On Friday, February 1, 2013, the Centers for Medicare & Medicaid Services (CMS) announced the much anticipated release of the final regulationsimplementing the Transparency Reports and Reporting of Physician Ownership or Investment Interests section of the Patient Protection and Affordable Care Act, commonly referred to as the “Sunshine Act.” It is anticipated that the final rule will be published in the Federal Register on Friday, February 8th, and will be effective 60 days later on April 9th.

The Sunshine Act requires applicable manufacturers of covered drugs, devices, biological products, and medical supplies to report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals. An additional provision requires applicable manufacturers and group purchasing organizations (GPOs) to report all ownership and investment interests held by physicians or members of their families. CMS published proposed regulations in the Federal Register in December 2011. In response, CMS received approximately 373 comments from medical professionals and organizations, industry members and organizations, consumers, and others. As set forth in the final regulations, applicable manufacturers and GPOs must begin data collection on August 1, 2013, and must file their first reports on March 31, 2014.

Along with the final regulations, CMS is publishing an extensive preamble that outlines and responds to many of the public comments submitted in response to the proposed Sunshine Act regulations. The preamble and final regulations offer clarification and, where applicable, revisions to many provisions included in the Sunshine Act and proposed regulations. In addition, several procedures and requirements changed significantly from the proposed regulations to the final version of the rule. For many, the proposed Sunshine Act regulations likely raised more questions than provided answers. The final regulations and the extensive preamble language provide some much needed clarity and guidance as the life sciences industry prepares for commencement of data collection and compliance with reporting obligations required by the Sunshine Act. Of note, the final regulations include:

  • Substantial clarification and revision to the definition of “applicable manufacturer,” including rules for contract manufacturers, distributors and wholesalers, and divisions within an applicable manufacturer;
  • Amended or clarified rules for reporting certain categories of payments or other transfers of value, specifically:
    • Research-related payments,
    • CME support, and
    • Food and beverage costs;
  • The addition of and clarification around certain data elements on the disclosure report, including:
    • The addition of state license number and licensing states for physician covered recipients,
    • Reporting the NPI number and use of the NPPES database,
    • Ability to provide contextual information related to payments, and
    • Allowing up to five covered products with each reported payment;
  • Specific requirements and procedures for applicable manufacturer and GPO registration and reporting, such as:
    • Providing two points of contact, and
    • Flexibility and liability for consolidated reporting; and
  • Additional details about the dispute process, including communication by CMS and timing for resolving disputes.

For additional information on the Sunshine Act and to view a copy of the final regulations as released by CMS on February 1, 2013, please see visit the Federal Register website.