August 18, 2015

The Sunshine Act, now known as the Open Payments Program, was originally proposed in 2007 by senior US Senator Charles Grassley, a Republican from Iowa and Senator Herb Kohl from Wisconsin, a member of the Democratic Party. The Act was designed to increase transparency and accountability in health care by publicly listing consulting fees, research grants, travel reimbursement, and other gifts received by US physicians and teaching hospitals from manufacturers. It is now incorporated into both the Senate health reform bill (America’s Healthy Future Act of 2009, S.1796, section 4101) and the House-passed health reform bill (Affordable Health Care for America Act, HR.3962, section 1451). Most would agree the law has probably succeeded in its sponsor’s intent but with some broader consequences. The process of complying with the law has resulted in subjecting even the most routine and necessary business interactions between HCPs and manufacturers to undue scrutiny and encouraging the public and regulators to cast a suspicious eye on all entities covered under the program.
This is a case of good intentions producing an undesirable side effect and should serve as a cautionary tale for regulators in the UK, where reports indicate that something much akin to the Sunshine law may be in the works for UK physicians and medical suppliers.
It seems The Daily Telegraph, a morning UK English language broadsheet newspaper, has been looking at the alleged activities of select employees of the National Health Services (NHS), a UK Government agency. The newspaper has reported on compromising statements made to its undercover reporters in which some officials praised the lavish accommodations provided to them by pharmaceutical firms and boasted of their ability to influence others in their purchasing decisions.1 The Telegraph article specifically notes that NHS England and Jeremy Hunt, the Health Secretary, have stated that the newspaper’s investigation “raised the question of whether the Government should legislate for full disclosure of payments made to health professionals.”2
These revelations have raised the question of whether this will drive the creation of a UK Sunshine Act in the future. At present the UK market follows the guidelines of the Association of British Pharmaceutical Industry (ABPI) which requires that companies who hold membership within the association are required to report transfers of value made to health care professionals in order to be in compliance with the European Federation of Pharmaceutical Industries and Associations (EFPIA HCP/HCO Disclosure Code) The European Federation of Pharmaceutical Industries and Associations (EFPIA) represents the pharmaceutical industry operating in Europe. Through its direct membership of 33 national associations and 39 leading pharmaceutical companies, EFPIA is the voice of EU representing 1,900 companies committed to researching and developing new medicines around the world. Besides the foreshadowing of a potential UK Sunshine to come, one might ask whether the UK Anti-Bribery Act comes into play here also. Now I am not a lawyer nor do I play one on television, but the UK Anti bribery Act3 seems to provide general scope around the intent of advancing ones business by providing improper influence to others. The Act is concerned with bribery. Very generally, this is defined as giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so. So one could take the perspective that this regulation could cover seeking to influence a decision-maker by giving some kind of extra benefit to that decision maker (in this case, formulary committee decision makers), rather than by what can legitimately be offered as part of a tender process.6
As transparency is rapidly expanding as a global movement, it will be interesting to see what transpires with the Daily Telegraph investigation and its aftermath as well as with the evolving application of US legislation. Here, again, there are cautionary examples.
For example, another US law that I became quite familiar with when engaging international healthcare providers for consulting work is the Foreign Corrupt Practices Act (FCPA). The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. (“FCPA”), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Foreign Government officials and physicians? Apples and oranges, one might think, but when you look at it from the socialized medicine point of view, 58 Countries in the world have a universal, socialized, government subsidized / owned healthcare system. This can mean the physicians and its hospitals; those that the Life Sciences Industry interact with and have associated transfers of value for are government employees!7 The penalties for violation of the FCPA can be stiff. Several firms that paid bribes to foreign officials have been the subject of criminal and civil enforcement actions, resulting in large fines and suspension and debarment from federal procurement contracting, and some of their employees and officers have paid significant fines and gone to prison. Unfortunately, many industry colleagues feel that the US Sunshine / Open Payments Program effectively spoon-feeds data to and can support FCPA violations galore, inviting creativity on the part of those with prosecutorial inclinations.
This potential should serve as a caution to UK legislators as well as a reminder to our own of the slippery slope involved in legislating human perfection. Surely there are less onerous ways of advancing the goal of ensuring ethical behavior.


Contributed by:

Susan Hill, SVP, Global Products & Solutions, AHM

Susan joined AHM in June of 2013 and is responsible for the oversight and management of AHM’s Global Business Development and Solutions and Marketing team. With over nineteen years of experience in the Life Science industry, Susan brings experience in business development, product marketing, and new technology investment and optimization.