN, MD, CLINICAL PROFESSOR OF ORTHOPEDIC SURGERY,
UNIVERSITY OF CALIFORNIA, IRVINE SCHOOL OF MEDICINE, ORANGE, CA
Dr. Rosen. Thank you. I'm President and Co-Founder of the
Association for Medical Ethics, and we believe in and supported
the Sunshine Act from the beginning. We believe in the
transparency of people, doctors, reading research papers,
knowing whether the authors had $10,000 for research support or
$1 million in stock options, and believe that patients should
have the right to know about their physicians.
There is no restriction in the Sunshine Act that I know of,
nor in our policy, of how much anybody gets from anybody for
anything, whether it's $10 a day or $1 million a day. This is
purely transparency and openness.
The concerns that I have thus far are about the continuing
medical education exemption, that the idea somehow of industry-
sponsored continuing medical education payments to physicians
via a third party should somehow be exempt I think will gut the
Sunshine Act. To say that this will discourage somehow medical
education in this country having these marketing seminars--and
as Marcia Angell, the previous editor of the New England
Journal of Medicine said, these are for marketing, not
education--will somehow collapse the education system in this
country I think is a little bit silly.
Also, I'm concerned about the pre-FDA research that's done
that exempts any of the authors from having transparency of
their payments under the guise of somehow trade secret, or
somehow it's competitive getting researchers. I think that will
gut a lot of the Sunshine Act if that's allowed.
And just the last point, I have noticed being here that a
lot of questions are being made about how difficult it is to
set up this database and so forth. I can tell you, for the last
five months at AME, with personal funds between me and my co-
founder of AME, Gemma Cunningham, we put in $600,000, hired 18
programmers over the last five months, have downloaded a
searchable database of every transaction between pharmaceutical
and medical device companies to physicians for the past seven
years, including the DPA of the ortho companies from five years
ago, and it's searchable and it's free on our website. It's the
largest in existence.
So I would dispute that this is such a difficult thing to
download and do at CMS, and we certainly don't have the
capabilities that CMS does, and we've done it.
Dr. McClellan. Just for the people who may be going to
their laptops now, the web address for your organization?
Dr. Rosen. Ethicaldoctor.org.
Dr. McClellan. Okay. Thanks very much.
And next up is Jay.
JAMES H. SCULLY, JR., MD, MEDICAL DIRECTOR AND CEO, AMERICAN
PSYCHIATRIC ASSOCIATION, ARLINGTON, VA
Dr. Scully. And last. Thank you, Mark.
As I said, I'm Jay Scully with American Psychiatric. When I
came into my current position, we were already concerned about
these issues and were hearing from our members, particularly
our younger members, that there was a problem in our
relationship and how we primarily dealt with the funding of
education. I expect one of the reasons you invited me here is
that we don't have a disclosure problem because we don't do it
anymore.
So, I'll tell you what happened: we were getting
commendations from the accrediting CME body for the way we
managed the industry-supported programs--highly valued by a lot
of our members. But concerns were raised by the public and by
our members, and the public trust was just too important to us.
So, in 2008, we decided we would phase out any industry
funding for our CME programs, which we did at some cost. Four
years later, it's working pretty well. We have a problem that
we still are working on, which is we want access to the best
experts. Sometimes those best experts are in the pharma labs.
So, we still are working on that. We're working with them, and
we're making progress in that area--particularly with the
university-based folks who get pharma money. I'll talk about
research in a second maybe in more detail.
So, we did the separation. Again, we love marketing. We
love advertising from pharma. We just want to make clear that
it's not education. We live in a market-based economy. That's
how we get the new products and the great advances we've made,
and we need that from our colleagues in the pharmaceutical
industry. We just want to be clear about when it's marketing
and when it's education.
So, it works for us. With the Sunshine Act, though, one of
the things we've done is our own disclosures, which have been
quite extensive--particularly in our guidelines groups who
produce the clinical guidelines. And one of the things we've
learned is that the research dollars and how they're managed in
various institutions is very complicated. Some money may go
directly to the researcher and into their personal funds.
Others go to the university or the organization and are never
seen by the researcher. So how does that get dealt with?
Furthermore, a lot of money is spent on free medicines that
are to be researched and studied. Is that going to be reported
as the doctor's income, the money for those things? This is a
problem we have had with our own disclosure system.
We also, as everybody else does, want to make sure there's
a fair, formal dispute resolution that goes into the rules for
the Sunshine Act so that everybody is clear that these things
are not reported until discrepancies have been dealt with, so
bad data doesn't go up. It gets confusing sometimes, so it
needs to be done, especially around the research dollars.
I'll stop there. We can talk later.
Dr. McClellan. Thanks. And I want to thank everyone for the
conciseness of their opening statements. Again, we are going to
come back to discuss all these issues in more detail.
First, though, let me turn to Niall for some opening
comments from the CMS perspective.
NIALL BRENNAN, DIRECTOR, POLICY AND DATA ANALYSIS GROUP,
CENTERS FOR MEDICARE AND MEDICAID SERVICES, WASHINGTON, DC
Mr. Brennan. Thank you, Mark. I'd like to thank the
senators and their staff for convening this roundtable. CMS is
certainly looking forward to the input of folks here at the
roundtable.
As you know, we published an NPRM for the Sunshine Act on
December 19th, 2011, with a 60-day comment period, which ended
on February 17th, 2012. At the conclusion of the comment
period, we had received over 300 highly substantive and
technical comments from a wide range of stakeholders covering
almost every section of the proposed rule.
We continue to meet extensively with stakeholders. We met
with them both prior to the NPRM and subsequent to the NPRM to
give them an opportunity to amplify their comments to us, and
we like to think that we have been as open and transparent as
possible in that regard.
While there were a lot of comments, some certainly were
commented on more than others: continuing medical education,
the treatment of indirect research payments, the process for
resolving disputes between physicians and manufacturers.
In May of this year we announced that in light of the
extensive comments, and again to try and be as transparent as
possible to folks affected by this provision, that we would not
require data collection by applicable manufacturers or group
purchasing organizations before January 1st of 2013, which
would give us additional time to address the operational and
implementation issues in a thoughtful manner.
We continue to assess the requirements for the program to
ensure that we can accurately and effectively collect and
publish the data, as intended by statute. I think many of the
participants already have alluded to the complexity of a lot of
the underlying issues and the need to get it right before it
becomes a real and tangible program, and that's what we're
focused on.
We're working very hard on finalizing the regulations and
rulemaking around this particular provision. We're in parallel
starting to gear up on implementation and considering the
various systems and programmatic decisions that have to be
taken into account in order to operate this program effectively
and efficiently.
We remain committed to the goals of the statute and look
forward to talking to you all today.
Dr. McClellan. Great. Thanks, Niall, and I think we're all
looking forward to that discussion.
I do want to get into some more of the specifics around the
issues that all the panelists have raised, but maybe I could
start with just, Niall, a follow-up for you. We heard that
everyone here is very interested in moving forward with clarity
about the final rule as soon as possible. It sounds like, from
what you said, you're in the midst of a lot of work based on
the extensive comments that you received. You said there's a
parallel process with both getting the final rule and getting
to some of the systems work that needs to be done.
Anything else you can add at this point, even though you're
in this rulemaking process, on plans and on how those parallel
processes are likely to move forward?
Mr. Brennan. Well, I am relatively limited in what I can
say, Mark, because we are in a rulemaking process. We're
working very hard. We are discussing things extensively with
both our lawyers and OIG as required by the statute, and my
colleague, Shantanu Agrawal, who is the Chief Medical Officer
at the Center for Program Integrity, is also in the audience,
and CPI are starting to gear up on many aspects relating to
implementation.
Dr. McClellan. Okay. Thanks for that. And with that process
coming, I think one of the useful ways to spend some of our
time together today is to make sure we're all up to speed as
much as possible on what some of those key issues are and what
kinds of preparations different stakeholders can do for that
final rule and the systems to implement it that, as you say,
are coming in the not-too-distant future.
