The Physician Payment Sunshine Act imposes a high standard of transparency across a broad swath of activities by pharmaceutical, biotechnology, and other medical product companies (referred to as manufacturers in the Act). Industry has paid a lot of attention to the PPSA in terms of developing legal compliance and tracking/reporting systems, but it has given much less attention to operational issues, especially as they affect meeting management.
This needs to change, because the Sunshine Act has profound implications for medical meetings. The Act requires industry to disclose a wide range of payments and transfers of value (TOV) to physicians and other healthcare providers. In some cases, the Act won’t cause major change, because the Pharmaceutical Research and Manufacturers of America guidelines already prohibit many categories of TOV, such as premium items, and several bio/pharma companies already voluntarily disclose payments to physicians. But the Sunshine Act will impose new disclosure requirements on many expenses controlled by meeting managers, such as air and ground travel, hotel lodging, and meals. This places meeting managers front and center in the new era of PPSA transparency.
Fortunately, there is much that meeting managers can do to be ready for the Sunshine Act and to help reflect a better corporate image to the public.
Know the Timing
It's been often stated in print or from the podium that the Sunshine Act takes effect in 2013, because by April 2013 manufacturers must make the first annual submission of data. But in reality, the Act takes effect on January 1, 2012, when manufacturers must begin keeping records of all payments and TOV. This provides only a handful of months to prepare for PPSA implementation. Meeting managers should convey a sense of urgency around preparing for the Sunshine Act.
It's About Transparency
To date, most people in the bio/pharma industry have viewed the Sunshine Act as a compliance-tracking and reporting issue. But they may be missing the point: this Act will usher in an era of unprecedented transparency, opening a public window on millions of transactions between bio/pharma companies and U.S. physicians. This is because all data reported by manufacturers will be posted to a PPSA Web site that is open to the public. In fact, the Act specifically requires that the public Web site be easy to use and searchable, and that the data can be aggregated and downloaded. In other words, anyone will be able to access the database on the PPSA Web site and run reports on annual payments/TOV by individual, institution, geographic area, type of expense, drug name, company, etc. For meeting managers, PPSA means that every meeting expense to every U.S. physician will be open to public scrutiny, so it's important to plan meetings with a “spending profile” that reflects positively on your company.
Do An Internal Audit
One of the best actions you can take now is to conduct a self-study of your company that addresses the question of what you would report if PPSA were in effect now. Your self-study should take a look at 2010 spending, or perhaps the 2011 running rate of spending, and measure various items that will be reportable under PPSA in just a few months. Things to measure include the total number of reportable transactions in major categories such as honoraria, travel and lodging, and meals, as well as the average expense amount, and dollar value range, for each category. You may wish to conduct the self-study in your division only, but it’s clearly better to conduct a self-study that spans all areas of your company that must comply with PPSA, including field sales, marketing, medical affairs, clinical research and various corporate functions. Once the self-study data is in, it’s important to aggregate it so you can look at total annual spending by your company that will be reportable under the PPSA.
Consider Making Changes
The Sunshine Act does not set any limits on how much manufacturers can spend; it only requires accurate reporting. However, the transparency created by the Act is likely to result in a reaction by the public, media, and politicians, especially if spending practices seem too lavish. That’s why it’s important to consider the data from a self-study now, and look at it through the eyes of a public that has grown wary of the bio/pharma industry. For items such as honoraria, hotel lodging, and meals, ask, “What do we spend on average? What’s the most we spend per physician? What does this add up to annually?” These factors constitute your spending profile, and it’s important for your company to be comfortable with its spending profile and confident it can defend all aspects of its spending to a questioning public. If any aspect of your profile raises concerns with management, then you must consider changes in your spending policies and practices. And the time to act is now, in 2011, before the PPSA goes into effect.
Develop a Disclosure Policy
The PPSA requires that every report of a payment or TOV must be accompanied by the name of the recipient, which is posted to the public Web site. This gives physicians and other medical professionals a considerable stake in the Sunshine Act. As the Act takes effect in early 2012, many physicians may not be aware their names will be publicly reported as part of a PPSA transaction, and they deserve to be informed. Although the Act does not require disclosure, it is both good ethics and good business to inform physicians about PPSA reports before they commit to an activity that will trigger a report. It’s easy to foresee that some physicians may be upset if they are not made aware of this new reporting mechanism and their name subsequently appears next to a transaction on the PPSA public Web site.
Every disclosure should include the anticipated amount, especially for TOV such as dining, where physicians may tend to significantly underestimate the value of a meal at a catered function. Because disclosure should occur in the invitation or confirmation phase of various programs, meeting managers can be instrumental in crafting effective disclosure policies and practices.
Plan to Communicate
The Sunshine Act will impose reporting requirements that directly affect how the bio/pharma industry interacts with the U.S. medical community. Of course, it’s important to comply with the Act, but beyond that, it will be important to effectively communicate with medical professionals about the Act. Past experience has shown that the medical community tends to lag well behind industry in understanding new regulations, and there’s likely to be a lot of confusion surrounding the PPSA, especially as it launches in early 2012. That makes it important for everyone in contact with physicians to be able to clearly explain key aspects of the Sunshine Act. Meeting managers must be especially conversant with the regulations, because the PPSA creates reporting requirements for numerous transactions that occur at medical meetings. To be a good communicator, meeting managers need to understand technical provisions of the Act, develop formal policies and position statements, and be trained in communicating their companies’ policies, which might include the use of role-playing exercises.
There’s a lot that meeting managers can do for themselves and their companies to get ready for the Physician Payment Sunshine Act. Perhaps the most important step is to recognize that the Sunshine Act is on its way soon and that the transparency created by the Act will have broad implications. Meeting managers should take action ahead of time so that once the Act goes into effect, their meetings and their companies will present a positive profile to the U.S. public.
Bill Cooney founded Evanston, Ill.–based MedPoint Communications Inc. in 1990, and he continues to lead the provider of digital medical communications and information services. Contact him at bill.cooney@medpt.com.
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