December 15, 2011 / 12:55 AM / 8 years ago

Drugmakers get more time to record gifts to doctors

WASHINGTON (Reuters) - U.S. drugmakers and device companies got an extension on the deadline to record all payments and gifts to doctors because of a delay in a proposed rule from health officials.

The Physician Payment Sunshine Act, part of President Barack Obama’s healthcare overhaul last year, requires manufacturers to report all payments to doctors above $10 and pay penalties if they fail to do so.

The Centers for Medicare and Medicaid Services (CMS) on Wednesday posted draft regulations that outline procedures for companies to report the information and share it with the public.

The rules were supposed to be finished by October 1 and would have required companies such as pharmaceutical giant Pfizer and devicemaker Medtronic to start collecting information on payments from January 1.

But CMS said because the rules were late, manufacturers now have until the final rule is published sometime in 2012 before they must start recording payments to doctors.

CMS said it needed extra time to draft the proposed rule in order to determine the most efficient and cost-effective way to implement the provision, and also make sure its Office of Information Systems had enough resources to make it work.

The new requirements are meant to shine light on the industry’s ties to physicians, which can include pricey dinners,

golf vacations, and consulting and speaking fees.

Critics of such gifts say the perks may skew doctors’ decision-making when prescribing treatments.

CMS said it would post the payment information on a public website that would be easily searchable and aggregated - a key issue for consumer groups that fought for the rule’s passage.

“When people are faced with the difficult task of choosing the right doctor, they need all the information they can gather,” said Dr. Peter Budetti, CMS deputy administrator for Program Integrity.

“If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it,” he said in a statement.

The proposed rule would fine manufacturers $150,000 for failing to report such payments, and $1 million for knowingly failing to report them.

Companies, as well as group purchasing organizations (GPOs), would also have to report any ownership or investment stakes held by doctors. GPOs negotiate lower drug prices from manufacturers in return for guaranteed contracts from a range of hospitals and pharmacies in their system.

The rules came one day before a planned hearing in the Senate Special Committee on Aging, chaired by Wisconsin Democrat Herb Kohl, to discuss the delay in the regulations. The hearing has now been postponed.

The gifts-reporting measure was originally proposed in 2009 by Kohl and Iowa Republican Charles Grassley, and then became part of President Obama’s healthcare law in 2010 as a way of reducing healthcare costs through greater transparency.

Both senators have sent several letters to CMS in past months, urging it to act on the rule.

“The completion of the guidance is good news,” Grassley said in a statement. “It came after a lot of follow-up from Sen. Kohl and me to find out the status and to press for results from CMS.

“It shows Congress has a responsibility not just to make laws but also to see that they’re carried out as intended.”

Reporting By Anna Yukhananov; Editing by Gary Hill

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