Sunshine Act casts shadow on CME

A bill introduced in the House of Representatives in March would mandate the reporting of all gifts to physicians worth more than $25—including education—and violators could lose millions in tax deductions for advertising expenses.

The Physician Payments Sunshine Act of 2008—or H. R. 5605—could require quarterly transparency reporting of product rebates, dividends, education, funded research, food, trips and travel, consulting fees, rebates, dividends and anything else over the value of $25, transferred to physicians by drug, device and medical supply companies, or by third parties acting on their behalf.  That information—who got what from whom—would be made publicly available.

The bill would impose fines of $10,000 to $100,000 per violation, and if a company failed to report a single gift over $25, it would lose its tax deductions on all advertising-related expenses for that year.

A similar bill, S. 2029, is moving through the Senate.

The House bill, authored by Rep. Peter DeFazio (D-OR), has a powerful co-sponsor in Ways and Means Health Subcommittee chairman Pete Stark (D-CA).

The Senate bill was introduced by Sens. Chuck Grassley (R-IA), ranking member and former chair of the Senate Finance Committee, and Herb Kohl (D-WI), chair of the Special Committee on Aging. “Americans are being gouged by pharmaceutical companies that spend more on marketing than they do on research and development,” said DeFazio in a statement. “They enjoy generous subsidies from the government, but have no accountability when it comes to the billions of dollars they spend promoting high-priced drugs.”

Stark added: “Patients deserve to know if doctors are on the take. Gifts and payments change doctors' behavior. If they didn't, drug, device and medical supply companies wouldn't bother. The Sunshine Act will help enable Medicare beneficiaries to determine if their doctors are acting in patients' best interests. It may even convince doctors to quit taking what can only be described as industry kickbacks.” 

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