The Sunshine Act Final Ruling: Clarification for Clinical Research


Applied Clinical Trials

Since December 19, 2011, when Centers for Medicare and Medicaid Services (CMS) published their first proposed rules for the Physician’s Sunshine Act, the duty for reporting payments to “Covered Recipients” has hung like a dark and stormy cloud over portions of our industry.  The 373 comments submitted provided CMS with a good cross section of the concerns of the estimated 1,150 “Applicable Manufacturers” of the clarity needed for operationalizing the proposed rules.  Now, with the publication of the final rule on February 08, 2013, the cloud, while not lifted, has at least eased, allowing illumination of the path forward.  While the release of the final rule(s) by CMS was delayed, it appears that the much of the delay was because CMS was incorporating the comments and September 12, 2012 testimony about the Act into the final rules.

Among the many payments and transfers of value that will be reported under the Sunshine Act, clinical research presents unique challenges.  The finalized rule has provided much-needed clarification in some areas of specific importance for reporting transfers of value related to Clinical Research.  

First, the definition of Research has been adopted from the Public Health Service Act (42 CFR 50.603) and now includes research conducted where there is either written agreement OR contract OR research protocol.  CMS has clarified the interpretation of 1128G(a)(1)(B) that transfer of value from applicable manufacturer to covered recipient may include intermediaries in a continuous chain of agreements.

Previously, reporting on clinical research payments without separating out pass-through costs made as part of a Clinical Trial Agreement, meant that reported amounts could be seen simply as large payments to physicians by the general public, who are generally lacking in knowledge about how clinical trials are designed , managed and funded.  In the final rule, CMS acknowledged this issue, noting that “research payments are unique and do not necessarily represent a personal payment to physicians.”   

Recognizing the difference between clinical research payments and other transfers of value, CMS has specified a different set of data to be gathered for payments associated with clinical research.   For clinical research, in a departure from the general theme of the Sunshine Act, the entity paid does not have to be a covered recipient.  The entity paid may include individual Investigators, Teaching Hospitals, Non-Teaching Hospitals, and Clinics.   When paid to a non-covered recipient, in addition to listing the name and primary business address, there is additional information to be gathered, including the name of the associated study, and names of related covered drugs and products.  Additional details about the payment will need to include Principal Investigator(s) and associated identifiers to be listed.  It is not clear if or how the transfer of value will be attributed to the one or many Principal Investigators detailed in the extended data set.  Although these changes will go a long way towards recognizing how research payments are different in nature from other transfers of value, the nature of aggregation on the eventual public disclosure remains unclear, as does the means for educating the public at large.   

Equally important is that the Secretary acknowledges that the submission format for data will be evolving over time, and has reserved the right to modify the format for data presentation.  Accordingly, CMS has committed to providing the format “at least 90 days prior to [the] first day of data collection for the next reporting year.”  This portends a continued need for technology support to proactively modify databases, and develop new output reporting to keep up with the changes.  Data submitted late will be considered a failure to report and may be subject to penalties.

Another unique aspect of research reporting is that transfer of values made as part of clinical research which meet the enumerated criteria may, at the applicable manufacturers’ discretion,  be subject to delayed publishing.  The delay would be until “the first publication date after the earlier of either: (1) the approval, licensure or clearance by the FDA of the covered drug, device, biological or medical supply; or (2) 4 calendar years after the date of payment or other transfer of value.”  The mechanics of releasing the information for publication under condition (1), above, remains unclear.  The four year maximum delay in publication, coupled with the five  year retention schedule for the submitted information by the Applicable Manufacturer, means that there is a potential for nine year retention of the associated records.

Within the coming weeks, the newly published final rules will be a hot topic of discussion in the industry particularly amongst Compliance Officers, Clinical Research Managers, and organizations supporting Clinical Research.  Therefore, the best preparation that all relevant parties can do now,  is to ensure that all potentially relevant data is available, and can be easily aggregated, formatted, and fed into a centralized system.

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