Industry Trends Insights & Trends

How Will the Sunshine Act Affect Med Reps?

Sunshine Act and Sales Reps

You can run but you can’t hide. The start date may have been postponed, but that doesn’t mean drug and device companies are off the hook. As specified by the Patient Protection and Affordable Care Act of 2010, pharmaceutical and medical device companies offering any product covered by Medicare or Medicaid will soon have to report all payments made to physicians for consulting, research, speaking engagements, travel and entertainment. The government will post the information on a website available to the general public.

The Physician Payment Sunshine Act

The new regulations, referred to as the Sunshine provisions, are intended to create more transparency surrounding the relationships between doctors and medical companies, with the ultimate goal of reducing the impact of marketing on physicians’ treatment decisions. Many doctors may take offense to the implication that they could be swayed to prescribe one pill over another based on a gift from a drug company, but according to the New York Times, several researchers have found that those gifts and payments can and do influence physicians and may result in higher healthcare costs.

Companies were originally told they would have to start collecting data on January 1, 2012, but the administration failed to issue payment-reporting procedures by the October deadline, so the start date has been postponed indefinitely. The Centers for Medicare & Medicaid Services (CMS) issued draft guidelines on payment reporting back in mid-December, and the feedback period ended February 17th. A new start date will be set once the guidelines are finalized, but close to 100 industry groups have weighed in saying more time is needed to rethink the reporting procedure as well as the dispute process.

The current guidelines don’t require companies to provide an explanation of what the payment is for – a company sponsored round of golf is lumped in with an industry sponsored research grant. Consequentially, the resulting website publishing the data could read like a list of “pay offs” when in reality, the money is often compensation for the doctor’s time spent doing research, clinical trials, or sharing their expertise. Kate Connor, a spokesperson for PhRMA, explained to MMM online, “We believe the work physicians do with pharmaceutical companies is of real value, but it takes good context, such as descriptions of research of educational outreach, for patients to understand that value.”

So it would seem, industry groups are advocating for even more transparency, not less. If they are asked to provide information about their payments to doctors, they want to provide all of the information – not just the numbers.

How will the changes affect sales reps?

For some companies, the principle of transparency is nothing new. Companies such as Eli Lilly and Medtronic have publicly disclosed payments to physicians voluntarily for several years. Of course the new guidelines will standardize the way the information is collected and reported, so even for those companies already reporting, there are sure to be changes ahead, but how will these changes affect medical sales reps?

Unfortunately, the new regulations will likely make it even harder for reps to access doctors. Fears about the implications of appearing on a company’s website, and eventually a government website, may limit the type of interactions doctors are willing to have with reps. Many doctors will put the brakes on dinners with reps, and for some, even a catered lunch for their office could be off limits. Several posters on Café Pharma said doctors are already citing the Sunshine Act as a reason for closing their doors to reps.

Another problem potentially facing reps will be the increased difficulty of filing expense reports. While the Sunshine provisions don’t require the reporting of a gift of less than $10, if the gifts to an individual add up to $100 over the course of the year, each item must be reported. This means every gift – no matter how small – must be carefully tracked, ultimately increasing paperwork for reps.

Pharma reps, who frequently rely on providing meals as a way of accessing physicians, may be more directly affected by the new regulations, but device reps will have their share of reporting to do as well, and they too may find their customers a bit more standoffish.

In Conclusion

While reps are focused on how this will affect their ability to do their jobs, industry advocates argue that the larger cause for concern will be a resistance from doctors to consult with medical companies on the development of new products. Without this collaboration, life saving products could be delayed or never make it to the marketplace. On the other hand, consumer advocates insist more transparency is essential in order for patients to fairly asses their doctors’ motives. With the start date still to be determined, how will the CMS respond to the industry’s legitimate list of concerns? It remains to be seen.