The document discusses the challenges and limitations of the Physician Payments Sunshine Act, which requires drug and medical device companies to report payments and gifts provided to physicians. While intended to increase transparency, it faces issues in fully capturing all financial relationships and providing proper context. The data has had limited impact on physicians and patients, but is being utilized by other groups like researchers and lawyers. Overall, the Act faces obstacles in communicating complex financial data in a clear and meaningful way to different audiences.

1. Deciphering the Sunshine Act:
Transparency Regulation and Financial
Conflicts in Health Care
Richard S. Saver
Arch T. Allen Distinguished Professor
UNC School of Law;
Professor (Secondary Appointment)
Department of Social Medicine – UNC School of Medicine;
Adjunct Professor - Dept. of Health Policy & Management;
UNC Gillings School of Global Public Health

2. Physician Payments Sunshine Act
• Part of Affordable Care Act (2010); Final regulations
issued in February 2013
• Manufacturers must report annually physician
investment interests and “transfers of value” to
physicians and teaching hospitals
• Payments > $10 per instance or > $100 annually
• Payments reported by defined categories: consulting
fees, research grants, royalties/licenses, food & beverage,
travel, etc.
• Payments info in the Open Payments Database for part of
2013, and all of 2014, 2015, [2016]

3. Source: CMS Open Payments Database6

4. Implementation Challenges: Capturing All Relevant Info
• Which Recipients?
> MDs – yes;
> PAs, nurses, residents – no
• Which Entities Making Payments?
> Manufacturers – yes,
> distributors - ??
• Affiliated companies (Ex: 5 diff. Johnson & Johnson
subsidiaries making payments for same diabetes drug)
• Distorted incentives for reporting compliance:
manufacturers vs. physicians

5. Implementation Challenges: Context
• It’s not just the amount of $ that’s important
• Risk of bias/undue influence depends on number of
variables, including:
• Amount of $, the $ at stake relative to physician’s other
income, how long financial relationship will continue,
how long measurement period to earn $, historical
relations between the transacting parties, how many
patients affected, whether other physicians have same
financial ties, ability of physician to refer/prescribe the
company’s product, physician’s interest in maintaining
relations with the company
• How to disclose all this?

6. Source: CMS Open Payments Database7

7. Source: CMS Open Payments Database9

8. Risk of Limited Contextual Info
• Perry et al, Trust and Transparency, 42 JLME 475 (2014)
• How payments characterized ultimately more salient than $
amount paid
• Physicians paid for consulting with industry, regardless of
amount, viewed as “experts in field” and “better informed
about latest treatments”
• Whereas physicians paid for travel, even lower amounts,
viewed as less trustworthy and having less expertise

9. Implementation Challenges: Comparatives
• Comparative info reveals to patient if her MD an
outlier and also if there are reasonably available non-
conflicted MDs
• But no meaningful comparative info in Open
Payments Database
• “If your doctor took $1000 last year from
pharmaceutical companies, is that a lot? What’s the
average? Who am I comparing it to? Figuring that
out is asking [much] of individual patients.” – Brian
Callaghan, M.D. (Univ. of Michigan)

10. Low Cost?
• CMS estimates $180 million annual
compliance costs incurred by manufacturers,
physicians, hospitals, and other recordkeeping
entities
• Economic theory predicts manufacturers may
pay some MDs more $ as result of Sunshine
Act, to offset reputational costs to recipients

11. Primary Audience: Patients/Subjects
• Sept. 30, 2014 – Aug. 1, 2015: Open Payments
Database had 1.1 million page views, searched 6.5
million times, and close to 50,000 data downloads
• Search costs in accessing Open Payments Database not
insignificant
• Patients prefer not to learn of financial COIs via
searchable websites; desire discussion with MD during
office visit (M. Oaks, How Should Doctors Disclose Conflicts of Interest
to Patients: A Focus Group Investigation, MINN. MED., Jan. 2015)
•  Key distinction between transparency that is
publicly accessible vs. actually accessed

12. Patients/Subjects
• Risk of skewed responses to more salient
information about amount of $ and payment
category
• Learning of a financial COI can create “insinuation
anxiety” for patient to follow the physician’s
recommendation
• Learning of a financial COI can lead patients to be
more trusting because of the act of disclosure
• Even if inclined to discount the physician’s advice,
patient may not know how to do so and to which
degree

13. Patients/Subjects
• Financial COI disclosures seemingly have limited
sway over patient/subject decision-making
• Majority of subjects find it acceptable for investigator
to own stock in or have consulting agreement with
company making experimental drug (Hampton et al.,
Patients’ Views on Financial Conflicts of Interest in Cancer Research Trials, 355
NEW ENG. J. MED. 2330 (2006))
• Majority of orthopedic surgery patients not
bothered if surgeon paid to consult for device
manufacturers for devices the physician may
recommend (Khan et al., The Surgeon as Consultant for Device
Manufacturers: What Do Our Patients Think? 32 SPINE 2616 (2007)

14. Patients/Subjects
• A majority of subjects would not change
decision to participate in research if they knew
about financial ties (Weinfurt et al., Effects of Disclosing Financial
Interests on Attitudes Toward Clinical Research, 23 J. GEN. INTERN. MED. 860
(2008))
• While majority of patients and subjects
express desire to know about financial COIs,
far fewer believe disclosure would affect their
decision-making (Licurse et al., The Impact of Disclosing
Financial Ties in Research and Clinical Care, 170 ARCH. INTERN. MED. 675
(2010))

15. Patients/Subjects
• Why seeming indifference about financial COIs?
• Among patients who believe their own MD has no
industry payments, 41% are incorrect (G. Pham-Kanter et
al., Public Awareness of and Contact With Physicians Who Receive
Industry Payments, J. GEN. INTERN. MED. (2017)
• Insurance coverage with limited provider network
• Also may be limited number of available physicians
who do not have similar financial ties
• “Stickiness” of MD-patient relationship