There has been, as you heard from a number of the
participants around the table, a good deal of experience with
some kinds of reporting and transparency around payments. There
also were a lot of views and I think informed perspectives on
some of the challenges in both producing these reports and in
their use and interpretation, and I'd like to go through all of
those issues as best we can in the time that we have together
today.
So let me start with the what, what should be reported and
what some of the key issues are there, and I'd like to
particularly focus on the areas that you all emphasized in your
written statements, in your opening comments around reporting
research payments, around reporting CME, and around reporting
meals. Those are not the only things that are covered here, but
they seem to have been a big part of the comment process and
some of the tougher issues in getting to effective
implementation.
So maybe we can start with research and, Doug, let me turn
to you. I appreciate your point in the statement that research
perhaps should be included--research should be excluded.
Research is not going to be excluded under the law. So given
that, any further comments you'd like to elaborate on about how
to get research reporting as effective as possible?
Mr. Peddicord. Sure, Mark, and I think we're obviously
recognizing that research is not likely to be excluded. In our
written statement, one of the things we provided was a chart of
the flow of research payments and data collection related to
those payments, which in some ways very much underlies this
question of direct versus indirect payments and how do we
capture what it is that is being paid for what.
I think one of the things that it is relatively uncommon
for applicable Manufacturer A to write a big check to Doctor B
to perform research services. In fact, it is more often the
case that payments, like NIH grants that flow through research
institutions, are likely to flow through other intermediaries,
including CROs, in the commercial side of the world also. As a
matter of fact, our companies work with something over 500
manufacturers each per year, and so we have a very broad range
of experience with what those payments are going for.
What those payments go for is everything from what I would
call goods, laboratory tests and the like, to services,
physical examinations, to essentially professional and
administrative services like record-keeping and data collection
and data reporting. I think one of the things that the rule
needs to do better than it does in the proposed version is to,
in fact, separate out those categories.
That's what I think the direct and indirect payments idea
is trying for, but I think as written within the proposed rule,
we were left very much concerned with the issue of the
potential for double and triple counting. If what we end up
doing is we count a direct payment made to a physician and an
associated, what would be called indirect, payment made to the
institution, are those amounts the same? Are they different? Do
we get--are we asking for greater levels of granularity than
we, in fact, now have?
So, for instance, lots of times now, a payment gets made to
a physician practice. Two of those physicians might be
investigators in a research project. The other eight of the
physicians in the practice are not. We don't necessarily know
how they divide up their money, and it's not something that we
are likely to need to capture, except if the rule requires us
to capture it.
So I'll stop at the major question of I think direct/
indirect needs to be much clearer, and I will make one
particular plea, which is probably as much to the industry as
to CMS, which is that this is an area that cries out for a
great deal of standardization. The notion that every
manufacturer is developing a different system for capturing a
relatively small number of data elements is really problematic,
and I think it will be really problematic for CMS as well
because if it can't get standard data elements in, it's unclear
to me how it will create a database that really will be useful
and informative for patients and consumers.
Dr. McClellan. I want to pick up on that point about
informative for the public. That is, obviously, the bottom-line
goal of the legislation. And while, as you pointed out, many of
the financial flows here are complex, there are not that many
categories, and standards could be helpful in making it
interpretable to the public.
Standards development is something that happens in a lot of
areas. You don't necessarily have to wait for the government to
do it for you. Industry, other stakeholders working together,
can often make progress on this.
Jay, you all have a lot of experience with thinking about
these research issues, and I know you commented extensively on
it in your written comments. In terms of making this
information as useful as possible to the public, any thoughts
about what standardization might involve and how to get there?
Do we really need entirely to wait on CMS to get the rule out?
Dr. Scully. No. I think it would be great if industry--and
here primarily it's universities and some institutes that are
not university-based, but primarily universities-reports, but
in what categories? If I get a $9 million grant from Acme
Pharmaceuticals to do a study, do I buy a condo in the
Caribbean, or is this for research associates? Is this for the
medications that we're studying, and I don't get anything into
my personal accounts?
Still, the public may need to know I'm doing research for
Acme Pharmaceuticals. That's fine. But it needs to be done in a
way that's useable information for people.
What we've discovered, because in addition to the CME
business, in our guidelines world--and I think a lot of
professional societies are doing this--we have divestiture. You
can't be running our guidelines on the treatment of depression
if you're getting a lot of money from a drug company, even
though you may be the world expert. So we struggled with that.
Clearly, disclosure is important, but we're saying there
are some limits, you know, and you really can't have any money.
If our guidelines are used--Acme Drugs, for the treatment of
this--are used with this particular drug, that needs to be
pretty clearly pristine. We're very clear about that.
So if you're a researcher, can you do it? We think so, as
long as you're not individually--as long as we can disclose
that, that you have been doing research for this in your
university and it's dealt with in a particular way and you're
not getting personal money.
But if you are, so what is personal money and how is that
dealt with? Is your salary dependent upon it? If you're
bringing in so many dollars to the university, they'll raise
your salary? Lots of complicated things need to be worked out
before somebody is tagged with ``Dr. Scully gets a million
dollars from Acme Drugs.''
Dr. McClellan. Let me ask Dan, since you all have thought
about this a lot as well. Any further thoughts given the
comments you've heard about reporting on research, how to make
that as useful as possible to the public without being unduly
burdensome or have the kind of adverse effects on the conduct
of research that Doug and others have articulated?
Dr. Carlat. So we have to realize, of course, that there
are two great truths as far as these research payments go. One
is that research is really the life blood of medical progress
and nurtures medical care. So all these research payments are
good and we need to maintain them, and we certainly need to
develop a system in which we're not going to over-inflate the
payments that physicians are receiving, as you said.
On the other hand, and this speaks to the heart of the
Sunshine Act, when a physician does take payments from a drug
company, that does set up a potential conflict of interest.
My own personal experience, having run clinical trials--and
this is a situation somewhat different from what you were
saying, Jay--working for a CRO. A CRO got a grant. A CRO hired
me, and probably other doctors, within a private practice
setting. So I would recruit patients for an anti-depressant
trial as part of my private practice. I would receive an
enrollment fee of $5,000 per patient that I enrolled in the
trial.
So here you have a potential conflict of interest where, on
the one hand, as a physician, I'm there for my patient to
provide the best possible care. On the other hand, I'm getting
paid a fair amount of money to enroll them in the trial. So
from the perspective of the consumer, from the perspective of
the patient, deciding to be in a clinical trial is complicated
enough because there are risks involved, right? And certainly
one of the things that we want to disclose to them is that, in
cases where there are financial incentives, that those
financial incentives are in place so they can have that
information. They do deserve that information, in addition to
all the other information that they get about the research
trial.
Dr. Scully. You're trying to convince the patient to enroll
in the trial, you need to let them know you're making money
when they go in the trial. That's an ethical issue between you
and the patient, as well as the public at large.
Dr. McClellan. It sounds like some opportunities for really
promoting transparency here, and I'm glad there's some common
ground.
I do want to move on, though, because we have so much to
cover. So let me turn to continuing medical education, also
very important for effective medical care. I know there has
been some important discussion and maybe some differences of
opinion around what and how should be reported on CME.
Jeremy, you talked about this at some length and
highlighted in your statement a range of ethical guidance that
AMA and other professional organizations have in place to help
assure appropriateness of CME. Given all of that, what should
be exempt from reporting in terms of CME?
Dr. Lazarus. Thanks, Mark. Well, I think what should be
exempt is what's written in the statute and the ACA, and that
is that certified CME--I think we need to clarify the
difference between certified CME, in which there are already
significant firewalls between the granting organization,
whether it's pharma or the device manufacturer and whoever is
providing the CME, and the recipients of that CME, as opposed
to more promotional or marketing kinds of activities.
And we already have very extensive ethical guidelines from
the AMA, from the Council on Ethical and Judicial Affairs, on
how physicians should take a look at their relationships with
industry. But we think if you exempt the certified CME, that
would be the best way to go. And again, that is what is written
in the statute. So that's what we would propose.
