The Sunshine Act Final Rule

Wednesday, July 03, 2013

In a nod to the increased interest in financial arrangements between clinical investigators and manufacturers, and the desire to eliminate conflicts of interest that still characterize research relationships in the health care industry, transfers of value to physicians, teaching hospitals, and other investigators for participation in clinical trials are becoming more transparent.

In February 2013, FDA finalized the guidance on Financial Disclosure by Clinical Investigators and CMS published the Sunshine Act Final Rule. 

The financial disclosure regulation (21 CFR 54) was enacted in 1991 in response to the HHS Inspector General’s advisory report stating that FDA's failure to have a mechanism for collecting information on "financial conflicts of interest" of investigators who study products that undergo FDA review could constitute a material weakness.  The regulation requires applicants of marketing applications for drugs, biological, or devices to submit certain information concerning compensation, significant other payments, and proprietary and financial interests of any clinical investigator (and their immediate family) conducting studies covered by the regulation.  Applicants must certify the absence of financial interests and arrangements that could affect the reliability of data submitted to FDA, or disclose them to the agency and identify steps taken to minimize the potential for bias. If the applicant does not include certification and/or disclosure, or does not certify that it was unable to obtain the information despite exercising due diligence, the agency may refuse to file the application. FDA intends to provide information about the number of clinical investigators with disclosable financial interests or arrangements in the new FDA posts for an approval decision.

The Sunshine Act (Patient Protection Affordable Care Act of 2010, Pub. L. No. 111-148, § 6002, 124 Stat. 395) requires applicable manufacturers of covered products to report payments or gifts of $10 or more made to physicians, teaching hospitals and other providers on a yearly basis including transfers of value for research conducted pursuant to a written agreement or contract. “Covered devices” are all devices that require premarket approval or notification to the FDA. “Research” encompasses both basic and applied research and product development. “Agreements” also capture unbroken chains of agreements where applicable manufacturers use other entities such as CROs to manage their clinical research activities. 

The disclosures must be specifically categorized, including but not limited to, ownership and investment interests held by physicians or their immediate family members, research contract payments, consulting fees, compensation for services such as serving as faculty or as a speaker, honoraria, gifts, entertainment, and food, beverage, travel, and lodging unless such payments are included in the written agreement and paid for through the research contract.

CMS is requiring collection of data to start August 1 and submission of 2013 data by March 31, 2014. The agency plans to publish the initial data on a public website by Sept. 30, 2014. In subsequent years, the agency will post the information annually on June 30. CMS is required by law to give physicians at least 45 days to review, dispute and correct reported information before posting it on the website. Companies can be subjected to a Civil Money Penalty fines of $1,000-$10,000 for each payment or other transfer of value, or ownership or investment interest not reported as required for a total maximum of $150,000. Higher CMPs can be imposed for knowing failure to submit required information in a timely manner: $10,000-$100,000 per instance, up to a maximum CMP of $1,000,000. 

This all means more paperwork and increased costs for industry and government. What will be industry’s burden to identify applicable products and recipients, implement the process to capture, categorize and track data, and handle appeals after the disclosures are made public by CMS? Are the reporting measures really worth the time, cost, and effort required for enforcement? 

On the other hand, if small gifts really change behavior, is full disclosure an adequate safeguard, or should we start treating our clinical researchers (and their staff members) the same way we treat FDA where it is simply off-limits to provide anything that can be given a financial value?

Finally, are the transparency measures unwarranted invasions of investigator privacy? And will the disclosures inhibit scientific discovery and collaboration, reduce beneficial relationships, stigmatize researchers and ultimately harm patients? 

We’ll just have to wait and see whether these concerns are real, and what the true cost of greater transparency is to medical devices.

Tags: CMS, Clinical Studies, FDA, Policy

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