16. Primary Audience: Physicians
• Stumbles in early phases in getting MDs to verify
accuracy of reports in the Open Payments Database
• 76% of physicians believed their relations with industry had
not changed since launch of Open Payments Database (E.
Silverman, Many Docs Haven’t Visited the Open Payments Database, WALL
ST. J., Feb. 20, 2015)
• Does public reporting deter MDs entering into financial
relationships? Possible spending slowdown since Sunshine
Act launch in certain categories like food but not clear this is
due to physicians declining the relationships. And no major
year-to-year spending changes since Sunshine Act launch

17. Physicians
• Does public reporting alter prescribing trends? Not
seen under state sunshine laws re: prescribing rates
for brand name statins and selective serotonin
reuptake inhibitors (SSRIs) (Me., W.VA)(G. Pham-Kanter, et al,
Effect of Physician Payment Disclosure Laws on Prescribing, 172 Arch. Intern. Med.
819 (2012)
• But contra study: decline in Mass. (state sunshine
law) in prescribing of statins, antidepressants,
antipsychotics compared to NY and Conn. (no state
sunshine laws) (T. Guo et al., Let the Sunshine In: The Impact of industry
Payment Disclosure on Physician Prescription Behavior, April 14, 2017, ssrn)

18. 78
68
60
55
42
40
23
0 10 20 30 40 50 60 70 80 90
cardio
gastro
ortho surg.
family med.
internal med
all mds
peds
Payments From Aug. 1, 2013 - Dec. 31, 2013
D. Marshall, 91 MAY0 CLINIC PROC. 84 (2016)
% of MDs With Reported Payment

19. 0 1000 2000 3000 4000 5000 6000 7000 8000
ortho surg
neurosurg
cardio
internal
peds
family med
Payments From Aug.1, 2013- Dec. 31, 2013
D. Marshall, 91 MAYO CLINIC. PROC. 84 (2016)
Mean Value of General Payments Per MD ($)

20. Variation by Physician Gender
• Among oncologists, males MDs more likely to receive any
industry general payment (52% male, 43% female)
• Among MDs getting any general payments, male oncologists
have greater amounts ($4800 male, $1800 female for mean
total annual value of payments per physician) (D. Marshall et al.,
Distribution and Pattern of Industry-Related Payments to Oncologists in
2014, 108 J. NAT. CANCER INST. (2016)
• Among 300 MDs (all fields) who received most $ for speaking
and consulting payments, 90% were male (C. Ornstein, Men
Dominate List of Doctors Receiving Largest Payments From Drug
Companies, N.Y. TIMES, Oct. 9, 2014)

21. Skewed Distribution of Payments
• About 2% of orthopedic surgeons receive royalty/license
payments, but the $ value of these payments accounts for
70% of total value of all payments received by all orthopedic
surgeons (G. Cvetanovich, Industry Financial Relationships in Orthopaedic Surgery, 97 J.
BONE JOINT SURG. 1288 (2015)
• Top 10% of otolaryngologists (by amount of $ in industry
payments) account for 87% of industry payments to the field
as a whole (V. Rathi et al., Industry Ties to Otolaryngology, 152 Otolaryngology-Head
and Neck Surgery 993 (2015)
• Orthopedic surgery, neurosurgery most skewed patterns. Less
skewing in primary care fields such as internal and family
medicine

22. Source (top image): NBC News17
Source (middle image): New York Times18
Source (bottom left image): Southern Investigative Reporting Foundation19
Source (bottom right image): Connecticut Health Investigative Team20

23. Open Payments Database as Support for Litigation
> Class Action Complaints against Insys Therapeutics for
violations of Federal Securities Laws
– Derick Larson v. Insys Therapeutics, Inc., et. al.
( U.S. Dist. Crt. Ariz. Oct. 2014)
 Complaint against Insys Therapeutics for Fraud and Illegal
Prescribing
– Wayne Automatic Fire Sprinklers, Inc. v. Insys
Therapeutics, Inc., et. al. (Fla. Cir. Crt. Feb. 2016)
 Neglig./PL failure to warn lawsuit against Bristol-Myers Squibb
re: marketing of Abilify
-- Sears v. Bristol-Myers Squibb (E.D. Cal. 2016)

24. Other Uses by Secondary Audiences
• Linking Open Payments data to reimbursement data, such as
Medicare Provider Utilization and Payment data
• Ex: Across 11 medical specialties, physician receipt of industry
payments associated with greater prescribing costs per
Medicare patient and greater likelihood of physician
prescribing costlier brand name medications vs. generics (R.H.
Perlis et al., Physician Payments From Industry are Associated With Greater Medicare Part D
Prescribing Costs, PLoS ONE, May 2016)
• Benchmarking: highlighting outliers & identifying trends over
time
• Professional self-regulation: vetting speakers, guideline
panelists

25. Conclusion
• Transparency on the ground faces inherent
obstacles in data selection & communication
• Serious implementation issues in capturing and
translating data so it is useful, nondeceptive, and
accessible, especially with financial COI info
• Limited impact for primary recipients
• But secondary audiences starting to engage
productively with data and possible long-term
value for health policy generally

26. Source: Agrawal & Brown, The Physician Payments Sunshine Act: Two Years of the Open Payments Program13
31.4
24.7
14.4
8.8
7
1.22
12.43
Breakdown of 2014 General Payment Types to All Physicians by Value
Royalty or License
Services other than Consulting
Consulting
Food & Beverage
Travel & Lodging
Speaker or Faculty
Other