Dr. McClellan. And, Chuck, I know you care deeply about
these issues as well. Your thoughts on the same topic of what
should and shouldn't be reported in terms of CME?
Dr. Rosen. I'm not sure of the reasons for exempting
certified CMEs since they are industry-funded CMEs as well. The
ACCME for some reason allows industry-funded CMEs to be
certified, and there are non-certified CMEs that are industry
funded. So just to say they're certified, I don't think that's
reasonable either, because they are going to be industry
funded. In fact, I think the ACCME should not be funding,
should not be certifying industry-funded CMEs, because they are
marketing.
Dr. Lazarus. Mark, could I just respond a bit? I think it's
important to recognize that the certified CME, the
pharmaceutical or device manufacturers, have no impact in terms
of who is chosen as speakers, they have no impact on the
content of the presentations, they don't give PowerPoint
slides. And indeed, it may be that the recipients of that
education might not know who is doing the funding. So it is
quite a different kind of continuing medical education than
more promotional activities.
Dr. McClellan. I appreciate the back and forth, but given
how much we have to cover, I do want to move on. I'm going to
turn over the questioning just for a moment to Senator
Blumenthal.
I understand you have a specific question that you'd like
to ask.
Senator Blumenthal. I really appreciate that, and I
apologize if I'm repeating something that has already been
discussed.
But I'd like to ask Director Brennan whether you can state
specifically or reaffirm what the timeline will be. There was a
delay, obviously, from 2012 to 2013 for beginning data
collection. But I wonder if you could just lay out for the
record now so that we know with certainty what the timeline
will be for each of the stages, 2013 January for data
collection, 2014 for posting anything else that you think ought
to be clarified here?
Mr. Brennan. Thank you, Senator. That's a somewhat
challenging question for me to answer because we're still in
the clearance process, and even if you look at the comments
from folks like Elizabeth today regarding the length of time
that industry would like between publication of a final rule
and actual collection of data, some folks feel that 180 days is
appropriate, some folks feel that 90 days is appropriate, some
folks feel that 120 days is appropriate.
Certainly, we do hope to get the final rule out as soon as
possible. We do hope to build in an appropriate period of time
for manufacturers and covered recipients to get ready to
collect the data and be reported on, and we certainly hope that
some of that data collection would occur in 2013.
Senator Blumenthal. You hope that some of it will occur in
2013? Maybe you could just repeat that. You hope that it will
occur in 2013?
Mr. Brennan. I hope that some of the data collection will
occur in 2013, yes.
Senator Blumenthal. Okay. You know, I don't mean to be too
preemptory about this issue because I'm not the author of the
bill, and Senator Kohl I think has left. But Congress mandated
some dates here, and we very much welcome hopes, but I think
that some finality and certainty and commitment is to be
expected. I don't want to put you on the spot now, but I'm
going to ask for the record that you come back to us with a
commitment to a date certain as soon as possible. That's just
my request. I think it's a legitimate and understandable
request.
I know that there are complexities and difficulties, but
there is more than just a hope on the part of Congress. There
was a deadline that was set.
Mr. Brennan. Thank you.
Dr. McClellan. Thank you, Senator. And Chairman Kohl and
Senator Grassley I think also made the same point very clearly.
Senator Blumenthal. Well, again, I apologize if I came in
late.
Dr. McClellan. No. Look, it's a very important issue that
everybody around the table agrees. The sooner this can be done
and done right, the better. There are some days when I really
miss being CMS administrator, and there are some times and some
questions when I don't.
[Laughter.]
Senator Blumenthal. And a lot of days when you don't miss
it, right?
[Laughter.]
Dr. McClellan. But I appreciate Niall committing to get
back to you with as much clarity as he can as soon as possible
on this set of issues.
Senator Blumenthal. Thank you.
Dr. McClellan. Thank you.
In the meantime, I do want to try to make sure that we're
getting up to speed as much as possible on what these key
issues that you're working through are. One other key area of
reporting that has generated an awful lot of comments and some
of the favorite anecdotes about who gets charged for the bagels
and so forth is the reporting on meals and the methods
included.
Liz, you've got some experience with this from the work
that you all have been doing in your reporting already. Any
thoughts that you can give on how to do this right? It is a
significant--maybe it's not the biggest part, but it is a
significant part of financial arrangements.
Ms. O'Farrell. And I'll talk a little bit about how we've
done it and what some of my concerns are with the proposed
methodology now.
We currently attribute the value of a meal consumed by a
physician on our registry. So, for example, if we bring in $100
worth of food and 10 people are eating, and 2 of those are
physicians, we will allocate $10 to each of them.
Now, just that from a technology and systems perspective,
and communication and training, to get to that point with our
registry took changes to our expense reporting system, training
to our sales reps, and also training--we made sure that every
physician understood for our data collection date that we were
going to be attributing value to anything that was received
after that point. Also for speaker programs, if they attend a
meal, we obviously allocate that.
Where we get very concerned with the draft regulations is
to think about allocating that--go back to that $100 again--not
the whole $100 to the physicians who have an ownership interest
in that practice, or to try to attribute that at speaker
programs.
Why is that so complicated? Well, first of all, when we go
into an office, we don't necessarily know who all of the
physician owners are, and even if the sales rep knows that, our
systems and technology don't know that. So we're concerned
about being able to accurately do that.
Second of all, if you are a physician who has said I'd like
to listen to what you have to say but I'm not going to take any
food from you, we have lost the opportunity to even have a
discussion if we're bringing food for anyone because we no
longer can have a physician actually opt out of receiving
anything of value from us.
And I think thirdly, one of our biggest concerns is that in
some bigger practices, there may actually be a physician that
we don't call on because we don't have a product or an
indication for that physician, and the last thing we want to do
is attribute value to that physician on our registry when not
only did they not eat the meal but they are actually somebody
we shouldn't call on.
I think within this--and as I said, we've been doing this
for a while--we have a dispute process.
I think the other thing you have to look at is the
downstream implications of adding complexity. If you are
attributing to a physician a meal that that physician ate, and
they understand in advance that that's attributable, you really
don't have much of a dispute if you do that correctly. When you
broaden that to attributing a much larger amount than what they
know they actually consumed, you're going to increase the
disputes.
And when you go to the extreme of attributing expense to
someone who didn't even see you and didn't take the food, we're
going to see so many more disputes that are going to be very
hard to reconcile.
So those are the major issues. We continue to look at the
simpler you can have it, the better your accuracy is going to
be, the more understandable it's going to be.
Dr. McClellan. I did hear or see some head-nodding around
the table with that. Dan, you all have thought about these
issues as well, and there are some issues here, questions of
balance about getting accuracy and completeness versus fairness
and burden.
Dr. Carlat. Speaking as someone who used to go into some of
the offices giving talks--I would come with the reps who would
provide the platters of sandwiches and what-not--it seemed to
me that it was a relatively simple matter, and maybe there are
elements in place that make it more difficult than common sense
would dictate. But it seemed to me a relatively straightforward
matter for the drug rep to see which physicians were actually
eating a sandwich or a bagel, to put that in their information-
keeping system, and then to attribute that amount of expense.
Similarly, when I go to meetings these days, everybody has
a badge and a bar code, practically on their forehead these
days, but they have it on the badge. So as they walk in to pick
up their box lunch, they're being scanned. It seems that the
technology is pretty straightforward to make sure, again, that
the reporting of meals is accurate and not over-reported.
Ms. O'Farrell. I would say I agree with you on what you
said. It is--if we know who has eaten and we can attribute the
meal to that, that's what we do today. We had to make changes
to our system to enable us within the expense reporting system
to ensure that we were picking up the right physicians, because
from knowing who the physician is to actually knowing that you
got the right one in the system, there's a lot of validation
and work behind that. But you're right, that is more
straightforward.
Where it becomes less straightforward is in the
interpretation in the draft regulations which would say it's
not just about attributing it to the physicians that I see
right now, but now I have to attribute it to whatever
physicians happen to have an ownership interest in that
practice whether I saw them or not, and even knowing who those
ownership interests are is very problematic.
