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Feds to Publicize Drug and Device Company Payments to Doctors Next Year

After a long delay, the U.S. Centers for Medicare and Medicaid Services published final rules for the Physician Payments Sunshine Act, which would bring transparency to financial relationships between physicians and industry.

Update, Feb. 1, 2013: This story has been updated.

After years of anticipation, all of the nation's drug and medical device makers must soon begin publicly reporting payments they make to U.S. physicians, according to final regulations announced this afternoon by the federal government.

The release of payments data in September 2014 would mark a milestone in the push to bring transparency to medicine. Once posted, patients will be able to see if their physicians receive money from any of the companies whose products they prescribe. Studies have shown that such payments, however small, bias physicians towards companies and their products.

Until now, ProPublica's Dollars for Docs tool has been the only freely available source for the public to search and analyze the payments made since 2009 by a dozen drug companies. ProPublica gathered the information from the companies' websites into one searchable, sortable database.

Most of these companies were required to post the information on their websites as part of settlements with the federal government over allegations of improper marketing. Companies have paid billions of dollars to settle the lawsuits.

ProPublica is working on an update of Dollars for Docs and in the coming weeks will expand the database to include payments from 15 companies through the end of 2012.

Drug companies, lawmakers and consumer advocates have grown increasingly frustrated by the time it has taken the U.S. Centers for Medicare and Medicaid Services (CMS) to release final rules for collecting and publishing the data under the Physician Payments Sunshine Act, which was a part of the 2010 health reform law.

The payments were supposed to become public beginning this year under provisions of the law. But federal health officials instead released proposed regulations in December 2011 and since then have been gathering and analyzing comments.

The data to be released in September 2014 will include payments made from August to December of this year, giving companies enough time to gather and report the information. The companies must turn the data over to the government by March 2014; doctors will then have 45 days to review the information for accuracy before it becomes public.

Companies will have to report the information annually afterward.

"You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need," Dr. Peter Budetti, the CMS deputy administrator for program integrity, said in a written statement. "Disclosure of these relationships allows patients to have more informed discussions with their doctors."

Sen. Chuck Grassley, R-Iowa, co-authored the Sunshine Act, which arose from his investigations of drug company payments to doctors. "Disclosure brings about accountability, and accountability will strengthen the credibility of medical research, the marketing of ideas and, ultimately, the practice of medicine," he said in a statement. "I will stay vigilant about how this law is implemented, especially after the delays seen already."

The drug companies that currently post payment information do so in different ways, using different time periods and different definitions that make analysis or aggregation of the data very difficult. The Physician Payments Sunshine Act requires every company to report the same information in the same way.

Drug, device and medical supply companies must report all payments over $10 to U.S. physicians and teaching hospitals. The data must include date of payment, a description of the service provided, the amount paid and which of a company's products the payment involved.

The types of payments to be reported include speaking fees, consulting payments, research, gifts, food, entertainment, honoraria, research grants, royalties and license fees, among others.

Companies that fail to properly report payments can be fined between $1,000 and $10,000 for each payment not reported, but the fine cannot exceed $150,000. A deliberate failure to report can lead to a fine of up to $1 million.

The trade group representing major pharmaceutical companies said it is reviewing the regulations. It had raised a number of concerns to the government. The Pharmaceutical Research and Manufacturers of America "remains committed to the principles of the Sunshine Act" and wants the information to be "usable, transparent, and understandable," Matthew Bennett, the group's senior vice president, said in a statement.

ProPublica's analysis of the payments released so far shows that many physicians receive money from several companies for promotional speaking or consulting on behalf of their products. In some cases, these payments totaled hundreds of thousands of dollars.

One Los Angeles-area doctor, for example, received more than $300,000 in speaking fees in 2009 and 2010 alone just from the companies in our database. Those firms account for only about 40 percent of U.S. pharmaceutical sales.

ProPublica also found that more than 250 physicians chosen to be drug company speakers and consultants had been disciplined by their state medical boards or other regulatory agencies.

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