Pharmaceutical companies will have a little more than a year to put together data to comply with CMS regulations for reporting payments made to physicians if the agency meets its current timeline for issuing the rules.

A notice of proposed rule-making to solicit comments on how to interpret physician payments "sunshine" provisions of the Affordable Care Act is slated for publication in late summer of 2011 by CMS's Center for Strategic Planning, and the final rules to be issued in the winter of 2011, the agency told "The Pink Sheet."

Manufacturers of drugs and other medical products already are gearing up to meet their first annual reporting deadline of March 31, 2013.

Without regulations or other guidance on what to report and how to submit the information to CMS, however, companies are left with the language in the ACA as their guide to getting it right (Also see "Reform's "Sunshine" Clause Prompts Firms To Review Disclosure Web Sites" - Pink Sheet, 26 April, 2010.).

For some payments, that might suffice to allow companies to start the process and adjust when the regulations come out.

"You take a conservative approach and you do your best to make sure that you're reporting what they need you to report," Valli Baldassano, executive VP and chief compliance officer at Cephalon, said in an interview.

Baldassano already has experience with reporting physician payments through implementation of Cephalon's Corporate Integrity Agreement with the HHS Office of Inspector General ("Cephalon Is First Company To Release Physician Payments Under Consent Decree," "The Pink Sheet," Feb. 2, 2010).

Clinical Trial Payments Tough To Determine

But some of the law's requirements, such as payments to physicians for clinical trials, are less obvious.

Checks for clinical trials usually are not written to doctors, but rather to the institution where the trial is conducted, Baldassano said. The drug company does not know how much money is passed through to the doctor, or whether it helps pay his salary or is a payment for the trial, she pointed out.

In asking institutions for a clarification, companies are likely to run into privacy issues, she said. "It's just an administrative hassle that the institution's going to have, to even parse out what part of the clinical trial fee that we're paying, what part of that goes to the doctor."

Beyond the principal investigator, she said, payments may go to supporting doctors or to outside experts that may be physicians.

"How much is the company, who's the sponsor of the trial, responsible for tracking down and then, how much cooperation are we going to get from the institutions in getting that clarified?" she asked.

Firms need "just some clarification around how should we quantify that payment that goes to institutions when there's a doctor doing the investigation."

Reporting what goes to the institution could be the simple solution. But Baldassano noted that this would not be particularly helpful given that the purpose of the law is to identify relationships between companies and physicians.

No Single Button To Push

Delineating payments related to clinical trials is an example of how the pharmaceutical industry is "a much more complicated industry and business than I think HHS or the Congress understood," she said.

"I think that there was some thought that companies could just push a bottom and a number would come out, that this is how much money goes to Dr. X or Dr. Y. It just doesn't work that way."

Physician payments are not the only compliance area where firms may face collection, not just reporting, challenges, as states continue to implement their own marketing disclosure laws (see Also see "Coupons, Vouchers Are Dilemmas For Industry Under Vermont Drug Sample Reporting Law" - Pink Sheet, 14 March, 2011.).

Baldassano also noted the need for consistency. Companies that report their payments voluntarily or through CIAs currently provide a variety of information in a number of ways. That will change with the ACA regulations as the HHS Office of Inspector General plans to align CIA requirements with those of ACA (see Also see "Corporate Integrity Agreements To Revise Definition Of Physician Payments" - Pink Sheet, 14 March, 2011.).

It is important "that the public knows what they're looking at and it's apples to apples," she said.

Presumably, the government wants the information reported "so patients could look and compare company to company and doctor to doctor. That would argue for consistency."

By Cathy Dombrowski

Physician Payments Sunshine Rule From CMS Expected By Year's End

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