Dr. McClellan. Jeremy, a quick comment on this, and Doug,
and then I want to move on from what gets reported to some
other issues.
Dr. Lazarus. I'm basically in agreement with what's been
said. I think physicians should be ``billed'' for what they eat
and not for what they don't eat. So if they're not actually
getting that meal or that bagel, it shouldn't be attributed to
them. It should be the direct meal that they got, not more than
that.
Dr. McClellan. Okay. And Doug?
Mr. Peddicord. So just a quick comment, since the notion of
common sense came up before.
[Laughter.]
Dr. McClellan. We like common sense.
[Laughter.]
Mr. Peddicord. At the risk of saying the obvious--I'm not
sure that the real point of Sunshine, actually, is to employ
lawyers and consultants and financial managers so that we end
up with this level of silliness around there should be a no-
bagel table and a bagel table. We actually think that, at least
in the research sphere, if we bring together 10 physicians for
a study initiation meeting, and we keep them in a room to train
them on the study from 9:00 to 3:00 and we feed them, we think
the meal is entirely incidental to the research and simply
should be reported under research and should not be segregated
out.
I think this idea of segregating out, especially at the
level of $5 and $10, is part of what then gets us to this
notion of physicians disputing at the end of the year ``I
really couldn't possibly have eaten that many meals from
applicable Manufacturer A.''
I think there is a need for some sort of common sense here.
I know meals are a real issue, but I also don't want to make
them the focus of the regulation. I think patients care about
what financial relationships are and if there is a conflict, as
opposed to if people are being incidentally fed during a time
where they are providing a service.
Dr. McClellan. All right. That's actually a good transition
to what I want to talk about next. There have been some great
comments on what gets reported, some very useful perspectives
on that and how to move forward. Next is how it gets reported.
So as Doug was just emphasizing in his comments, what really
matters here is the public getting an accurate understanding of
what's going on with these financial supports.
A key part of that is presentation. The law and CMS'
proposed regulation envisions a website that's easily
searchable. Fortunately, as in some of the other issues we've
discussed, this is not something where we need to start from
zero. We've got some good experience and some examples already.
So, Chuck, let me turn back to you to start off this
discussion, since you've already been involved in trying to
compile some of this information in a useable way for the
public. What is most important in getting this right? What are
the things that should be part of this website, and are there
ways to get going on moving towards implementing that now, even
as we're waiting for the final regulation?
Dr. Rosen. I thoroughly agree that the reporting should be
accurate, whatever system is worked out, and it accurately
reflect whatever compensation the physician has gotten,
whatever form or not. I encourage and believe in that. Nobody
really cares about bagels, frankly. I mean, that's not the
whole thing. It's often trivialized and jokes are made about it
to sort of denigrate the Sunshine Act, it's all about bagels
and cream cheese and eggs in the morning.
Well, it's not. I guess that's gotten caught up in it, but
nobody really cares if you ate $300 worth of bagels last year.
Dr. McClellan. So when you're designing this website and
presenting this information, what would you really want to----
Dr. Rosen. Well, all we did was take the data as it's
listed by the companies under their categories and did not
change anything and put it in. That's all we did, and we
developed programs to access it every two weeks to update it,
automatic programs. So we didn't change it. As far as the
details on how to break it out and how to list it out, I'll
leave that up to the decision-makers, what's going to be listed
and how you're going to be listed.
I think accurately it should list just what the physician
gets. I think that what the physician gets personally should be
listed because we're talking about people writing papers and
research that affect the entire country and all patients and a
very public stance, and you have no right to say, well, that's
public, but I can't tell you about the financial stuff, that's
private. You can't have one side public on the other side, and
I don't know why it's a problem reporting a big salary from a
company. I'd be glad to report a large salary from any
companies out there. I don't right now, but if----
Dr. McClellan. Duly noted. But in all seriousness, I
appreciate the emphasis that you're putting on getting the most
important information out and making that clear. Again, a
number of the companies here have some experience in doing
that. Maybe, Diane, you talked before about how devices are
different in some ways. Devices do involve a lot of back-and-
forth interaction in their development and further innovation
with the practicing physicians, and there are a lot of
financial arrangements tied up in that. Your thoughts on how to
make this public reporting as clear and useful as possible?
Ms. Biagianti. When you first asked that question, Dr.
McClellan, my first thought was the challenges that we had
faced in our voluntary disclosure program and some of the
challenges I perceive that CMS will have as well in aggregating
the data. I understand from Ms. O'Farrell that Lilly has had
the same issues, and that is how do you identify, uniquely
identify the health care practitioner or the physician, and
that is something that we struggle with as an industry. There
is no unique identifier for each physician. You can use the
NPI. There's not necessarily one for all physicians. You can
use their state licensing number, but they may have multiple
state licensing numbers. So how do you aggregate the data so
that you are accurately and completely reporting the data?
From CMS' perspective, how are they going to aggregate data
from multiple manufacturers who may be reporting a different
identifier, NPI, state license number? How do we make sure that
happens?
So our suggestion has been it would be very helpful to have
a unique identifier from CMS for industry to use to ensure that
we are capturing accurately the data associated with an
individual physician, as well as CMS can aggregate that data
appropriately, and patients have access to that information. So
that was one immediate reaction I had to your question.
In terms of the data and what would be helpful to patients
on the CMS website, definitely searchability is going to be
very helpful. It doesn't help to show what Lilly has paid, what
Edwards has paid. What they want to see is searchability by a
doctor's name. So that's critical and, again, goes to
aggregation.
And also the ability to add context around those
transactions. If our whole purpose is to provide clarity to the
public and to patients around what those collaborations look
like, it is not going to be helpful if we're just providing
numbers. We have to explain the context around those
collaborations so that there's an understanding of what that
means.
Dr. McClellan. And is there a straightforward way to do
that based on your experience?
Ms. Biagianti. Based on our experience, we have not gone
transaction by transaction because our voluntary payment
program is not transaction by transaction. So I don't have a
clear answer, but context around an individual transaction is
probably going to be helpful.
Dr. McClellan. Okay. Liz, you all have a website that
provides information on transfers of value and the specific
dollar amounts and has some of this kind of categorization and
context built in. Your thoughts about how to do this right?
Ms. O'Farrell. I think for us the most important--and we
spent, I'm not going to say as much time on the context on our
website as we did on tracking the data, because we spent a lot
of time getting the data reported. But we did put a lot of time
and effort into the context of our website. We wanted to really
make sure that a reader of the data would have the ability to
really understand why we work with different health care
professionals, the context of our work there.
For example, for research, we do disclose all of our
payments, including research, and we disclose both the entity
paid and the principal investigator. That shows that, first of
all, the check, the actual payment, for the most part went to
an institution, not a person; and then we have a lot of words,
context around what does it mean to be a principal
investigator. What does that mean? What does this number mean
relative to what that person may or may not have received? Even
indicating that sometimes that person may have received
nothing, the physician, because they're an employee of the
institute. And that, I think, has been very well received by
the research. We have that kind of context with everything. We
actually have a video of our chief medical officer in the U.S.
talking about the work that we do.
We also have evolved with our current registry to being
very downloadable and searchable. We feel like if our
information is going to be out there, we want people to be able
to get everything out of it that they can. So we offer multiple
ways to search, to look up different transactions, or we
aggregate. We don't have it at the transaction level, but in
the different buckets.
I think the last is we really do look at the categories. We
spend a lot of time on what are the categories. So we agree,
research is research, and if you're going to disclose--if
you're going to be paying for meals while you have somebody who
is in a start-up meeting or something, that that is all really
research, and we have also a lot of context on our website
about what that means and why.
So I can't highlight enough how important it is to spend
the time to put that context, because just looking at the
numbers can be very misleading. I also think that it's
important to understand that people need to be able to search
and download and really look at this data. I think that this is
also a key for CMS, then, to make sure that you are providing a
lot of clear guidance on what a bucket is, what's in research,
what's in meals, what's in speaker programs, because if you
want it to be able to be aggregated across the different
manufacturers, it's really important that we've got good
definitions bucket by bucket, not dictionary definitions but
real-life definitions, so we all know that we're submitting
things the right way to you so you can aggregate.
