Pharma Companies Held to New Standard of Financial Transparency

New rules will require physicians to report their financial transactions with drug companies through a public database.

New rules will require physicians to report their financial transactions with drug companies through a public database.


In an effort to make relationships between physicians and drug firms more transparent, new standards will be issued by the federal government under the health care law, according to a report by The New York Times.

Pharmacists may want to take note of these developments, as they are included in this transparency effort and may be subject to more scrutiny as a result.

The rule, which was first proposed in 2009, “should require all manufacturers and distributors of drugs, biological, medical devices, and medical supplies (and their subsidiaries) to report to the Secretary of Congress their financial relationships” with the following medical professionals:

  • Physicians, physician groups, and other prescribers
  • Pharmacies and pharmacists
  • Health plans, pharmacy benefit managers, and their employees
  • Hospitals and medical schools
  • Organizations that sponsor continuing medical education
  • Patient organizations
  • Professional organizations

Under the new rule, if a drug company has at least 1 product covered by Medicaid or Medicare, it will be required to report all payments made to parties other than its own employees. If the total value of payments made to the recipient exceeds $100 in a calendar year, the payments must be reported to a public database.

Product samples have their own discrete rules that involve the reporting of the recipients’ names and business addresses and the name of the drug or device provided, as well as the date, number of units, and dosages distributed to recipients.

Aside from product samples, the following types of payment or “transfers of value” should also be reported to the public database:

  • Gifts
  • Food
  • Entertainment
  • Travel
  • Honoraria
  • Research
  • Funding for education and conferences
  • Consulting fees
  • Investment interests
  • Royalties (not including discounts or rebates)

Proponents of the current payment model argue that providing gifts and free samples to doctors is done with the patients’ best interest in mind and is meant to make effective treatments available to them more quickly. Others argue, however that physicians who receive gifts from drug companies tend to prescribe medications differently from doctors not as involved in these collaborations.

“Patients want to know they are getting treatment based on medical evidence, not a lunch or a financial relationship,” Allan J. Coukell, BS, Pharm, consumer advocate at the Pew Charitable Trusts, told The Times. “They want to know if their doctor has a financial relationship with a pharmaceutical company, but they are often too uncomfortable asking the doctor directly.”

Supporters of this public reporting of health care providers’ financial practices say that the new rules will allow patients to make more informed decisions when choosing physicians and treatment options. Although some see the associations between doctors and drug companies as conflicts of interest, others fear that the new reporting of payment data will totally halt innovation in care, as physicians will be more wary to enter into consulting arrangements with drug firms.