The healthcare industry has been under constant pressure to increase transparency. Payments, physicians, and overall hospital costs are being heavily scrutinized. In 2010, the Patient Protection and Affordable Care Act of 2009 was passed by Congress. The law established requirements for states across the U.S. to provide affordable healthcare to people who have no health benefits. In addition, the relationship between physicians and industry was put under a microscope. It was found that pharmaceutical companies were paying, whether through funds, gifts, or free product samples, billions of dollars to physicians. The bias here is obvious in that a physician is more likely to prescribe a medication if they will benefit. The government decided they cannot prevent this practice, but they can pass legislation that at least makes the public aware of who and how much the industry is distributing to physicians.


In 1993 and 2003, 2 states (Minnesota and Vermont) passed laws requiring pharmaceutical companies to disclose payments and/or gifts given to physicians. This was due to the discovery that 94% of physicians were associated with the industry (see graph). The fallout of this discovery led to a debate about patient care. The concern was if doctors are connected to industry then that creates a bias toward using certain products and services, thereby compromising patient care. The Federal government then acknowledged that this area of healthcare costs did not have enough oversight. The Physician Payments Sunshine Act was introduced in 2007 by 2 Senators (Charles Grassley [R-IA] and Herb Kohl [D-WI]) to set up a system where companies would be required to document and track all payments and/or gifts given to physicians on a public website. The Sunshine Act requires U.S. manufacturers that produce drugs, devices, biologics, and medical supplies covered under Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP) to track and report payments to Health and Human Services, so they can be made public. The idea is that patients are made aware of any physician conflict of interest or bias.


Is the Sunshine Act a windfall for certain doctors?


If the public website shows physicians’ connections to pharmaceutical companies, then other companies will also want the same physicians to consult for them.


The Physician Payments Sunshine Act will give an added level of transparency to physician and industry relationships. Pharmaceutical companies will start tracking and reporting any payments and/or gifts to physicians this year. Then these reports will be posted to a public website by Health and Human Services.

There are concerns whether this act will actually deter the relationship between doctors and industry. One issue is that physicians’ names, areas of expertise, and the company they consult for will be available not only to patients, but also other pharmaceutical companies. This could lead to the view that certain physicians are at a higher level of expertise because they consult with pharmaceutical companies. In essence, the Sunshine Act will allow for an elite group of physicians in each subject matter that industry will rely on as consultants. This undermines the disclosure of the physician-industry relationship. Therefore, the Sunshine Act may not end up being a deterrent to physician-industry connections, but an initiator.


The Sunshine Act is a windfall for certain physicians because its requirements allow pharmaceutical companies to see who is consulting for other companies. Therefore, this will lead to an elite group of expert consulting physicians, since pharmaceutical companies will want to hire the same physicians as their competitors to prove they are using the best doctors for their own research.

For more information on this issue, contact the Kulkarni Law Firm.