Dr. McClellan. And, Niall, again, I know you're limited in
what you can say, but any thoughts from CMS about what should
go into the website and what should go into providing context
for people who are using it?
Mr. Brennan. Well, we're very aware of the need to present
context with these numbers. We certainly intend to conduct
extensive outreach and education to make sure the information
is presented in the appropriate way. Also, I think CMS has a
fair amount of experience in this area of presenting complex
information via web tools such as Hospital Compare, the Plan
Finder tools, and obviously the upcoming exchange
implementation. So CMS has invested a lot in translating
complex issues to consumer and patient audiences over the
years, and we'd certainly hope to leverage that going forward
as we present the information on a website.
Dr. McClellan. Thanks. Let me ask anybody else here--this
is a very important topic, context and how the information is
presented. So I just want to make sure I don't miss any
important ideas, but please do keep it brief.
Dr. Lazarus. Just a couple of comments, Mark. First, I
think it's incredibly important from our point of view that for
the individual physician, that there should be direct payments.
Those are the things that we think the public wants to know
about, the direct payments, and not to go beyond the statute.
The context is important. I think the context for us is
also that we would have an opportunity to also have a place on
the website to comment on our view of what was reported.
And in addition to that, we didn't get into the dispute
resolution part of it, and hopefully if the issue of more
direct payments is taken care of, there will be less disputes.
But if there are disputes, there should be an opportunity for
the physician to have an opportunity to say that on the
website.
The last part of it is that we talked a lot about research.
We would suggest that you consider a separate section of the
public website that only is about research, and that might
separate out some of these issues, make it more clear.
Dr. McClellan. So distinguishing that from CME?
Dr. Lazarus. Yes, not a non-certified CME.
Dr. McClellan. Right.
Dr. Lazarus. So that it's clear that there are different
buckets, and the public would be more clear about whether it's
research, promotional marketing, and we hope certified CME
doesn't make it into it.
Dr. McClellan. You did make that clear.
Jay, and then Chuck.
Dr. Scully. I just wanted to follow along that we think
that the dispute resolution business needs to be settled before
the numbers are put on the website, rather than have that go on
when misinformation is----
Dr. McClellan. Although some disputes may take some time to
settle.
Chuck.
Dr. Rosen. The spirit of the Sunshine Act, I believe, is
that money for what physicians do that goes to them be
reported. Because it stops at some intermediary and is sort of
laundered a little bit doesn't mean it can't be reported. So I
think if the CMEs are excluded, tens of millions of dollars are
now going to go through CMEs to physicians and avoid the
reporting requirements of the Sunshine Act.
Also, certified CMEs--I mean, let's be realistic. This is
where speakers that are paid by companies will talk about off-
label uses of products. No emails will be sent. There will be
no documentation. That's kind of the part of it in a lot of
these, and to say that they're all sort of pure and they're
certified and there's a firewall, that really just is not
realistically, in my opinion, what happens. It's kind of a
wink-wink, nod-nod, we'll have a CME down in the Caribbean.
Dr. McClellan. I appreciate the perspective on this. It
seems like there are a number of areas where there is
substantial agreement. This may be one, for handling certified
CME, where there just isn't, and that's another reason why
Niall's got a tough job.
Dan.
Dr. Carlat. Just a quick point of agreement. I had some
time with Eli Lilly's website, which is an excellent site. Pew
has commissioned surveys of consumers. Consumer Reports has
published surveys. There have been some peer-reviewed surveys
published in 2012 in a couple of peer-reviewed journals.
Overwhelmingly, what we see in these surveys is that the main
concern that consumers have with these payments is the
marketing payments. So, for example, 72 percent of the Consumer
Reports survey respondents said that they were very
uncomfortable with doctors giving promotional talks,
particularly when they were giving promotional talks for a
company whose drug they were prescribing.
So I would say that, again, I would agree with a lot of
what's been said here, that the buckets need to be very clear.
Dr. McClellan. And it is nice to know that there is at
least some experience that can be drawn on to get at least the
most important buckets off to a good start in this program.
I do want to turn, in the time that we have left, to
another set of issues, and that's implementation. So we talked
some about what. We talked some about how. But carrying out the
implementation of this website and this ability to obtain
transparent information about financial arrangements has a
whole set of issues in itself. We've talked about some of them
already. There are issues related to standards, what gets
reported how, given the complexities of some of these
arrangements. We've talked about data systems. Niall even noted
that this is a parallel effort, in addition to just working out
the details of the final regulation.
A third issue that some of you have already emphasized is
education and outreach to the physicians involved, to the
people who need to do the reporting, and to the public that's
going to be using these tools.
So I'd like to spend a lot of our remaining time on these
very important implementation issues, and we can stipulate at
the beginning that for the implementation questions that I know
many of you are most interested in--what's the date of the
final regulation and what's the date of data collection--I
think we're not going to get those exact dates today. It sounds
like it is going to be in the not-too-distant future.
With that said, it seems like there's a lot that can be
done now to help make sure that we're as prepared as possible
to enable this to go smoothly. With that in mind, I would
appreciate some comments from you all who have already made
some investments in getting ready for Sunshine implementation
to talk about what can be done now and what are still important
unanswered questions given the proposed rule and the
uncertainty that exists.
I'm not sure who the best person is to start with on this.
Maybe I'll go back to Liz and Diane since you all have some
direct experience with these kinds of systems.
Ms. O'Farrell. Thank you. As I said, and we actually
brought a couple of visuals as well, we started our CIA
implementation of our registry, which encompasses all payments
and transfers of value, and it took about 23 months to get from
the point of really starting, understanding what the
requirements were going to be, understanding our business
processes, making the appropriate changes both to business
processes, communication, training, and to the approximately 30
source systems that we have that feed all this.
We also had the luxury of already having the Sunshine Act
to look at. So as we went through that process, we tried very
hard to mirror or to make sure we were accommodating what we
thought the interpretation of the Sunshine Act would be, and
really felt that after this work we would be pretty much ready
for Sunshine, with a few exceptions that we knew. TOV from CROs
we knew we didn't get that in and we'd have to work on that.
So when the draft regulations came out, we were really
surprised by the difference between where we were and a lot of
those that I talked about in my opening statement.
So a lot of the timelines from the implementation
standpoint for companies will go back to how complex the rule
is, how broad the transactions that we have to cover are. We
believe that an implementation timeline similar to what we've
gone under with our voluntary first disclosure and then CIA,
which is really starting with payments that are much more
direct, that we have control of internally in our system--we
still may have to make some system modifications, but that you
can actually control and get out there, that most companies
should be able to do that within a maximum of 180 days, and in
Lilly's case that would provide about 70 percent of the
transactions. It's not going to get the bagels, but I agree
with you. I'm sorry, I mean 70 percent of the value. On our
registry, less than 5 percent of our $216 million is meals, but
that's about half our transactions. So the cost/benefit there
is pretty off balance.
Then we believe that you could give people time, then, to
start looking at some of the more difficult implementation
challenges, including CROs. As Dr. Scully said, we have learned
that it is very challenging to work with CROs and get the data.
I do think we're going to have an opportunity as an industry to
standardize some of that, versus companies under CIAs going one
off. But we have some CROs that it took a year of renegotiating
the contracts and getting that data in from them. Just as in
any other industry, there are more sophisticated CROs and less
sophisticated CROs.
And then going to a third phase, if it's still necessary to
capture the transfer of value of the meal, attributions, et
cetera, putting that in the third phase. For us, that's only
about 8 percent in total reimbursed expenses, plus the meals.
So that can always be up for debate, but right now I think it
is required.
But we believe that if you can phase something like this
in, you can get a lot of the value early on, allow CMS to get
what would actually be fewer transactions with that value, to
implement that into their website, and then see how the dispute
resolution process works, et cetera, and then move to
increasing types of transactions.
