Press Release

PhRMA Statement on Sunshine Proposed Rule

PhRMA April 26, 2013

Washington, D.C. (February 17, 2012) — Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Matthew Bennett today issued the following statement on implementation of the Physician Payment Sunshine provision of the Affordable Care Act:

“PhRMA is pleased to provide comments to the Centers for Medicare and Medicaid Services (CMS) regarding the proposed rules to implement the Sunshine reporting provisions of the Affordable Care Act. Because of the complexity of the information that is to be collected – and eventually published – through this provision, it is essential for companies to have adequate regulations to follow.

“Though we remain supportive of transparency, and continue to play a constructive role in the implementation of the Sunshine provisions, our comments do reflect some of our concerns with the CMS proposed rule from December. For example, we are concerned that some of the definitions proposed inappropriately expand the rule beyond the scope of the statute; we are concerned that some provisions proposed could lead to improper attribution of payments and would not reflect current accepted industry practices consistent with federal and state laws; and we believe that companies may need flexibility in their reporting obligations.

“We continue to believe that it is of the utmost importance for the information being disclosed by companies, when posted on the public website, to include sufficient context to convey the exact nature of the relationships between companies and healthcare providers, including how these relationships enable companies to communicate vital information to providers about the use of medicines and to conduct the research that is essential for the development of new medicines that address unmet medical need. If the contextual information is not accurate, not unbiased, not relatively complete nor written in non-technical language, the posted information could be useless or, worse, incorrect and confusing to the consumers who are supposed to benefit from this transparency.

“Regarding our comments on the proposed rule’s definitions, we feel that many of the definitions would expand the scope of reporting beyond the Congressional statute. For example, the proposed rule expands the scope of entities subject to reporting to reach a wide swath of companies that operate overseas, rather than in the U.S. Similarly, the proposed ’all-in‘ rule – which provides that once companies are subject to reporting, all of their transactions are within scope – would ultimately expand reporting to over-the-counter medicines, which were specifically excluded from the statute.

“While CMS recognizes some of the complexities of relationships by which manufacturers conduct and support research into new medicines, the proposed rule unnecessarily complicates the reporting, which could lead to considerable confusion when CMS presents the reported information on the public website. It is vital that CMS not establish rules that would discourage physicians and teaching hospitals from participating in the country’s vast research enterprise, because patients are in need of new, innovative medicines. In the submitted comments, we propose several specific changes that would make the reporting more consistent across the variety of payment structures. 

“Another issue introduced by the proposed rule relates to the attribution of payments. Rather than the adoption of strict, one-size-fits-all rules regarding calculation of transfers of value for meals provided in connection with an in-office educational presentation, PhRMA recommends that manufacturers have flexibility in assessing reportable transfers of value in this context, and base their calculations on reasonable assumptions grounded in fair market value.

“Because of the complicated nature of Sunshine implementation, and because the proposed rule, if finalized, would greatly expand the requirements set forth in the statute, we also believe that at least a 180-day preparation period following publication of the final rule would be appropriate in order for companies to fully operationalize preparations such as updates to (or establishment of) company systems, hiring new personnel, and training of personnel. Providing sufficient time for implementation is essential to ensuring the accuracy and completeness of the data included in the reports. An even longer period might be necessary if CMS proceeds with its expansive interpretation of several of the key definitions in the proposed rule.

“Our submitted comments are the result of significant consideration of the proposed rule and extend beyond the content of this statement. For our position on other features of the proposed rule, such as the definition of ‘transfers of value,’ indirect payments, characterization of reportable information, and reporting timelines, please see our full comments.

“Ultimately, PhRMA is pleased to submit comments to CMS because we recognize the importance of guidance that can help companies create clear procedural rules for operational clarity – understanding that clear procedural rules will also aid CMS in its Congressional mandate to oversee physician payment disclosure under the Sunshine provisions.”

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $49.4 billion in 2010 in discovering and developing new medicines. Industry-wide research and investment reached a record $67.4 billion in 2010. 

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