Is My Doctor On the Payroll of Some Drug Maker? Now Easier to Find Out

After 15 months of delay, the Centers for Medicare & Medicaid Services has finally released the long-awaited Sunshine Act rule, which establishes procedures for gathering and publishing data containing financial ties between physicians, teaching hospitals and drug and device makers, as well as group purchasing organizations.

The rule was created to address rising concerns that such financial relationships may unduly influence medical research and practice. For this reason, the release of the final versions marks a watershed moment in the ongoing effort by a wide array of organizations and individuals to force drug and device makers to become more transparent. Even small financial ties have been shown in studies to bias physicians (covered in prior Pharma news).

Market share battles among major pharmaceutical companies -- including Johnson & Johnson (JNJ), Pfizer (PFE), Novartis (NVS), Sanofi (SNY), GlaxoSmithKline (GSK), Merck (MRK) -- have intensified in recent years, as the industry has had a hard time generating revenue gains due to patent expirations on existing drugs and to company labs developing too few new drugs. Gaining the backing of doctors, of course, is a key element in market share battles.

JNJ Revenue TTM Chart

JNJ Revenue TTM data by YCharts

The rule, which is part of the Affordable Care Act, requires manufacturers and GPO’s to post payments exceeding $10 to physicians and teaching hospitals on their web sites. This would pertain to consulting fees, food and beverages and research payments for instance. The data to be posted would also include all ownership or investment interests held by a doctor or family member. Penalties for violations can range up to $150,000 annually for failing to report data and $1 million if a company knowingly fails to report the information.

To read the remainder of this article, go to Pharmalot.

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