Dr. McClellan. Thanks. And next, Diane, tell me about how
this fits with your experience, this kind of phased approach.
Ms. Biagianti. Yes. So I would echo some of Liz's comments
in terms of implementation. You know, we started voluntary
disclosure four years ago. So we got a little bit of a jump on
the rest of the industry; in fact, quite a bit of a jump. And
that's really worthwhile noting. For a company like Edwards
that has done this voluntarily, we have learned from that
experience. We have gone through iterations on our systems and
processes. For someone who has been subject to a CIA, there has
definitely been a lot of work done, a lot of time to develop
those systems.
For the medical device industry, we are very unique in our
size. We are not pharma. We have very, very small medical
device companies. Edwards is probably one of the bigger ones
with respect to that. So it's going to take companies a
different amount of time based on that diversity of the
population in the device industry.
Again, we started quite a while ago, so we learned from
that.
Dr. McClellan. Is that sort of phased by company size, as
opposed to type of activity?
Ms. Biagianti. Actually, what I'm suggesting is that
companies are going to need time to get started. So for us, we
have learned companies are going to have to go through this
painful process of how to do it, and for smaller companies it's
going to be very painful. So as the med device and pharma has
suggested, at least 180 days is what we really think is
appropriate for the industry in general.
In terms of Edwards, even though we had gone through
voluntary disclosure, once the proposed regs came out, we sat
down and we looked at what those requirements would mean to
Edwards, and it involved a significant amount of system
processes development, training, and it took us at least six
months to get there.
Dr. McClellan. And you have some of those details in your
written statement, which I appreciate.
Ms. Biagianti. Yes.
Dr. McClellan. Dan, you all have--in your statement you
reviewed some of the published work in this area, some of the
surveys that Deloitte and others have done about readiness for
implementation. So we'd appreciate your comments about the
implementation challenges.
We ended up focusing a lot on timeline, and specifically on
time to data submission, but I want to emphasize that while
that's really critical, I do want this discussion to be broader
than that. To the extent you can get to other issues like
education and outreach about using the data, I'd like to make
sure we talk about that, too; and I'm going to get to everybody
else as well.
Dr. Carlat. Thank you. As we've looked closely at the
existing transparency regulations, I think we've learned three
points that are important to this discussion.
The first one is that consumers are not ignoring this
information when it's out there. So, for example, ProPublica,
which is a journalism website, aggregated data from 12
companies and put it on a website. These are large companies,
accounting for 40 percent of all drug sales in the U.S. And
they started that site in 2010, and they've had 5 million hits
on that site in over two years. Consumers want the data.
The second thing is that we've learned that these programs,
even though there's been concern, these programs really are not
harming the industry, they're not harming research. For
example, in Minnesota, which is the state that has the longest-
running transparency provision, 1993, Minnesota has developed a
very thriving medical device industry, as you know. My own home
state of Massachusetts passed a gift ban and a disclosure law
in 2008, and again there were concerns that the biotech field
would flee the state, alarmist editorials and what-not. And as
it turned out, just the opposite has occurred. So we've had
four or more companies--Novartis, AstraZeneca, Biogen, another
that escapes my mind--that have made very large investments in
the state after that happened.
And then finally, I think it's important when we start
talking about phasing things in, which worries us a lot about
delaying this even further, these regulations are not carved in
stone. So take the example of, say, Vermont. Vermont has had,
since 2008 or 2009, a disclosure law and regulation in effect.
After they released their regulations, the Attorney General's
Office had conference calls and a lot of communication with
stakeholders, and as they had that communication, they got
feedback from stakeholders, and they altered their guidance
accordingly in order to make sure that things weren't
excessively burdensome or just that things were fine-tuned.
So I think that we have to keep that in mind as well before
we talk about delaying the release of these regulations
further.
Dr. McClellan. I think I'll just pick up on that, Niall, in
a question for you. I'm not sure it's the usual way, but a very
common way for CMS to proceed with regulations in complex areas
like this one is you do the proposed rule, you get all the
comments back, maybe even more than you expected, and it takes
longer than you expected, you do the final rule, and then there
are still a lot of things that need to be clarified that people
may not fully understand, and that does usually respond well to
some kind of process. CMS has done open-door forums. They have
sometimes held mini-conferences or workshops around
implementation. There might be some regulatory guidance written
or other kinds of questions and answers.
Is that in the cards in this case? Any planning at CMS for
what happens after the final regulation is out to resolve what
will probably be some further questions and need for
clarification?
Mr. Brennan. So again, I can't really get into specifics,
but I don't see why we would approach sub-regulatory guidance
around this particular provision differently than we've done it
for many, many other activities. We recognize the complexity.
We recognize the sizeable lift it will be for applicable
manufacturers and covered recipients in the first year, and we
do want to work to make it as painless a process as possible.
Dr. McClellan. Let me go back now to get maybe some
physician perspectives on this. Again, a big part of
implementation success is going to be physicians being aware of
what's coming, why, and why the choices that were made in this
regulatory process were made.
Jeremy, your thoughts about how to make that education
outreach process work as well as possible? I know the way to
make it work easiest is if CMS follows your recommendations.
But beyond that, regardless of what happens, there is a lot, or
at least some things, that physicians are going to need to know
about what's coming, and where are we on informing them?
Dr. Lazarus. Right. Well, we did have CMS come in and meet
with a group of our states and specialties, which was very
helpful. We still are waiting for the final rule, obviously. Of
course, if CMS listens to us, that would make it a lot easier.
If it's simpler, the better. Less complex is better. But once
it's done, we think it will take us about six months to try to
educate the physician population about what's going on. We'll
put something up on the website. We'll put it out on our
communications vehicles across the country. But I think it's
going to take some time to get the information out.
But rather than put it out in a half-baked way, which is
going to make things very confusing for physicians, we want to
see the final rule so we can tell them what they're up against,
what they do need to keep track of, and what they don't.
Dr. McClellan. And, Doug from the standpoint of individuals
or health professionals participating in leading research
efforts, education plans for them?
Mr. Peddicord. Let me make just a comment or two, and then
try to touch the education piece.
Dr. McClellan. Okay.
Mr. Peddicord. One is that I want to be strongly supportive
of the notion of research as a clearly delineated bucket and in
some ways separately reported with its own context.
The other is just to comment that CROs are increasingly the
project management infrastructure for the enterprise. So on the
other side of Liz and Diane's companies are companies in the
middle. So Diane talked about a year's worth of time to
renegotiate contracts with CROs and looking at her 30 source
systems for where she's going to get the data. So it will now
be the company in the middle that's dealing with Lilly and 499
other manufacturers, which is what gets me back to my issue
around levels of standardization; because again, I think it's
going to be impossible for CMS to construct a meaningful
database if it has discordant data elements coming in.
So with that said, I think what's happening at the level of
physicians, I think one of the things that certainly a number
of CROs, that are very much involved in physician recruitment,
are doing is educating around reporting and the notion that
dollars will be reported. I don't think people care--I don't
think people really do worry about the notion that dollars are
reported. What they worry about is dollars that they haven't
seen being reported as attributed to them. That's a different
issue.
So I think we're in the process of educating new
physicians, and what I think we're trying to deal with is those
concerns that come up out of that survey. We shouldn't really
lose--25 percent of current investigators should not say, gee,
I would be less likely to be engaged in research if revenues
are going to be reported. I mean, we really can't tolerate that
because that's a lot of investigators to lose.
So I think that leaves us and the manufacturers in need of
educating physicians, along with physician societies and the
like, because we really can't afford that.
Dr. McClellan. And beyond CMS, I know following your
comments and finalizing the rule, are there some steps, further
steps that CMS can take, that you all can take, that others can
take to handle these education issues which we know will be
coming?
Mr. Peddicord. Well, I think certainly within the rule
itself, I think CMS needs to provide levels of guidance that
are actually intended for the physician population. So
physicians have certain questions around are these revenues
going to be reported to the Internal Revenue Service? Does this
begin to show up on my tax return? I mean, physicians ask lots
of questions. So I think within the rule, the discussion
section and the guidance around that, and the FAQs that CMS
puts out, because ultimately those disputes are going to go to
manufacturers and to CMS, both. So I think a really good FAQ
section is going to be very much needed.
Dr. McClellan. And as I think Dan emphasized, since this is
probably going to be an iterative process even if CMS tries
their best to get those FAQs done right in the regulation, it
seems likely that some things are going to be missed, some
further clarifications are needed, and it seems like everyone
is willing to engage in a collaboration through further work on
FAQs, through some regulatory guidance, or at least through
giving some quick feedback to CMS to help with those education
efforts. It seems like that's going to be very important.
Any other comments about key implementation issues? I want
to turn to one other implementation topic----
Dr. Scully. Just a note, that in the education world there
are a lot of other things being learned. You may have noticed
there's a fair amount of ferment going on in health care and
what physicians' roles will be, and our relationship with CMS
in other areas. There's a lot going on. So this will be one,
probably not the highest priority for our folks.
Dr. McClellan. That's right, a lot else happening now.
Ms. O'Farrell. Could I add one thing?
Dr. McClellan. Yes. Go ahead, Liz.
Ms. O'Farrell. I referred to this in my opening statements
as well. Under our CIA, we have been very clear in reporting on
physicians where we influence or control the selection of the
physician. So what that doesn't broaden to is every vendor that
we use who may or may not be using a licensed physician to do
work for them on our behalf, a consulting firm, a law firm, a
training development company that we go to get training and
they need to use a physician to review some of the training,
for example.
If that doesn't change in the final regulations and the
knowledge standard stays and there's an expectation that we
would know and take reasonable efforts to know what every
vendor that we engage is doing with any kind of health care
professional or licensed physician, and then have an obligation
to attribute some value for that work and publish it, the
implementation timelines are--we don't believe that that's
manageable operationally at all, and the implementation
timelines are very short.
Where I get concerned about the iterative process--and I
appreciate that, and we've had that with the OIG, and we want a
venue to be able to come forward and say is this the right
interpretation, is this a different way. But some of these, you
can't go back and change a business process retroactively. You
just can't. Once you've done it, you've done it. And so some of
these, we're going to have to have really good clarity before
day one, because we can have a discussion for 90 days, 100
days, and if it comes back that the answer is different than
what we're hoping, we have no way to go back and change our
business processes to start tracking that.
So I think that's where we have to understand that an open
discussion for all the implementation items is good, but you
can never go back and recreate transactions or change your
business processes retroactively.
Dr. McClellan. Liz, you and Doug both particularly
highlighted this concern around this. Doug said payments that
you don't know are going to be attributed on your behalf.
Dan, this is something that I think you all commented on as
well. Any thoughts about how to resolve this implementation
issue?
Dr. Carlat. The overall comment that we made--and you've
mentioned the Deloitte survey that we had looked up. Deloitte
surveyed pharmaceutical executives recently and asked them how
prepared are you for the Sunshine provisions. Eighty-eight
percent of those respondents said they were at least 50 percent
prepared, and a third said that they were 100 percent prepared.
We realize that, of course, in that survey the respondents
didn't know exactly what the Sunshine rules would end up being.
So there may have been----
Dr. McClellan. It may have been a test of optimism.
[Laughter.]
Dr. Carlat. I think the bottom line is that they were
fairly optimistic, and given the fact that virtually all drug
and device companies have had to report this data for certain
states, we're fairly confident that they've developed reporting
systems that have been able to work.
Dr. McClellan. There is a good deal of experience out there
to draw on.
Just so you all know what's coming, I do want to make sure
you get a chance to get out everything you think is important.
So in a few minutes before we wrap up, I'm going to ask you
all, give you all a minute or two to highlight any points that
you want to make sure that people in general, or Niall, or
others in particular take away from this discussion, and any
other issues that we haven't brought up yet. So I'll be turning
to you all for that in just a few minutes as we get closer to
wrapping up.
I did want to come back before then to one more
implementation issue, and that's that many of you have stressed
the importance of standards. As I mentioned at the outset, this
is a challenge in lots of different areas of health care, where
the information involved is complex and the responses are often
a combination of actions by CMS and their coding decisions and
things like that, but also a lot of leadership from industry
and other stakeholders involved to try to get to consensus to
solve these practical problems.
So, Niall, first to you. You mentioned the work on data
systems that you're thinking about in parallel to the final
regulation, and CMS has to rely on a lot of information
technology, information management vendors in this process. Is
there anything you can say now about what's going on in this
regard? I know that the final regulation isn't out, but if
there's some technical work being done around data structure
and things like that, maybe that's something that would benefit
from even more collaboration.
Mr. Brennan. Obviously, there are two types of
implementation challenges. There are the implementation
challenges that applicable manufacturers face, and there are
the implementation challenges that CMS face, and those are
overlapping. But realistically, the applicable manufacturers
face their implementation challenges on a slightly more
aggressive timeline than CMS does because when the data
collection begins, as the law specifies, applicable
manufacturers have to collect data for an entire calendar year
and then submit it to CMS on March 31st of the following
calendar year.
So there are definitely great challenges for applicable
manufacturers, not that CMS' challenges are any less, but
they're different. We'll be receiving a standardized data
template from hundreds of applicable manufacturers and GPOs
containing potentially hundreds of millions of lines of data,
and as some of the other panelists have alluded to, our big
challenge will be accurately aggregating the data in a way that
we're sure that all the right dollars are going to all the
right physicians, accurately and efficiently establishing a
review, a secure review, an appeal process for physicians to be
able to review those results and let us know if they agree with
them or not; and if not, work with applicable manufacturers to
come to resolution; and then finally, presenting it in a
consumer-friendly and accessible manner on a website.
So that's how we're approaching our side of the
implementation challenge. Obviously, Mark, as a former CMS
administrator, you know our goal is to try and avoid
duplication of systems and building other silos. So there's a
lot of activity across the agency around building out or
examining the build-out of provider portals and how does
authentication work and security, different things like that.
So those are the types of actions that we're taking right now
to get our implementation ducks in a row.
Dr. McClellan. So before we wrap up, I'll see if there are
any further thoughts on this issue of system support and
standards for effective implementation of these requirements as
soon as possible.
Chuck.
Dr. Rosen. I think the work lies more with industry's
template of how to work out what the accuracy of the payments
are, and they should be very accurate, and there's no
disagreement about that.
I don't understand why it would be a problem for CMS to
aggregate the data and collect it. We've done it, and we're
nobody, and we've collected all the data for seven years, and
we haven't even gotten cooperation of any of the companies to
send it to us. We've had to query the systems, and all 75 or 80
companies have different systems. Some are better than others.
So I don't understand where there's an issue of, when CMS
gets the data on some template, why it can't be put up the next
day, frankly. We have security. We have all these things on our
website.
In the summary note, I also want to mention, talking about
what you said, that doctors should know about this, there's no
penalty to getting money, no matter how much it is. There's no
part of the Sunshine Act that says you cannot get this amount
of money for whatever thing you do. The companies don't like it
because sometimes, most of the time it's with products that are
a little iffy, that you don't want people to know are not
necessarily independently validated. The vast majority of
products are very good. In fact, they're very good that people
name them after themselves. But I don't know what the
defensible reason is for not accurately listing money that
you've received from a company, which is the basis of the
Sunshine Act.
Dr. McClellan. I think that is the goal that we're headed
for.
Any other thoughts about things that could be done now to
get to more standard, effective templates for this reporting so
that the program can hit the ground running?
Dan.
Dr. Carlat. So there's been a whole cottage industry of IT
businesses that are providing software solutions for companies.
If you go to any of the meetings, you'll see whole exhibit
halls now filled with these companies. That's good for the
economy.
One of them is for the dispute resolution process. There
are a couple of companies that are creating physician portals
so that you don't have to get into a position of that terrible
45-day window before the information goes public. There will be
software available to create portals for doctors to go in to
look up exactly what they've been reported, how many hundreds
of dollars have been reported, and then to communicate with the
company if they disagree. So that's just one example of many
different solutions out there.
Dr. McClellan. Thanks. I appreciate all the comments on all
the topics. We are coming close to the end of our time. I have
a minute or two for you all to highlight any final issues. You
don't need to restate everything that you've already stated or
that's in your written statement, just any points that we
haven't discussed as much as you'd like that you'd like for
people here to take away.
Liz, can I start with you?
Ms. O'Farrell. I will restate that I think the
implementation timeline is very aggressive for companies that
do not already have any kind of reporting in place.
One thing that we didn't talk about today is the definition
of applicable manufacturer, and we really believe that it needs
to be limited to the subsidiaries operating in the United
States. We currently have processes in place to track and
disclose U.S.-based physicians who are asked to go outside the
U.S. and present or be on an advisory board with one of our
outside-the-U.S. affiliates. We feel pretty good about those
processes, and we believe that those are valid processes to
require.
But to try to extend that to any U.S.-licensed physician
who happens to be asked by one of our foreign affiliates to
come in and do work for them--so you have a French-based
physician who also has a U.S. license, and to try to get that
French affiliate to put a process in place to track those type
of transactions we believe is meaningless to the public and
would require such a level of infrastructure that 180 days,
360, it would be unable to be done in that short a time.
Dr. McClellan. Thank you.
Jeremy.
Dr. Lazarus. Thanks. I think the one thing that didn't come
up is the potential impact on the individual physician if the
data is not accurately reported, and that's why we are hopeful
that we'll be able to follow the statute in terms of the direct
reporting, some of the things I talked about before, and also
so that there is an ongoing dispute resolution process between
the physicians and the manufacturers. As Dan said, there is
already the ability to do that so the physicians can be aware
of what the reports are going to be, get those disputes ironed
out before they get up on the public website.
And also the thing I think we didn't talk about, and I was
glad that Niall talked about it, is that there should be a
dispute resolution process if there is a disagreement, and we
think that it should either be CMS or an independent agency.
But, hopefully that can get done and that 45-day window is more
of a rolling window so that there can be an opportunity for
physicians to dispute inaccurate reporting. Thank you.
Dr. McClellan. Thanks, Jeremy.
Dan.
Dr. Carlat. Thank you. I think the only thing that I'd like
to emphasize is from the consumer perspective. The information
is going to be interpreted in very different ways depending on
the doctor's relationship and depending on the consumer. For
example, I have a colleague who I was meeting with at my last
professional meeting who gives talks to companies. He's made up
to a million dollars a year giving talks. He gives a printout
to each of his patients detailing each one of his talks, all
the companies that he works for, and he tells me that not a
single patient has left his practice because they value the
trust in the relationship.
On the other hand, in the December 2011 issue of Health
Affairs Journal, there's a story from Maran Wolston, a woman
with multiple sclerosis, who worked with a neurologist who
offered her to be in a clinical trial, pressured her to be on a
couple of medications, one of which caused terrible side
effects. She wasn't sure about the level of trust. She looked
him up in the Minnesota database and found that he had made
$300,000 from two companies that made drugs that she had taken,
which made her seek a different physician.
So I think the point is here that consumers are going to be
interpreting the data in very different ways, but they deserve
to get this data. It's important data for them to have.
Dr. McClellan. Thanks very much, Dan.
Diane.
Ms. Biagianti. I would just add a couple of points, some
that we've already talked about. Most of the things that
concern Edwards with implementation are certainly the indirect
payments which we've all discussed, and that is a big
operational burden for device manufacturers, pharmaceutical
manufacturers. So that is a big issue.
Certainly the issues or the potential disputes that may
come from physicians with respect to misrepresentation of the
allocation, whether it be meals that they don't feel are
appropriately allocated to them, or whether it's the clinical
research that they don't feel is appropriately identified or
allocated to them when they haven't been paid.
So those are the biggest issues we see, and that leads to
the dispute resolution process. We do think there does need to
be an appropriate amount of time. We can't yet guess how many
disputes will come in as a result of this process. It's very
different than the voluntary disclosure program that we've
implemented, so we can't yet guess what time is needed to give
physicians significant time to dispute it, but then we need to
add on a separate, segregated time period, a time for the
manufacturers to do their research and to work before that gets
publicized.
Dr. McClellan. Great. Thank you.
I'll save you for actually the next to last word. I get the
last word.
Doug.
Mr. Peddicord. Well, let me just say, I think well
implemented, Sunshine will illuminate the triangular relations
between biopharma companies and doctors and patients. What that
means is that it will illuminate interests, the vast majority
of which are not conflicts of interest. They are interests.
People have a right to understand the interests that each of
the participants have. But again, that doesn't represent,
necessarily represent a conflict of interest.
We've been pleased to be part of a national dialogue on
health care innovation which has very much been looking at
these issues around conflict and potential conflict and how to
manage that. I think the principles that came out of that
dialogue, and it's a dialogue across industry and patient
groups and the like, was that those relations should be built
on four principles. They should benefit patients, first of all.
They should preserve the autonomy of health care professionals.
They should be transparent. And they should build
accountability into the mix.
And so with that in mind, what's important to note is that
Sunshine doesn't replace ethics, that when a physician enrolls
a patient in a clinical trial, for instance, the disclosure of
interests is not a replacement for the physician behaving
appropriately and ethically. I don't think we should suggest
that informing the patient of financial interests somehow
prevents people from doing bad things. That's not the point of
Sunshine. Sunshine should be about transparency and interests.
Again, without some interest, there won't be even the potential
for a conflict of interest. So, with that said----
Dr. McClellan. Thank you very much.
Chuck.
Dr. Rosen. Being the only orthopedist on this panel, I'm
sure there will be a bunch of jokes about that.
Maybe the dollar limit is too low. Maybe it uses up too
much of the industry effort to ferret out $200 or less, and it
should be somehow differentiated and more focused on money
that's over $200 or $500 or $1,000.
And just a final word, the Sunshine Act will not hurt but
will improve legitimate research and physician education. It
will not hurt physicians to be transparent for the reasons Dr.
Carlat elucidated. I think there's a fear of this transparency
that's unwarranted and exaggerated by some.
Dr. McClellan. Thank you.
Jay.
Dr. Scully. Patients deserve to know this information. We
all agree to that. The information needs to be accurate. That's
some of the concerns about Murphy's Law that still exists. If
things can go wrong, they will go wrong. And it hasn't come up,
the estimate that for an office practice, the cost per year for
reviewing this is $72 is a fantasy if there's a dispute.
Dr. McClellan. Thank you.
And with that, I'd like to turn to Niall for the next to
the last word for the roundtable.
Mr. Brennan. Well, I don't know if people know, but I used
to work for Brookings a couple of years ago, so him having the
last word is just like old times.
We appreciate the opportunity to be a part of the
roundtable. We think the feedback was excellent. I don't think
it's an exaggeration to say there's probably nobody in this
room who would like to see the final rule come out more than
me.
[Laughter.]
So we hope that we can make that happen very soon.
Dr. McClellan. Great. Thanks, Niall.
Niall does get the award for the toughest question of the
day, and it came from Chairman Kohl or Grassley and Senator
Blumenthal. I know it was on everyone's mind. I appreciate your
being here for this discussion.
But I also appreciate all the rest of you taking time to
answer a lot of challenging questions and to keep this moving.
Everybody stayed within their time limits. That doesn't happen
often in events that I moderate, especially on such a
challenging topic as this.
I think that's a testament to both how important and
meaningful this issue is and how much everyone who is involved
in it does want to see this move forward and succeed.
This roundtable will definitely not be the last word, but I
hope it's been helpful in advancing the discussion, and I, for
one, look forward to what happens next, and I want to thank all
of you, and the senators especially, for their continued
involvement and their keeping their hearts behind effective
implementation of the Sunshine law.
Thank you all very much.
[Applause.]
[Whereupon, at 4:29 p.m., the hearing was adjourned.
APPENDIX
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